Canceling Old Credit Cards

Credit cards are extremely useful, flexible, and convenient to use, and many consumers rely on their plastic to make one off purchases as well as larger purchases. However, what should you do if you have old cards that you no longer use?

In many cases consumers clear the balance on their credit cards, and in a bid to try and eliminate the chances of getting into credit card debt again they cut up their old cards. However, this may cut out the temptation to run of credit card debt again in the short term but it is not a long term solution. This is because when you cut up your card it is not cancelled, and this means that you can easily re-order your card whenever you need to and start spending on it again.

There are a number of benefits to cancelling old credit cards that you have paid off. The first is clearly to try and avoid getting back into debt on your card, which can be easily done if your account remains open.

However, there are other benefits. For instance, you could find yourself eligible for far better offers on credit card deals from different providers when you cancel your old cards, as quite often special deals and packages on credit cards are not available to those that already have existing credit card accounts.

Another major benefit is that by clearing your credit card and then closing your account, you could see an improvement in your credit rating, which is particularly useful for those with a tarnished credit rating.

It is a good idea for everyone to have one credit card to hand, even if it only has a low credit limit, as this can prove invaluable in the case of emergencies or unexpected payments. However, if you have more than one card and you have repaid the other cards and do not tend to use them it is advisable to get them cancelled.

Cancelling your credit card is easy, although you may need to check and ensure that the card has been cancelled a month or two after you have made initial contact with your credit card provider – this is a safety check that will enable you to make sure that the account closure went through smoothly.

You can cancel your credit card in one of two ways, and this is by contacting the company in writing or contacting them by phone. Often the former is the most effective way, particularly if you use recorded delivery post, as this will mean that you have proof that you cancelled your card, but make sure that you keep a copy of the letter.

If you cancel your credit card via telephone then you should ask the credit card company to send out confirmation of account closure so that you can be certain that your cancellation request has been processed.

Another reason that you may wish to cancel your old credit card is because you have found a better card, such as a 0% balance transfer card, and have transferred the debt from your existing card onto the new one. In this situation you may wish to cancel your existing card once the balance has been transferred.

However, you may want to try and find a 0% purchase credit card to run alongside your 0% balance transfer card so that you have a credit card to make emergency purchases on. Unless your 0% balance transfer card also offers 0% interest on purchases you should avoid making purchases on this card as it could cost you a fortune in fees and charges