Using a credit card offers immense convenience while making a purchase or paying bills. However, you often end up with one too many cards. And if you are not cautious with your spending, or manage the balances tactfully, things can go out of hand pretty quickly. Closing a few cards can help you get hold of your financial situation better, and for that, you’ll need better understanding about a ‘close credit card application’.
You may also choose to close a credit card if it charges annual fees, especially if you get a card with lesser or no annual charges. No matter the reason, it is important to know how to close a credit card. Go through this post to find out.
Before opting to draft your credit card close application, there are a few things you must know. They are as follows:
Once you have the above factors covered, make sure to not continue making purchases using the card you want to close. If you keep purchasing with the card, banks may refuse your credit card close application.
Follow the steps below to close your card:
Note: Always mention the credit card’s name, such as Platinum, Signature, etc. in the application along with the cardholder’s name.
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It is not a bad thing to close credit card. However, it can have a direct impact on your credit score and also increase your credit utilisation ratio. So, you need to refrain from using the card for a while before you submit the credit card close application.
If you close a credit card with an outstanding balance, you still need to pay off the debt. Even though you will be not able to use the card, the remaining balance will continue to accrue interest. So, the best thing to do is to clear all debts before submitting the credit card close application.
You would need to contact the card issuing authority or financial lender, writing them a formal credit card close application letter. Once you get a confirmation from the issuing authority, you need to destroy your old card.
Ideally, keeping unused credit cards open is not a bad thing. Users can benefit from longer average credit history with the availability of a larger credit limit. However, if the annual fees seem too exorbitant for you, then it is better to close the credit accounts.