How to Close and Cancel Your Credit Card Account

Information verified correct on September 23rd, 2016

Protect your finances and your credit rating by learning how to cancel and close a credit card account the right way

Taking scissors to your credit card may stop you from using it, but it doesn’t mean that the account has been closed. Open credit card accounts can impact your credit rating, accrue fees, and leave you open to undetected fraud.

If you no longer have a use for your credit card, learn how to cancel and close it the right way in order to avoid problems in the future.

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Tips for cancelling your credit card

Using the available credit may have been easy, but there are certain steps that you must take if you want to ensure that the credit card is no longer available for your use. It’s one thing to no longer have the card in your wallet you also need to make sure that one call won’t have a replacement re-issued to you.

  • Pay off your balance. If you attempt to cancel a credit card with an outstanding balance, the bank could reserve the right to increase the interest rate or demand that payment in full be made immediately. Before you let them know of your intent, make sure that you have a zero balance on the card.
  • Call first. Every bank will have a different system for closing an account, so it won’t hurt to call ahead first to find out what yours is. You could get lucky and find that closing the account is as easy as making that one phone call.
  • Stand firm. You have made a sound financial decision, so stick with it. Not all credit card providers will be willing to let you go without a fight, especially if you are a frequent credit user. Keeping you is costing them less than trying to find customers to take your place. Don’t be surprised if your phone call is forwarded to a retention specialist whose sole job is to persuade to stay with your current card. Politely decline their cajoling and reinforce your desire to have the account closed.
  • Send written notice. In addition to the phone call, send the bank written notice of your request to close the credit card using registered mail. In the letter you should list the name on the account and the account number along with your request to cancel.
  • Cancel and direct debits. Make sure that you change the details for any direct debits that were being paid using the credit card. A payment request from a direct debit could reactivate the card even after the issuer has received written notice that you wish to cancel.

What are the benefits and drawbacks of closing my account?

Closing a long standing credit card account is not an easy decision to come to, and will have repercussions that you may consider to be good for your financial as well as risky.

Pros

  • Reduce temptation to spend. Without an available line of credit, you may not be as tempted to make frivolous purchases.
  • Improved credit rating. Too much revolving credit could hurt your credit rating, especially when it comes to applying for large loans like a home mortgage.
  • Less fees. You could be saving money on annual fees by eliminating the number of open credit cards you have.

Cons

  • Credit availability. If your credit rating is not stellar you may find it difficult to be approved for another credit card product in the future. In that case it may be better to keep the account open and use it sparingly and wisely in order to try and reestablish a good credit history.
  • Emergency assistance. Credit cards are a convenient method of covering an expense in the event of an emergency. Not having one available could force you to look at other more expensive options such as fast cash loans.

As your financial needs and position changes, it is possible to find that certain credit cards you have obtained no longer meet your needs. Rather than having a collection of open accounts that you no longer use, you should take the time to cancel those cards. This allows you to take better control of your spending habits and your credit report so that you can work on building a better financial future.

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Frequently asked questions

How will I know if my account has been closed?

You should receive a notification of closure from the bank when you close a credit card account. Save this paper in case there is ever any question in the future about the account.

Will I be charged the annual fee if I cancel the credit card close to its due date?

To avoid this, you should make sure that there is no balance on the card and advise the bank in writing using registered mail of your intent to close. If you have confirmation that the request was received prior to the annual fee anniversary date, you should be able to dispute that charge if the bank were to add it to your statement.

What happens if I don’t cancel the card but just never use it?

The credit card will still accumulate debt from the annual fee. You also put yourself at risk for fraudulent spending, especially if you are not regularly checking the status of that account.

I am getting ready to buy a house, but am being advised to close any credit card accounts that I don’t need or use often, why?

One of the items that lenders look into is the amount of credit available to you. Too much is considered a risk as the bank feels that once your loan is approved you will than rack up a large credit card debt using those available balances.

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10 Responses to How to Close and Cancel Your Credit Card Account

  1. Default Gravatar
    Kylie | August 2, 2016

    Can you take your partner off the credit card if you both agree and leave it in one name only

    • Staff
      May | August 2, 2016

      Hi Kylie,

      Thanks for your inquiry. Please note that you’ve come through to finder.com.au we are an Australian financial comparison website and general information service and we are not affiliated with any credit card company that we feature on our site.

      It may not be that simple that you just remove your partner’s name from a ‘joint credit card account.’ If you applied for the card together, so long that the account is open, both of you will remain liable for the account and the balance. The possible option is to close the account.

      Now, if your partner is just an ‘authorised user’ (a person who has permission to use a credit card account, but is not responsible for paying the bill), it’s possible to remove his name. You just write the bank/credit card company and then they’ll be able to remove his name immediately.

      Cheers,
      May

  2. Default Gravatar
    Gayathri | December 11, 2014

    I closed my credit card 2 years back. I want a Closure letter urgently due to loan reasons. Where I need to apply to get closure letter.

    • Staff
      Elizabeth | December 11, 2014

      Hi Gayathri,

      Thanks for your question.

      You’ll need to get in contact with your card issuer directly in order to request this letter confirming your account closure.

      I hope this has helped.

      Thanks,

      Elizabeth

  3. Default Gravatar
    Brent | September 24, 2013

    Hi

    I am in the process of cancelling a GE credit card and would like to know are banks or credit agencies required to provide you with a written statement saying the account has been closed? They keep telling me that I will receive a letter stating that I have a zero balance on my account which sounds like they are skirting the issue and trying to keep my account open. Any advice?

    • Staff
      Jacob | September 24, 2013

      Hi Brent.

      After you close the account, you will be notified that the account has been closed. Last time I cancelled a credit card, I did it over the phone. I did it when I had no money owing on the card. I didn’t have to wait for any notification in the mail.

      Thanks for your question.

  4. Default Gravatar
    David | July 7, 2013

    Hi. I cancelled a card in may 2013 due to a gambling addiction with the aid of my partner. By July it still had not been cancelled and I subsequently gambled. Can I put a complaint in.

    • Staff
      Jacob | July 8, 2013

      Hi David. Thanks for your question. If you’re looking to make a complaint, please contact the lender directly. If you requested that the bank close the credit card, they should have closed it if the account was paid in full. Sometimes outstanding charges can lead to the account staying open. Cheers. Jacob.

  5. Default Gravatar
    Amy | May 16, 2012

    Hi,
    Can you please advise on Australian customer rights in relation to cancelling credit cards?
    I emailed Citibank Australia to immediately cancel my Citibank Platinum Visa on the 7 May. I did not want to pay the annual fee due on the 11th May. They did not cancel the card and instead asked for confirmation of my phone number which they already had and on which they had made no attempt to contact me. Citibank Australia then proceed to charge the annual fee on the 11th.

    I owed no money on the card prior to Citibank charging the annual fee to it. Would my written request have been sufficient notice to Citibank Australia to oblige my request?
    Thanks

    • Staff
      Jacob | April 8, 2013

      Hi Amy. Thanks for your question. In my experience I was able to cancel my credit card with St.George over the phone in minutes with no written confirmation needed. It may be that the it was prior to the annual fee being charged; however, any requirements will be set out in your credit contract. This sounds like a request to direct towards the Financial Services Ombudsman. They handle issues like this. Not sure if this issue has been resolved in the time it’s taken for us to get to this question; however, I’m extremely interested in the outcome (if there has been one) and I think our users would benefit from hearing your story – please post. Jacob.

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Rates last updated September 23rd, 2016
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Enjoy a 0% p.a. balance transfer offer for 18 months and also earn 2 bonus Velocity Points in the first 3 months on everyday spend.
20.74% p.a. 0% p.a. for 18 months $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
ME Bank frank Credit Card
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St.George Vertigo Visa
Introductory offer of 0% p.a. for 18 months on balance transfers and 1% p.a. for 12 months on purchases, plus a low annual fee.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
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* The credit card offers compared on this page are chosen from a range of credit cards CreditCardFinder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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