How to Close or Cancel Credit Card
There comes a time when you might feel that you no longer needs a credit card, or that you don’t want one anymore. Sometimes, people forget to use their card and rely mostly on debit cards and cash. In other cases, a customer may switch to a better credit card and forget to close the old one. According to industry experts, it is important to close or cancel the credit card as soon as possible. This will ensure the customer does not rack up unnecessary charges.
One must bear in mind that cancelling a credit card may have an impact on the credit score. If you reduce your overall available credit limit, this can negatively impact your score. However, if you keep your line of credit open and do not utilise at least 40% of the credit limit, this will negatively affect your score as well. So, it is better to close the card or transfer the credit limit to a better card.
A few customers may not be able to close the card due to a lack of time, but there are some who aren’t aware of the process. Closing a credit card account can be done easily through various avenues that banks provide. Mentioned below are all the details one requires to cancel or close a credit card without the hassle.
How To Close A Credit Card – Different Methods Offered By Various Banks
There is no standard procedure for closing a credit card. Each bank provides a different method or process to raise a request for credit card cancellation or closure. Hence, the credit card member needs to know the bank specific procedure for credit card closure. Listed below are a few methods allowed by the banks for cancelling a credit card.
- Cancel a credit card by calling customer care: Just like many other credit card related requests, credit card closure request can also be raised by contacting the bank’s customer care. Dial the toll-free customer care number of your bank and select the option for card cancellation to initiate the card closure request with the bank. The bank may give you a call back, discuss the details for cancellation and confirm the request before reviewing it. If there is no such option available over the call, you can talk to the customer service agent and check the procedure for card cancellation.
For example, with an SBI Card, the credit card division of the State Bank of India (SBI) accepts credit card cancellation requests over the phone. SBI Credit Card users can call the SBI credit card customer care number to raise a request for credit card cancellation.
- A written request to cancel a credit card: Another common method allowed by banks to raise card cancellation requests is through a written request. Cardholders who wish to terminate their membership with the bank can write to the bank with all the required details and send it to the bank through an ordinary post or registered post. If the banks allows the facility, it provides the address to send the requests as well. Check the bank’s website or take help of the customer service agent to know the address.
We can take HDFC Bank as an example in accepting credit card cancellation request through written requests. The bank requires the cardholders to write a credit card membership termination request and send it to its credit cards division in Chennai. Along with the written request, customers need to enclose the credit card, which needs to be closed, cut diagonally into two pieces. Any add-on credit card belonging to the primary credit card should also be sent along, cut in the same fashion. Only when the banks receive the cut cards and payment of total outstanding on the card will they consider the cancellation request.
- Credit card cancellation request through e-mail: Some banks also accept credit card cancellation requests through e-mail. They typically provide a dedicated e-mail address to accept all such requests. Cardholders need to find out whether or not their bank offers such provision. If it does, they need to know the e-mail address and other details to send their credit card termination request e-mail. Citibank is one of the banks that accept credit card cancellation request through e-mail.
- Submit credit card cancellation request online: ICICI Bank provides an online platform to raise a credit card cancellation request. ICICI credit cardholders can simply visit the page on ICICI website, fill the form and submit the request online. The same form can be used for both primary and add-on card cancellation requests. Once the bank receives the request, a representative of the bank will call the customer for confirming the cancellation request within 3 working days. Upon confirmation of the same, the request will be processed in 7 days.
There are some other banks which provide online modes to raise credit card closure requests. Check with your bank or its official website to find the availability of the facility.
These are the common methods offered by banks to cancel or close a credit card. Some banks may also allow the customers to terminate their credit card membership through net banking. Cardholders can check the internet banking account linked to their credit cards to know the availability of option for their card.
Things To Consider Before Raising A Request For Credit Card Cancellation
Cancellation of credit card is a simple process but there are a few things which need to be settled before closing the card. By applying for credit card cancellation, the cardholder agrees to all the terms and conditions related to the bank’s cancellation policy. Hence, even before applying for credit card cancellation, one needs to know a few things to have a smooth separation.
- Due on the credit card: Before applying for credit card cancellation, make sure you clear all the dues on the card. Once the bank receives the cancellation application, it will consolidate the entire debt on the card, which means, the dues related to various loans on the card such as any outstanding, EMIs, loans, balance transfers, etc., will be converted into total amount due on the card. The cardholder needs to clear the entire due in order for the bank to consider the request for card cancellation. Only once the outstanding on the card is cleared, the bank will initiate the card cancellation request.
- Reward points: It’s recommended to redeem any unused reward points on the card as some banks may not allow redemption after applying for cancellation. Some banks, on the other hand, provide an option to redeem the points in a specific period of time even after cancelling the card. Cardholders need to check the cancellation policy of the card to avoid losing reward points.
- No refund: No annual fee or joining fee will be refunded even when the cardholder applies for a cancellation in the initial months of a new membership year.
- Balance transfer: Once the cardholder raises a request to cancel the card, he/she cannot apply for a balance transfer to other bank. Hence, it is advised to apply for balance transfer before cancelling the credit card.
- Linked credit cards: Any add-on or supplementary credit cards linked to the primary credit card will automatically gets cancelled along with the main credit card.
When Can A Bank Cancel A Credit Card?
Just like how a credit card user has a right to cancel the credit card at any point of time, banks also possess equal rights to terminate the membership of a cardholder for various reasons. The banks at their discretion can cancel all or some privileges of the credit card at any time without even giving any notice to the cardholder or without providing any reason.
Some instances when a bank can cancel a credit card are listed below.
- If the credit card remains inactive without any transactions or not in operation for more than 12 months or for a prolonged period of time, the bank may exercise its right to cancel the card along with other credit cards linked to it such as any add-on or supplementary cards issued to family member of the cardholder.
- If the payments are not made after 30 days from the due date
- Cheque bounces for card payments
- Improper use of credit card for foreign exchange trading and other illegal activities
- Discrepancy in the documents or information provided during application process
- Not providing required documents as mandated by the law, the bank, the RBI, or other regulations
- Card usage exceeds credit limit multiple times
Tips To Take Care While Cancelling A Credit Card
Cancelling or closing a credit card is an easy process. But doing it without hurting the credit score is little tricky. Here are a few tips that could help you make a wise move with respect to closing your credit card.
- Even before cancelling a credit card, think twice about whether or not it is really necessary to close the card. Even without cancelling, you can put the card aside with no balance to help maintain a good credit score. However, if the annual fee for the credit card is too high, it’s not wise to stop cancelling your card. Another instance is when you cannot control your spending.
- Once you have decided to cancel the card, make sure you clear all the dues on the card including any EMIs. Don’t wait till the bank alerts you about the total outstanding on the card, clear it in small instalments before applying for card cancellation.
- Also, redeem all the reward points you have accrued on the card. Not all the banks allow you to redeem the points once the cancellation request has been made. However, there are banks which allow certain period during which one needs to redeem their reward points. In whichever way, make sure you are aware of your bank’s terms and conditions.
- Once your account is clear, know the process of cancelling a credit card with respect to your credit card. Different banks follow different procedures hence it’s imperative to know the process followed by your bank for cancelling a credit card.
Frequently Asked Questions (Faqs) On Credit Card Cancellation
- What is the difference between credit card blocking and closing?
Blocking a credit card is temporary whereas closing a card is permanent. A credit card should be blocked when it’s lost or stolen to prevent any kind of misuse. Sometimes, banks may also block the card if they find any kind of suspicious activity or transaction on the card. Irrespective of the reason, blocking a credit card is reversible. On the other hand, closing or cancelling a credit card terminates the cardholders membership with the bank. He/she need to submit the card to the bank, once it is cancelled. No other transactions will be allowed once the card is cancelled. However, the card member can raise a request to re-active the cancelled card in case, he/she wants the same credit card again.
- Can I close my credit card through my internet banking account?
Not all the banks provide an option to cancel a credit card through internet banking. Cardholders need to check their internet banking accounts to find the availability of the option.
- Do I need to submit my credit card to the bank once it is Cancelled?
It depends on the bank’s terms and conditions. While some banks require the cardholder to send the cut credit card to the bank to initiate the cancellation request, other banks recommend the customers to cut the card into pieces once it is cancelled instead of discarding it as it is.
Check How to Close or Cancel Other Banks Credit Card Online
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