If you want to throw a credit card away, together with its unfavorable terms and conditions, or if you simply need to close an account, remember that there are some steps involved.
Why Close an Account
You may want to close an account as to avoid higher interest rates. Since credit card companies tend to increase the interest rate at only a few days notice, you might consider having the account closed to protect yourself from getting in debt. You would obviously want to cancel a credit card if it has been stolen or used by unauthorized parties.
Before you cancel the card, consider the fact that your credit score may be affected. If the account has an outstanding balance, it can harm your credit score substantially. On the other hand, when you have a good credit standing and the balance has been paid in full, there is no reason to worry.
Inform the Credit Card Company
Look for the contact information of the credit card issuer: the email address, the mailing address, and phone number. These can be found on the company’s website, your credit card statement, or the credit card itself.
Before you contact the credit card issuer about your decision, pay the balance in full or find a good credit card and transfer the balance to that account. Don’t inform the creditor about your actions prior to that as there are no advantages or disadvantages in doing it.
Afterwards, call a representative and ask him to confirm the balance is zero. If customer service is unable to assist you, ask for a supervisor. Never have the account closed before you get a confirmation as residual interests may apply even after the total balance has been paid off.
Closing the Account
When you make sure the balance is zero, request that the bank cancels your account. Be firm in your decision to cancel: the representative may be convincing and talk you out of the plan to close the account. Ask about the name of the person to whom you talked as this information will come in helpful at a later date (when you verify the account is indeed closed).
It may take about a month before the cancellation becomes effective. Contact the company for verification but remember that the credit card issuer is a big institution, handling hundreds and thousands of accounts. Having an account cancelled may take some time. Just in case, send the company a letter of intent, requesting to close it. Include the required account information so that the company knows which account to cancel. In a similar fashion, you can send a short cancellation letter. Write down the date on which you contacted a representative by phone, requesting that your account be closed. Enclose the check number you used to pay off the account, together with the date on which the check cleared your account. Send the letter by certified mail and request return receipt. Last but not least, make sure the credit card is cancelled ‘at consumer’s request’.