Your old credit card may create a negative impact on your credit report. Unused cards are anyways difficult to manage and in case of theft someone can use the card to make a big spend in your name. So, one must cancel the old credit card unless it is stored for a specific reason.
Also, if you have many unused cards the lender may draw a negative image of you. They may think that you do not spend money on credit and so, consider it as a case of lack in repayment history. This works against you for sure as they are unable to check your credibility.
How to cancel old credit cards?
The first step is to inform the credit card provider that you want to stop using their card and want to cancel it. For this, make a call to their customer service centre. The number would be found on the back of your credit card.
The card provider may suggest some offers to avoid losing a customer. You can listen to all of them and decide if keeping the card is still in your favour or not. If you see no benefit and you already have a good credit history then better to cancel the cards.
This will help you by opening up chances of getting a new credit card. With a new card, you will have an option to get 0% interest as well as other rewards which you may not enjoy with the old card.
Redeem all the rewards and perks. You must also pay your balance in full so as to make things smooth. Call the customer service department and make sure that the card balance is zero which includes repayment of interest and any other fees liable to the card holder.
Write a cancellation letter and post it through registry so that there are no chances of missing information. Request a written confirmation from their side stating that the credit report must reflect the reason of cancellation as “closed at the customer’s request”.
To be extra cautious, keep a note of the contact person, the cheque number and a copy of other payment verification documents.
The card will still remain active for a few days. You will also get a statement at the end of the month. Just check that it does not show any transactions after the date of cancellation. If required call again to confirm if the card balance is cleared or not.
Check your credit report until it shows ‘closed’ on it. This is it- You are done with the process. To apply for a new credit card, shop around and find the one that is best for you. For more on credit card providers, check www.freepricecompare.com. You can also call us on 02034757476.