Closing a card without any loopholes

By Susan Lou, June 02, 2011

If you have a number of credit cards with outstanding dues, it does not reflect well on your account. Hence, it is important to close these credit cards and hold on to the ones that have the most favorable ones. Unlike presumed by many people, closing a credit card in not a child’s play. There are a lot of things associated to this that need to be done meticulously in order to avoid problems at any later point of time. Hence, it is imperative to be aware of these nuances well in advance so they can close the cards correctly without any loopholes.

First of all, when you have made up your mind to close a particular card, you have to ensure that there are no outstanding dues on that card. Closing cards with outstanding dues will reflect badly on your credit report since credit bureaus will consider such cards to be maxed out even if you had any available balance on it. You can either pay off the balance using cash or you can transfer the balance on to another card and then close the existing card.

You will have to first call up the credit card company’s customer service department and inform them about your decision. Ensure they make a note of it when you place the call. However, just doing this is not enough. When you call the customer service department, you will need to have the name and the card number handy. The representative, who is trained to coax customers into retaining their credit cards, will bend over backwards to make you change your decision. You need to be sure about what you want to do and avoid caving in to their requests.

Credit card companies do not necessarily take these requests seriously if you don’t follow up on it. Hence, after making a call, you will need to send across a letter as well requesting for the closure of the credit card. Make sure you mention all the relevant details in the letter and address it to the right person. Have a copy of this letter for future reference in case any problem arises. You can also send an email to the customer service department and inform them of your decision.

Once you have done all this, make sure you track the account with the bank until they confirm closure. Ensure you take the closure confirmation in writing as well so they don’t reopen your account at a later point in time and bill you for some transactions you never made.

Susan Lou

Susan Lou is a business consultant with a largest multinational corporation. With a Masters degree in Financial Management and Accounting from Princeton University, she has been an active member of the financial community. She nurtures an interest in writing and regularly writes articles related to finance and business.

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