Do’s and Don’t's of Closing Credit Card Accounts

Most of the time, consumers seek out ways to open additional credit card accounts. However, there are instances which compel an individual to consider closing credit card accounts. Sometimes it is because the individual particularly dislikes working with a specific lender and wants to cancel the credit card accounts associated with those cards. Other times it is because there are too many open accounts for the credit card user to keep them straight and organizing means downsizing.

These reasons are valid reasons for closing credit card accounts. But there are good ways and bad ways of making that decision. Moreover, there are good and bad ways to execute that decision once it’s been finalized. Opting to close credit card accounts in a bad way can decrease lending credibility and increase the financial hassles. As a result, it’s important to follow some basic “do’s and don’ts” of closing credit card accounts.

DO:

• Carefully consider the reasons that closing the account makes sense. Write down the pros and cons and make smart choices about which accounts to close.

• Review credit reports. Reducing the number of cards available but maintaining the same debt can lower credit scores. Knowing credit report details can make it easier to make smart choices about closing accounts.

• Consider speaking with a financial advisor. There are good and bad things about closing accounts and it helps to get a professional opinion.

• Speak personally with a customer service representative. The company will want to keep its clients so they often offer great deals to people interested in closing accounts.

• Request confirmation in writing that the account has been closed.

DON’T:

• Cancel a whole bunch of cards at once. This reeks of desperation and sends a red flag to credit card companies making it more difficult to get loans down the line.

• Argue with customer service representatives about canceling an account. Consider all that they offer during the closing transaction and make a firm decision based on current financial needs.

• Complete the entire transaction on the phone. After closing the account on the phone, it is important to follow it up with a letter in writing. Simply review what was said on the phone, list the account number and state that it’s understood that it’s now closed. This is a way to make sure that proof is available should there be problems down the line with the account remaining open.

Closing credit card accounts is normally something that is detrimental to credit. However, there are times when it is the right decision for a particular consumer. Working with credit card representatives and financial planners can make it easier to make the right decisions. Being reasonable and open-minded when closing accounts helps to make the process go more smoothly.