Credit Cards - the Right Way to Cancel Any Card

Have you been thinking canceling a credit card? Perhaps you have an old card with a high interest rate you want to get rid of. Well, whatever the reason is, canceling any kind of credit card the right way involves a little bit of thinking on your part.

There are some key points to keep in mind before deciding to terminate any credit card account. If you will be applying for any kind of loan in the coming months, consider waiting until after you get the loan before canceling your account.

You see, lenders will look closely at your overall credit history before approving any loan. Closing a long standing account could do harm to your credit score. Most likely the account has a solid payment history and would reflect well in the eyes of any lender.

Another aspect is that you could also have fewer credit card accounts open, but still have the same amount of debt. This lowers your total debt to credit available ratio. So, these are some things you should consider before canceling an account.

Now, if you've made it past these issues and are ready to move forward, here are the steps to take to properly cancel your credit card.

1. Pay off the balance - Always pay your balance in full before canceling any credit card. It looks better on your credit history and it could avoid paying a higher interest rate on your account. If you tell your credit card company that you're closing your account, they may raise your interest rate as a penalty for closing the account. This happens quite often and is legal.

2. After you have paid off your balance in full, it's time to call your credit card issuer and cancel your account. When you call customer support and begin speaking with them, verify that they show your account with no balance. Then you can let them know that you want to close your account.

What will most likely happen next is that they will try and change your mind. They may even come back with a lower interest offer in order to keep your account open. You'll have to decide if that's appealing enough to you or not, but if you're wanting to cancel your card, let them know it.