How to Close a Credit Card Account? Here Are the Steps

A credit card comes with numerous benefits. That is why credit cards have become one of the most popular mediums of financial transactions. They are widely accepted across all major retail stores. You can buy and pay for anything with a credit card and get various rewards for it. 

However, there can be certain times when you would want to close your credit card account due to certain reasons. Read this article to learn how to close a credit card account, the reasons for closing a card and the important things to consider before making the decision.

How to Close a Credit Card Account

You can close a credit card account in various ways. It can be an online submission of a request for cancellation, an offline request, or a request made through email or customer care. Here are the steps that you would have to follow to make a request for cancellation in these various ways:

Submitting an Online Credit Card Cancellation Request

Here are the steps to close a credit card account online:

Step 1: Visit the official website of the issuing bank.

Step 2: Select the available option for cancelling your credit card from the menu or sub-menu.

Step 3: It will ask you to fill out an online form. Fill in the details and submit the documents as required in the form.

Step 4: Confirm cancellation after submission of the form is completed.

Step 5: Within a very short time, you will receive a response from the respective bank via phone call, email or SMS.

Offline Cancellation through Ordinary/Registered Post

To cancel your credit card by post, follow these steps:

Step 1: Write a letter to the issuing bank and mention your reasons for credit card cancellation.

Step 2: Do not forget to mention crucial details like your bank details, contact details, credit card number, etc.

Step 3: Send this letter to the official address of the issuing bank. The bank will respond within a few days and connect with you regarding the matter.

Cancellation of Credit Card via Email

You can also close your credit account via email. Follow these steps:

Step 1: Some banks have an email address dedicated to such purposes. Write an email to it with your credit card credentials.

Step 2: Send this mail to the official website of the issuing bank. The bank will connect with you within a few days.

Cancellation of Credit Card via Customer Care

To cancel your credit card by calling customer care, do this:

Step 1: Contact the toll-free number of the credit card issuing bank.

Step 2: Follow the IVR options for cancelling your credit card. Or, you can speak to the customer care executive regarding the cancellation of the credit card, if the option is available.

Step 3: Provide all requisite details for authentication of the credit card cancellation procedure.

Step 4: The issuing bank will contact you shortly to confirm your credit card cancellation.

Reasons for Closing a Credit Card Account

Although closing a credit card account may affect your credit score, there are certain instances where closing your credit card account would be advisable. Some of the reasons why you should consider closing your credit card account are given below:

1. Jointly Owned Credit Card

There are times when you have acquired a credit card in partnership with your spouse or a friend but the relationship has waned beyond repair. Sharing a financial relationship with someone with whom you are not on good terms might cause further complexities.

In this case, you might consider cancelling the jointly-owned credit card. However, being a joint holder of the credit card, you are also responsible for paying off the dues. After that, you can close the credit card account.

2. Excessive Charges and Fees

When the credit card issuer levies high charges and fees, you might also consider closing the credit card. If availing credit from a certain issuer is costing you a high annual fee without appropriate benefits, it is beneficial to move towards cancellation of the credit card. There are always better options available.

If your credit card has a high rate of interest and several other charges applicable to it, then also you can cancel the credit card.

3. Poor Financial Discipline

For someone with poor financial discipline, a credit card can become a double-edged sword. Misuse of a credit card can be ruinous to one’s financial stability. Overspending and inability to timely repay the credit card dues within the given time can be disastrous for their credit score.

If you have noticed that having a credit card worsens your financial habits, cancelling it could be the right choice.

Things to Keep in Mind While Closing a Credit Card 

There are certain things that you should keep in mind when you are closing a credit card account. Some of them are given below:

1. Read the Policies Regarding the Closing Process

Every bank has its own procedure for closing a credit card account. Thus, before closing a credit card account you must go through the respective bank’s policies and cancellation procedure to avoid extra charges that might be levied on it.

2. Clear the Outstanding Amount

It is mandatory to close the outstanding amount before closing off your credit card. Without the complete repayment of your dues, you cannot raise a cancellation request for your credit card.

3. Cancel Automatic Bill Payments

Your credit card issuing bank might charge you additional fees if you do not remember to cancel auto payment facilities on your credit card. If this happens, you need to contact your card issuer to revoke any bank mandates that you had started before you can close your credit card.

4. Claim Your Due Rewards

Credit cards provide a lot of rewards and cashbacks on transactions. While using your credit card you also may have accumulated plenty of reward points. Before closing your credit card account, do not forget to redeem these rewards.

5. Get Written Approval from Issuing Authority

After cancelling your credit card, you must get written consent from the issuing bank. Generally, the issuer bank of the credit card will send you a confirmation mail after the cancellation procedure is over. This is an extremely important document which might come in handy if you, later on, want to raise a dispute regarding your credit score.

6. Know the Exact Date of Cancellation

While cancelling your credit card you must carefully remember your exact date of cancellation. This helps you in planning your future purchases through alternative payment methods.

7. May Have Negative Effects on Your Credit Score

Cancelling a credit card often has a negative effect on the credit score. Cancelling a credit card just before applying for a loan can also negatively affect your credit score. As a result, lenders may start offering lesser loan amounts and higher interest rates on loans to you.

Final Words

The Reserve bank of India had issued guidelines to make the closure of credit cards faster and hassle-free for all customers, which came into effect from July 1, 2022. According to these rules, all banks have to take immediate action on any requests for the closure of credit cards without any delay and notify the customer via email and SMS. 

Thus, nowadays closing a credit card has become a fast and hassle-free process for everyone.

Frequently Asked Questions

1. What is a credit score?

A credit score is a figural representation of the creditworthiness of a person. This is discerned by looking at their credit history and loan repayment behaviours.

2. How long does it take to cancel a credit card?

There is no exact period for the completion of the closure process of a credit card. However, according to the Reserve Bank of India rules, a credit card issuing bank must honour a request for cancellation within 7 working days, given that all dues have been paid by the credit card holder.

3. Can students get a credit card?

Yes, students can also get a credit card, given that they meet the eligibility criteria. Thus, if you are a student wanting to apply for a credit card, then you must be at least 18 years old and must be enrolled in a recognised college or university.

4. Can I close a credit card just after applying for it?

Yes, you are allowed to close a credit card immediately after receiving approval. However, such an action might negatively affect your credit score. Thus, you must try to avoid that as much as possible.