How do I cancel credit cards?
April 22, 2009 7:05 PM   Subscribe

What is the best way to cancel a bunch of credit cards? Do I have to write a letter to each and every card provider?
posted by Londonita to Work & Money (15 answers total) 2 users marked this as a favorite
Whenever I've canceled a credit card, I've done so by just calling them up and telling them I wanted to cancel it.
posted by Flunkie at 7:10 PM on April 22, 2009 [1 favorite]

you can just call them. ask for written confirmation and they'll send you a letter. a couple of months later, check your credit report to make sure the cancellation is reflected there as well.
posted by misanthropicsarah at 7:18 PM on April 22, 2009

I agree with misantropicsarah: They will do anything they can do to keep it open. I recently canceled a citi bank master card and they offered me the sun, moon, and stars to keep it open. Then when I checked a week later they hadn't closed it, even though I clearly asked them too. I called back with a little more impatience in my voice and they closed it right away.

I wouldn't right a letter. They'll just ignore it.
posted by crapples at 7:39 PM on April 22, 2009

Cancel 'cuz you lost them or they were stolen? Call the issuers immediately. Close them b/c you don't want to have their toxic plastic in your pocket? Think twice. Your credit score is calculated based in part on your utilization ratio--how much credit you owe over how much credit you have available. Close the cards and you reduce the divisor making your utilization ratio closer to 1:1. IANAB, but get some advice from a financial advisor you trust before closing cards just to close them.
posted by beelzbubba at 7:50 PM on April 22, 2009 [1 favorite]

Please bear in mind that cancelling the card will damage your credit rating. If the card doesn't have an annual fee, you're really better off just paying the balance and chopping the card up.
posted by East Manitoba Regional Junior Kabaddi Champion '94 at 8:06 PM on April 22, 2009 [2 favorites]

East Manitoba, what makes you say that?

I believe the opposite is true. I cancel cards and ask them to put a note in the memo field: account cancelled at customer's request.

Having umpteen credit cards that you don't need is, to my knowledge, worse for your credit report than having one or two that you use (or don't) and pay off properly.
posted by You Should See the Other Guy at 8:42 PM on April 22, 2009

Get Rich Slowly has a pretty good post about exactly this issue. If you owe money on any credit card, or these cards are your longest-held credit accounts, you'd be wise to leave the account open (just cut up the card).
posted by barnone at 9:03 PM on April 22, 2009

call them:
posted by yoyo_nyc at 9:13 PM on April 22, 2009

You Should See The Other Guy: Banks are fine with unused cards. If you have credit available to you and you aren't using it, it shows that you can use credit responsibly and so you are judged to be less of a risk. Having a higher ratio of available credit to used credit is a major component of the credit score. I myself have umpteen unused cards (which I used for introductory offers and so on) and I have excellent credit. If you want to easily keep track of multiple credit cards I suggest Mint.
posted by East Manitoba Regional Junior Kabaddi Champion '94 at 6:37 AM on April 23, 2009

Whats with the obsession with Credit Ratings? What do you actually need a GREAT credit rating for rather than a passable one?

I cancelled a credit card recently just by calling them up.

But in the UK I expect you will get better results if you send a signed letter, and keep a dated copy. its more 'Official'.
posted by mary8nne at 8:26 AM on April 23, 2009

2nding canceling of the cards will reduce your credit rating, at least in the US. This can effect loan rates/eligiblilty, getting into a new appartment, insurance rates/premiums, and can even have an adverse effect on your chances of being hired for a job. Disgusting, but true.
posted by nenequesadilla at 9:05 AM on April 23, 2009 [1 favorite]

Nthing those who said cancelling credit cards will likely hurt your credit rating. As East Manitoba says, if you have $20K in available credit lines and $5K in debt, you're using up 25% of your available credit. If you cancel cards and go down to $10K in available credit, then you're using 50% of your available credit lines, which looks worse.

Credit card companies also sometimes cancel cards which have been inactive without any warning. I know because this happened to me just last month (on an account that was only three years old, and which I used frequently in the first year). One person reporting a similar experience said it hurt his FICO score.

Also note that applying for a new card can negatively affect your credit rating as well, because the issuer will do a "hard" inquiry on your credit file. But any effect of a new inquiry on your file I would gather is less negative than closing credit accounts.
posted by DavidNYC at 12:12 PM on April 23, 2009 [1 favorite]

Account age is 15% of your score, where hard inquiries are 10%. Definitely worth keeping older accounts open. More detail here.
posted by judith at 2:21 PM on April 23, 2009 [1 favorite]

With all the talk of credit scores though, it is probably more important to know the OP's situation. I canceled every credit card I owned a while back, and it really didn't affect my score all that much. If the OP isn't buying a house/car/major purchase anytime soon and the psychological benefit of canceling them would outweigh the negative of the decrease in the credit score I think he should do it. But this is probably getting off track and influenced by my own bias.
posted by highfidelity at 5:56 PM on April 23, 2009

With all the talk of credit scores though, it is probably more important to know the OP's situation.
Not really. The poster asked how, not whether, to cancel credit cards.
posted by Flunkie at 12:57 PM on April 24, 2009

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