Once you decide that you no longer want to use your credit card, you can call your bank and ask them to cancel it.
This decision should not be made lightly, though, as even after canceling a credit card, you are still responsible for paying off any outstanding balances or debts you might carry with it.
You should also note that your card issuer has the right to cancel the card whenever they deem fit. Here are a few reasons why you should cancel your credit card and when to know that the time has come to do so.
Having Debt
If you are in debt and have a hard time paying it off, then canceling your credit card might be a smart move. Otherwise, getting out of debt is more important than having perfect credit.
Most likely, if you are struggling to pay off your debt, chances are high that you have a low or poor credit score. On the other hand, if you can keep a card and not use it every month, you might be better off.
High Fees
If you feel you are paying high fees using your credit card and you can’t manage them, then you should cancel it. There are so many credit cards without excessive charges on the market; opt for those.
You Stopped Using Your Card
In most cases, credit card issuers are not supposed to charge any fees in the case that your card is dormant for several months. However, there is often an annual fee that will continue to be charged.
Your bank might charge you that annual fee or scrap it altogether if you no longer use the card. If you feel you no longer want to use your credit card, then get in touch with your card issuer and ask them to cancel it.
You No Longer Make Payments
Before opening a particular credit card, it’s important to note that there are minimum payments that you are required to pay. Whereas one missed payment might not have any penalty, failure to pay several times might lead to severe problems.
To avoid all this, If you feel you are not in a position to make payments anymore for whatever reasons, call your card issuer and ask them to cancel your credit card.
Your Credit Score Dropped
Gone are the days when one credit card issuer was able to increase your interest rate due to missed or late payments with another issuer (unless it’s the same account).
With that in mind, if your credit score starts dropping due to failure to make your payments, it’s high time you closed the card.
You Don’t Want Other Changes
You will be given at least a 45-day advance notice before your credit card issuer can make any significant change to your cards, such as imposing an annual fee or fixed interest rate.
During that period, you have a right to reject the new terms and close your account or accept and move on. However, if you feel the new terms and conditions are not sustainable, then call in and have your account closed.
Canceling Comes With Its Own Issues
Canceling a credit card comes with its consequences, such as affecting your credit. As such, first, weigh through the options, and look at the pros and cons before you cancel your card. If the reasons outweigh the consequences, then go ahead and cancel your credit card.
Conclusion
Canceling a credit card comes with its consequences, such as dropping your credit score. Luckily enough, you can improve your credit score over time if you reduce your credit card balances.
However, if your card is canceled, you still have to pay at least minimum payments until you completely clear the balance. These are just some of the ways to tell if you should cancel your credit card or not.