How to Close a Credit Card: A Step-by-Step Guide

If you carry a balance on any of your credit cards and you cancel one card, it lowers your total available credit. This increases your credit utilization ratio—the percentage of available credit in use. A higher credit utilization rate may lower your credit score.

Card cancellation could also impact your credit mix, which is the different types of credit you have available, such as a mortgage, personal or car loan, student loans, and credit cards.

The age of your credit cards is important, too. If you cancel an old card, the average age of your accounts could decrease, which can also lower your credit score.

How to close a credit card account

Once you’ve decided to cancel your card, follow these steps.

1. Pay off your balance. When you cancel your credit card, it doesn’t erase any outstanding balances, accrued interest, or other fees that remain on your credit card account. Be sure to take care of your credit card debt before closing the account. If you haven’t paid off your balance, you’ll need to continue making payments to the credit card issuer on the closed account (and you’ll lose the available credit you may have had.) You may wish to set up automatic payments to pay off the remaining balance before you cancel.
2. Use any remaining rewards prior to canceling your credit account. If you don’t want to miss out on accrued points or rewards you’ve earned on your rewards credit card, redeem them prior to canceling. You may also be able to cash them in as a statement credit to help reduce your outstanding credit card balance.
3. Update your recurring payment accounts. Are you using your card to make recurring payments for utility bills, subscriptions, or streaming services? If so, you’ll want to update your automatic payment information to include your new card.
4. Notify other cardholders that you intend to close the account. If your spouse or other family members are authorized users on your account, be sure to let them know that you plan to close or cancel the card so they don’t continue to make purchases. Add them to your new credit card if you want them to access a different card in the future.
5. Request cancellation. Contact your credit card provider’s customer service department via email or phone. You can find their number on the back of your card (or on your credit card statement) to let them know you want to cancel the account.
6. Confirm cancellation. You can send a certified letter to the card issuer to make sure your case has been addressed and the account has been canceled. Request written confirmation and keep this for your financial records.
7. Destroy your card. It’s a good security practice to shred or cut up your card before you throw it away, so the account number is no longer legible. Some credit card companies offer secure disposal options, like mailing the card back in a provided envelope, particularly for metal cards.

How closing a credit card can impact your credit score

A closed account will appear on your credit report, and that may impact your credit score. If you want to see the effect, get a copy of your credit report. Approximately one month after you cancel your card, you can access your credit report to confirm that the account information is accurate. You can request your free credit report at AnnualCreditReport.com (the only website authorized by the federal government).

If you see an error, contact the credit bureau to investigate incorrect negative factors against your credit score that appear on your credit report, since they could remain on your credit history.

The canceled credit account will remain on your credit report, may impact your credit score, and may be visible on your credit history for seven to ten years.

The bottom line

Before closing a credit card, consider your reasoning and the potential impact it will have on your credit score. Protect your financial future by taking the proper steps to close your account without any future headaches.