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Credit card cancellation is not always a good idea, but it can be in some circumstances. This post will explain how to cancel a card and things to think about before you do.
Can you cancel a credit card?
Yes, you can cancel a credit card. Occasionally, it no longer suits your needs or way of life. If you’re considering canceling, make sure to take into account the effects it will have on your credit score, which are further explained below. These effects include your credit utilization ratio and the age of your accounts. Additionally, think about whether switching to a new card with different terms or benefits would be a better choice.
Certain banks will permit what’s known as a “product change,” which is also referred to as an upgrade or downgrade, rather than canceling the card. This simply indicates that you will be using a different credit card from the same issuer while remaining with them.
Call the customer service number located on the back of your current card to find out what product changes you qualify for in order to accomplish this. Over the phone, the customer support agent can guide you through this procedure.
Five steps to cancel a credit card
Following are the five crucial actions you should take in the event that you decide you are ready to cancel after all.
Before you close your credit card, make sure you pay off the whole amount to prevent unintentionally accruing more charges. Certain issuers permit you to simply stop receiving new charges while keeping up with the balance repayment. However, your credit score may suffer greatly if you cease making payments on the account and forget you even own it. After your balance has been paid in full, see if your card has any subscriptions or automatic payments on it. If so, transfer them to another card.
Make sure to use any rewards on your account that haven’t yet been used. You might be able to move the rewards to your partner’s card or another card if you are unable to redeem them for any reason.
Call your credit card issuer to cancel your card. Be ready for the possibility of receiving a counteroffer to keep the card open. Say no and carry on with the process if you’re certain you want to close. It is important to verify that there is no current balance on the card.
Check your credit report
After canceling your card, you should check your credit report 30 to 45 days later to make sure the account was closed and there was no remaining balance.
Ensure that your card is destroyed entirely to prevent anyone from accessing it. If the card is plastic, cut it up with scissors or a shredder; if it’s metal, find out if your issuer offers a card recycling program.
Should I cancel my credit card?
Although the idea of canceling a credit card may seem relieving, there are still consequences to closing your account, even if you have paid it off and don’t intend to use it in the future. Consider the following factors before you cancel your credit card:
What is the average age of your accounts? Cancelling an account doesn’t change the average age of your accounts; however, it will no longer raise your score. The total age of your closed account will still be factored into the average, though, because accounts in good standing can stay on your record for up to ten years.
Is there an annual fee associated with your card? If so, it might be worthwhile to cancel. If not, there may not be much benefit to getting rid of it. You may be able to request that your card issuer downgrade your account, even if there is an annual fee associated with it. However, be aware that doing so will likely result in the loss of certain benefits. ).
Will this have an impact on your credit utilization ratio? Your credit utilization ratio is calculated by dividing the total amount of debt you have on credit cards by the total amount of credit card limit. Canceling a card will mean you have less credit available. Your available credit is then being consumed by any outstanding balances, which could have a negative impact on your credit score. Your credit utilization ratio should ideally be 30% or less. If paying off other credit card debts comes first and canceling your card will put you over 30%, it might be a wise decision.
How to calculate your credit utilization ratio
- Add up the statement balances on your credit cards
- Add up the limits on your credit cards
- Divide your total balances by your total credit limits
When it’s a good idea to cancel a card
Closing your credit cards may make sense if your spending has gotten out of control and you are in debt because the temptation to use them is too strong. An additional good reason to cancel could be a hefty annual fee. In either case, you should close your credit card account by paying off the entire balance and following the above instructions.
Chase Credit Journey® can give you insight into your financial health if you want to monitor how the various accounts you have, their transactions, or closures, impact your credit score.
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For Informational/Educational Only: The opinions presented here may not align with those of other JPMorgan Chase staff members or departments. The opinions and tactics expressed might not be suitable for everyone, and they are not meant to be personalized recommendations or advice for any one person. Chase does not supply, support, or take responsibility for any goods, services, or other content offered by third parties. Prior to making any decisions, you should carefully assess your needs and goals and speak with the relevant professional or professionals. Outlooks and past performance are not guarantees of future results.
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FAQ
How do I close my Chase credit card online?
Although you cannot cancel your Chase card online on your own, you can send a secure message to customer support using the bank’s website or mobile app. As an alternative, you can send Chase a letter or give customer service a call to cancel your credit card.
Does cancelling a credit card hurt your credit?
Your credit utilization ratio, or how much credit you’re using relative to how much credit you have available, may rise as a result of closing a credit card. It may also result in fewer credit account kinds and a lower average credit age. This can lead to a dip in your credit score.
Is it better to close a credit card or leave it open with a zero balance?
Generally speaking, it’s preferable to keep your credit cards open and balance-free rather than canceling them. This is accurate even if they aren’t being used, since open credit cards let you keep your credit history on file for a longer period of time and help you maintain a lower overall credit utilization ratio.
Does closing a Chase account affect credit score?
Your credit score is unaffected when you close a bank account, such as a savings or checking account. Your activity in your checking and savings accounts has no direct impact on your credit score. That includes account closures. Checking and savings accounts are not considered credit accounts.
Read More :
https://www.chase.com/personal/credit-cards/education/basics/how-to-cancel-a-credit-card
https://www.usatoday.com/money/blueprint/credit-cards/how-to-cancel-chase-credit-card/