Should you cancel credit cards? Why would you cancel credit card? How do you cancel a credit credit?
These are all very popular questions on the topic of cancelling a credit card, that we have seen with increasing frequency over recent months.
Should You Cancel Credit Card?
If you have one or more credit cards that you are no longer using, then it can often make sense to cancel those unused credit cards.
If you are sure that you will not use that particular credit card again, then choosing to cancel a credit card, can in the right circumstances have a positive effect on your credit rating.
The banks and other financial companies generally like to see that a customer does not have too much credit already available to them. The banks can see this, as a warning sign in terms of customers who are more likely to get into difficulties in the future.
If, for example you have a number of unused high limit credit cards, then cancelling these credit cards will reduce the overall amount of credit available to you. When you cancel these unused cards, it can then make it more likely that you will be approved for other credit cards, loans or a mortgage in the future.
Why Cancel Credit Card?
When you stop using a credit card, the card is not cancelled automatically.
A customer may often stop using a card because the introductory 0% credit card offers on balance transfers or purchases may have ended on the card.
If a customer just stops using the credit card, then the credit card will still be available to the customer to use and and will also still show on your credit rating as active.
Unless you cancel a credit card then you are also likely to receive a new credit card in the post, when the old card passes it’s expiry date. For this reason, it is very important to actually cancel old credit cards that you no longer use, especially if you change your address by moving home, for example.
How To Cancel Credit Card
When a customer stops using a credit card, or even if you cut up or shred an old credit card, this does not cancel the card.
The right way to actually cancel a credit card, is to contact your credit card provider, either in writing or by telephone and tell them that you want to cancel the credit card.
You will find the contact details for your credit card provider on any statement or letter from the credit card company. Alternatively, contact details for all of the credit card companies can be found on their website online.
When you tell a credit card company that you want to cancel a credit card, they will check that there is no outstanding balance left on the card and take payment if one is required.
When the credit card is cancelled, this card will then show on your credit history as “settled”, meaning that the card was closed successfully and all outstanding payments received.