If you’re already familiar with how a credit card works (row 1081 – how credit cards work – Dubai), but now are rethinking your decision in having one, then you’re in the right place.
Whether you’ve spent a lot of money with your credit card or have other reasons to cancel it, we get you. There does come a point where you can no longer maintain having a credit card, or you just simply wish to move banking institutions for better offers.
But how do you cancel your credit card? Well, it involves a lot of paperwork!
To help you out, here’s a short guide on how this tedious cancellation process works, for your reference.
Are cancelling cards good or bad?
A lower credit score can keep you out of some good loans and offers provided by any financial institutions or banks. It can also give you a hard time in purchasing big properties such as houses, apartments, or cars.
However, there are also reasons that can make cancellation the best path to take. For example, looking for better offers.
You can certainly cancel your current credit card if you found another institution that offers one for a lower annual fee. The benefits you will get will always outweigh the expert opinion of cancellation.
Their properties will have to be separated of course (row 1060 – dividing property during a divorce – Dubai) – including their credit cards. It would be very awkward to still share properties with a person you broke up with, right?
So, how do I cancel a credit card?
It usually depends on the bank or financial institution where you’ve availed a credit card from. However, here are five general steps that you will encounter in cancelling a credit card:
The first step you need to take is to redeem all the unused rewards on your account if they’re available. This is just to make sure you’ve fully exhausted all the offers given to you by the bank you’re in.
No stone left unturned, so to speak.
The next step is to make sure to pay off all the charges on the card you’re cancelling. This is to avoid any legal or financial troubles in the future.
The third step is to call your card issuer and confirm if the balance of the charges on your credit card is zero.
Next, e-mail a formal and certified letter of request for cancellation to the financial institution where your card is from. We also recommend that they send you the confirmation of your zero balance or pending charges and the official closed account status.
After officially cancelling your card, we advise checking your credit reports for 30 to 45 days to make sure that the credit card is really closed.
The usual recommendation is to keep credit cards open for a better credit score. If it is truly necessary for you to cancel one, then there would always be other ways for you to achieve the credit score you desire.
We recommend seeking the advice of experts first, if possible before making a big decision such as credit card cancellation.