MoneyGuide

How do I cancel my credit card?

Updated: Monday 5 December, 2011

By Martin Fagan

Whether you're trying to curb your spending or simply want to get rid of a collection you've built up, everyone should know how to cancel a credit card.

Many people think their account will be cancelled if they cut their card up - but this will simply stop you from using it.

To cancel your card you will need to phone your credit card company and specifically ask that they cancel your card. You should also ask to have this put into writing to make sure that your card definitely has been cancelled.

When you call up to cancel, you might be offered a new deal, such as interest-free purchases for a period of time or perhaps a free balance transfer. Your card issuer is trying to get you to keep the card active. Think about why you wanted to cancel before you agree to keep it open.

If you were cancelling because you're trying to stick to a budget and don’t want the temptation of spending on a credit card, then stick to your original plan.

But if you were planning on applying for a new credit card to take advantage of some of the deals that are available, then this could be a great way of saving on interest payments without having to switch to a new provider.

Compare credit cards to find the best deal to suit your needs.

• Cancelling doesn’t always mean closure
• Check your credit report
• Should I cancel my cards?
• Should I keep my credit card?

Cancelling doesn’t always mean closure

One thing to be aware of is the fact that even once your card has been cancelled, your account isn’t necessarily closed. Many credit card companies will keep your account open for a while longer in order to process any outstanding payments - so it’s always worth sending a short letter and then calling up a month later to double check that the account really has been closed.

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Check your credit report

You might also want to check your credit report once your account has been closed. It might take around 30 days to show up in your credit report, but you should make sure that it says something along the lines of “closed at customer’s request” rather than “closed by creditor”, which could have a negative impact on your credit rating.

You can check your credit report with the three main credit reference agencies in the UK: Equifax, Experian and Callcredit.

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Should I cancel my cards?

There are benefits to cancelling your credit cards - especially if you've got a collection of cards that you don’t even use. The two main benefits of cancelling your credit cards are:

• Improve your credit rating. Cancelling your credit card means you've got less credit available to you, which in turn reduces the potential for getting into debt and this will boost your credit rating.
• Become a new customer. The best deals are invariably offered to new customers, and after cancelling your credit card, you could eventually become eligible for these promotions again.

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Should I keep my credit card?

A credit card can be really useful in an emergency so it is worth keeping one - though this doesn’t mean that you should use it to do your daily shopping or pay your bills.

It’s important that you always try to pay your credit card off each month to ensure that you don’t end up paying interest on the balance.

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