How to close a credit card
To attract the mass client, banks not only improve credit conditions, offering favorable rates and bonuses. Simplicity of registration has also become important – a person gets a cherished plastic in his hands quickly and with a minimal package of certificates in his hands. Banks are much less interested in a quick withdrawal from the product. Let’s find out what nuances a credit card holder should consider if he or she wants to cancel the card correctly.
Why is it necessary to close the credit card
The reasons why bank customers apply for credit cards are well known: it’s convenience, favorable rates and bonuses for use. But the termination of cooperation with the organization is a less publicized topic. The holder may be prompted to do so by personal circumstances, as well as dissatisfaction with the work of the bank. Among the most popular reasons:
During the period of service, the client ceases to be satisfied with the conditions:
- The cost of the plastic, the interest rate, the size of the limit or a modest cash back;
- Client wants to decrease financial burden to apply for a large loan or mortgage;
- There are more favorable credit products on the market;
- The most ordinary variant – the client doesn’t need the card anymore.
Whatever the motive, the client must know how to properly close the credit card. Rash actions can turn into sanctions from the bank.
The first thing you should not do is to throw away the product or put it aside in a distant drawer. Each payment card is an instrument owned by a financial institution. The client of the bank is not the owner of the plastic, but its holder. This provision is fixed in the contract for servicing the card. It also says that the card should be returned to the bank at the end of its validity period. What is the problem?
How to close a credit card – the procedure
Plastic card is a physical medium, a tool, with which the client disposes of a card account. It is on it that all transactions are made (payment for goods and services, funds transfers, cash-out). Separated from the account, a credit card is a piece of plastic with a chip or magnetic stripe. Having stopped using or physically destroyed the card, the client will continue to be subject to fees, penalties and service charges based on the account – it is the primary relationship with the bank.
That’s why you need to close your credit card in several steps:
- Pay off all debts with the financial institution. During the time of using the credit card they can accumulate unnoticed by the holder.
- Give up additional functions. Part of services (sms-informing, mobile banking, account statement) may be installed automatically, but you may not be charged for it.
- Contact the call-center or one of the bank’s representative offices to make sure you do not have any debts.
- If there are no claims against you, visit the branch and cancel the card account servicing agreement. The employee can take the card with you or destroy it in front of you.
- Get a certificate confirming that you have closed your account. The document must be stamped.
Often the client’s account continues to “drop” commissions even after the competent termination of the contract. This happens because of employee errors or malfunction in the system. Therefore the last step is necessary – the certificate confirms that from the bank there can be no claims to you. This document should be kept for several years and used to protect your interests.
Do I have to close the card if the term expires?
If the credit card is about to expire, and you have no desire to use it anymore, it is better to close the plastic completely. There is a risk that you may incur additional charges. Even with a non-working card, the bank will continue to conduct operations on the account: charging fees, penalties and fees for functionality. Usually, the institution itself initiates the reissuance of the plastic, putting the client before the fact. This means that you will have to pay at least the cost of the card issue or annual maintenance.
Therefore, after paying off credit card debts beforehand, terminate the contract with the bank. Keep in mind that the procedure for refusing to reissue may take up to 60 days – for this period the institution will finally close the credit card, freeing you from the obligations.