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Some people cut up their credit cards because they got a better deal, others out of anger or frustration with their card companies. But while you may end the relationship by chucking the plastic pieces in the bin, your card account stays open with the firm until you formally close it. While the process of closing a credit card account is simple and straightforward, many people believe that just stopping the use of the card or just cutting it into pieces is enough to close the account.
Also, there are certain things you need to take care of before and after closing your credit card account.
What should you do before closing
First, exhaust your reward points. Remember that some cards allow you to use these reward points to pay your credit card bills. Once you close the credit card account, you may not be able to use the reward points as you would not get the cash equivalent of the points.
Second, pay up outstanding amounts. Annual fees will continue to be added and billed to you as long as the credit card relationship is active. Pay up all the outstanding dues, including fees, before placing the closure request.
Third, make a written request to close your account. Banks would want you to fill up a closure form that includes a declaration that you have actually requested the closure. Banks are also allowing placing these requests through their apps, customer care call centres or through email. Don’t rely only on an oral request made through a call to the customer care, even if your card issuer allows that.
Either fill up the form or place a request in writing through an email. Follow up on your request and get a confirmation from the card issuer that your account has been settled and closed.
What should you do after closing
Once you get a confirmation from the issuer, your cancellation is complete.
However, just to be sure, you can opt for another way to check if the credit card account has been disconnected. A few months after you have closed your credit card, you can check your credit report to make sure that the line of credit has closed. Your credit report from credit bureaus has details of all lines of credit, including a credit card, that you have or have had in the recent past.
You can get a free credit report from any of the four credit bureaus in India each year. Credit bureaus also provide a facility to report to them if you find some detail in the credit report to be inaccurate. This facility can also be used to cross check and ensure that your surrendered credit card has been closed.