Credit card users spend 40 times more than debit card users, as per RBI data. Having a credit card has its perks too. It enables shoppers to make purchases on credit and also allows them to maintain a good credit score. But if you have too many credit cards or are paying high annual maintenance charges, closing your credit card would be a smart move.
There are multiple methods you can use to cancel your credit card:
You can submit an application for credit card cancellation using the following format:
Name of the bank,
Name of the Branch,
Subject: Request for credit card cancellation.
I, (your name), am a credit card holder with your bank, with Credit Card No. 456712345678XXXX, which is linked to my savings bank account, Account No. 345678XXXX45.
I’ve decided to cancel my credit card because I’m not using it for personal reasons. I would like you to acknowledge my request and cancel my credit card immediately.
Please take note that I have paid off all of my credit card debts and have a zero balance on my credit card.
Please close my credit card or notify me if any additional information is required.
Side Note : Write such a letter/application on a plain A4 sized sheet and then submit it to the concerned authorities.
When submitting your request to cancel your credit card, you must include the following information:
|Banks||Customer Care Number|
|State Bank of India (SBI)||1800 180 1290|
|Axis Bank||1800 209 5577|
|HSBC||1860 500 2277|
|Kotak Mahindra Bank||1860 266 2666|
|YES Bank||1800 103 6000|
|Citi Bank||1860 210 2484|
|American Express||1800 419 1092|
|Bank of Baroda||1800 225 100|
|IndusInd Bank||1860 500 5004|
|IDBI Bank||1800 200 1947|
|Bank of India||1800 220 229/ 1800 103 1906|
|RBL Bank||1800 121 9050|
|Corporation Bank||1800 22 6606|
|HDFC||1800 266 4332|
|You can avoid unnecessary spending.||Closing a credit will lead to a drop in your credit score|
|To decrease your overall debt and improve your financial stability||You lost your rewards, points and other benefits|
|Since, unused credit card can still be hacked,by closing your credit card, you can prevent identity theft||It erases all your credit card history|
When you initiate the process to cancel a credit card, there are certain things you need to keep in mind:
Clearing the outstanding balance is a mandatory requirement to close a credit card. It would be impossible to raise a cancellation request for a credit card without clearing your dues and paying any penalties that may be due.
Closing procedures might vary based on the credit card issuer. Reading the procedure on how to deactivate the credit card can help you avoid all the extra charges and penalties that might be levied due to complications.
Credit card companies reward cardholders with reward points when they use their credit card to make purchases. Ensure that you use all your points and avail all monetary benefits before you close your credit card. This will help you get the most value out of the money you have spent.
You might have to pay additional fees to your credit card issuer in case you forget to cancel auto payments on the credit card. Contact your bank and revoke any bank mandates you may have signed up for before you close your credit card.
The final statement before filing the closure application of the credit card must be carefully studied. Keep an eye out for any last-minute charges. You must pay off all the necessary fees before closing a credit card.
Following up with your credit card issuer to find out the exact date of closure of your card after you raise a cancellation request is important. It helps you eliminate the extra charges or late fees that may be levied on your account.
Keeping track of all the activities after raising a cancellation request is important to avoid unnecessary charges. Receiving a written confirmation regarding card closure is an important document.
Cancelling a credit card just when you decide to apply for a loan can affect your credit score. As a result, the lender may also increase the interest rate on the loan being offered to you.
All credit cards linked to the one being cancelled create an automatic cancellation of all linked and supplementary cards.
You will not be able to transfer your balance between the cards in case of closing or cancellation of a credit card.
Deciding whether or not to close unused credit cards can be a tricky decision, and it ultimately depends on your individual financial situation, however let’s take a look at the points below :
Cancelling your credit card is easy. It can be done offline or online. Just follow the process mentioned by the credit card company. Ensure that you read the terms and conditions carefully and clear all dues before closing your credit card. This would help you avoid penalties and extra charges. Also, do not forget to get a written confirmation from the issuer that your credit card is closed.
Yes, you are allowed to close a credit card even after receiving approval. However, opening a credit card creates a hard inquiry on your credit report. If you close a credit card after immediately opening it and then reopen another credit card, it triggers two hard inquiries on your credit report within a short time. Eventually, it leads to a decline in your credit score.
The credit score is only impacted if the procedures and balances are not paid off in time. There are methods of cancelling credit cards without hurting the credit score. Consequently, you can cancel your credit without causing damage to your credit score. However, the key is to pay off all credit card balances, instead of just the one you’re closing.
The exact period is not defined. If a cardholder requests that a credit card be closed, the credit card issuer must honour the request within seven working days, provided all dues have been paid. The guideline has been issued by the Reserve Bank of India (RBI).
Yes, students can apply for credit cards, provided they meet the eligibility criteria. If you are a student and you want to avail a credit card, you must be a minimum of 18 years of age. Furthermore, you should be enrolled in a college or university and produce the documents as required by the issuer to complete the process.
No. You can apply for a new credit card, although you have closed the previous one. Furthermore, you can also re-apply for the same credit card as a new account in the future.
Closing your credit card can potentially hurt your credit score. However, in order to avoid this, you can settle all your credit card accounts, and not just the account you’re closing.
Yes, depending on the facilities provided by your credit card issuer, online cancellation of credit cards can be done by email or on your bank’s website.
You can cancel your credit card anytime you want. All you have to do is submit an application to your credit card issuer and wait for confirmation.
You can block your credit card by logging into your bank’s website or mobile application and submitting a request for the same.
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