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Closing a Credit Card Account Without Hurting Your Credit: A Step-by-Step Guide

Looking forward to closing your credit card account? Well, use this article to close your credit card account without hurting your credit score.
Close Credit Card Without Hurting Credit

 Many people have different ways of handling situations, and in this modern world, when you think of doing something a specific way, another will look for his own way of doing it that will be more suitable to him or her.

For example, Closing a credit card may seem like a simple decision, and it can have implications on your credit score. But some people still prefer going for this route since they see it as the best way to control their expenditures better.

Well, you might condemn the person and prefer a different route: However, with careful planning and strategic steps, it is possible to close a credit card without significantly impacting your credit.

Well, in this article today, we will provide a step-by-step guide on how you can close a credit card without hurting your credit score.

Table of Contents

A Step-by-Step Guide on How to Close a Credit Card Account Without Hurting Your Credit

Follow the following steps below to easily close your credit card account without affecting your credit score.

1. Evaluate Your Credit Utilization:

Before closing a credit card, assess your overall credit utilization. This is the percentage of your available credit that you are  currently using. A higher credit utilization ratio can adversely affect your credit score.

If closing the card will  significantly increase your credit utilization, consider paying down your balances or transferring them to other open credit cards to  maintain a healthy credit utilization ratio.

2. Pay Off Any Outstanding Balances:

It's important to clear any outstanding balances on the card you plan to close. If you close a credit card with an unpaid balance, it will still be  reported to the credit bureaus, potentially harming your credit score. Ensure you make all necessary payments before  proceeding with the closure process.

3. Contact the Credit Card Issuer:

Next, reach out to the credit  card issuer and inform them of your intention to close the credit card account. Be prepared to provide your account information and answer any security questions. Keep a record of your conversation, including the date, time,  and the name of the representative you spoke with, for future reference.

4. Request a Confirmation Letter:

Ask the credit card issuer to  send you a written confirmation that the account has been closed at your request. This confirmation can be valuable in case of any discrepancies or  future credit reporting issues.

5. Consider the Account's Age:

Keep in mind that closing an  older credit card account may have a more significant impact on your credit history. The length of your credit history plays a role in your credit  score calculation, and closing an older account might shorten your credit history.

If you have  other credit cards that are relatively new or have a short  credit history, it may be wise to keep your older credit card accounts open to maintain a longer credit history.

6. Monitor Your Credit Report:

After closing the credit card account,  regularly monitor your credit report to ensure that the account is listed as "closed at the consumer's request." This notation is  crucial because an account closure initiated by the issuer can have a negative impact on your credit score.

Some Frequently Asked Questions(FAQs)

How much will my credit score drop if I close a credit card?

While there's truth to the idea that closing a credit account can lower your score, the magnitude of the effect depends on various factors, such as how many other credit accounts you have and how old those accounts are. Sometimes the impact is minimal and your score drops just a few points.

Is it bad to close a credit card account?

A Populare phrase from the Executive Vice president and head of US Credit Cards and Unsecured lending for TD Bank, Chris Fred, "closing your cards will not only lower your utilization, but it also removes credit history, which damages your score in the length of history category.” This simply means it is bad to close a credit card since there will be a negative impact on your score.

What happens when you close a credit card with zero balance?

By closing a credit card account with zero balance, you're removing all of that card's available balance from the ratio, in turn, increasing your utilization percentage. And the higher your balance-to-limit ratio, the more it can hurt your credit score.

Can I reopen a closed credit card?

It's possible, since you can call up the card issuer and ask them to activate your old account. Whether they will do so depends on their policies and why the account was closed. If they are unable to reopen your account, you will need to start a new application and go through the same approval process as normally done.

Is it better to close a credit card or leave it open with no balance?

In general, it's better to leave your credit cards open with a zero balance instead of canceling them. This is true even if they aren't being used, as open credit cards allow you to maintain a lower overall credit utilization ratio and will allow your credit history to stay on your report for longer.

Conclusion or Final Thoughts

Closing a credit card without hurting your credit requires careful planning and strategic execution. By evaluating your credit utilization, paying off outstanding balances, contacting the credit card issuer, and keeping a record of the process, you can navigate the closure process smoothly.

Remember to consider the account's age and  continually monitor your credit report to verify that the closure is accurately reported.

By following these steps, you can close  a credit card responsibly and minimize the potential impact on your credit score.

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About the Author

Content Writer| Finance Specialist| Video Editor| Blogger and Vlogger is what I am and we share content mostly on finance tips and tech tutorials.

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