3 Quick Tips for Folks Who Want to Cancel a Credit Card

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3 Quick Tips for Folks Who Want to Cancel a Credit Card

Million Mile Secrets3 Quick Tips for Folks Who Want to Cancel a Credit CardMillion Mile Secrets Team

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Million Mile Secrets reader, Mark, emailed:

How do I cancel a credit card?

I’ve written about when and why you might cancel a credit card.  Sometimes, the perks of a card don’t justify its annual fee.

To cancel a card, call the number on the back of your card.  You’ll speak with a customer service representative at the bank who can assist with closing your account.

But before you cancel, consider the potential impact to your credit score.  And as an alternative to canceling a card, I recommend seeing if you can downgrade to a no annual fee card.  This way, you can save on the annual fee expense while keeping your length of credit history and credit line.

Cancel A Credit Card
To Cancel a Credit Card, Just Call the Number on the Back of Your Card and Speak With a Bank Representative

I’ll share tips for folks looking to cancel a credit card.

3 Tips When Canceling a Credit Card

Link:   Does Canceling a Credit Card Hurt Your Credit Score?

Link:   When To Cancel Your Credit Cards

Link:   Why Even Thrifty Folks (Like Me) Should Consider Annual Fee Cards

It’s never a good idea to cancel a card as soon you earn the sign-up bonus.  Because this can hurt your relationship with the bank.

Instead, I recommend trying a card for ~10 months to see if the perks make it worth keeping.  And if the card has no annual fee, you can keep it forever!

Also, I wouldn’t cancel a card you’ve had for a long time.  Because getting rid of an old card will impact your length of your credit history and credit utilization, which are factors in calculating your credit score!  That said, if you have lots of cards, getting rid of 1 or 2 will likely have a minimal impact to your score.

Cancel A Credit Card
Canceling a Credit Card Could Impact Your Credit Score Because Your Length of Credit History Might Decrease

And keep in mind, if you cancel a credit card, it remains on your credit report for up to 10 years.  There’s no way to erase the account information and payment history from your report.

If you’re ready to cancel a card, keep these 3 tips in mind.

1.   Be Sure You Won’t Lose Your Miles & Points

Link:   Will You Lose Your Miles & Points After Canceling a Credit Card?

The potential to lose miles or points when canceling a card depends on the type of card you have.

You will NOT lose airline miles or hotel points already in your airline or hotel account after canceling a card.

Cancel A Credit Card
Make Sure You Don’t Cancel a Credit Card and Lose Your Flexible Bank Points!

But be careful with flexible bank cards earning AMEX Membership Rewards, Chase Ultimate Rewards, and Citi ThankYou points.  Because it’s possible to lose ALL these points when you cancel a credit card!  You can read my post with ways to preserve your flexible reward points.

2.   Ask the Bank for a Retention Offer

Link:   How to Get Your Annual Fee Waived

Banks don’t want to lose you as a customer.  Even if you’re just canceling one of many cards issued by the bank, they might incentivize you to keep your card open.

When you call the number on the back of your credit card to cancel, you’ll speak with a customer service representative.  After mentioning you’re looking to cancel the card, the representative might offer points or a statement credit to keep your account open.

For example, team member Keith kept his Starwood Preferred Guest® Business Credit Card from American Express open after receiving a retention bonus of 7,000 Starwood points.

Cancel A Credit Card
Getting a Retention Bonus Can Make It Worth Keeping a Credit Card Open Because the Points Might Be Enough for a Free Hotel Night!

Run the numbers when you receive an offer to determine if it’s a good deal!  You can also check FlyerTalk to find out how your offer compares to what other folks have received from banks such as:

  • American Express
  • Barclaycard
  • Chase
  • Citi

If there’s no retention offer and you decide to cancel the card, ask the representative to transfer the credit line from one card to another to prevent your credit utilization from increasing.  This isn’t possible with all banks, but it’s worth asking!  Team member Harlan has had luck doing this with AMEX, Chase, and Citi.

3.   Downgrade to a No Annual Fee Card

Instead of canceling a credit card with an annual fee, I typically recommend switching to a no annual fee card, if possible.

This way, you can:

  • Avoid having any impact to your credit score
  • Keep your credit line
  • Maintain your average length of credit history

And although you’ll technically have a new card, the account information stays the same.  So the card you downgrade to will NOT show up as a new account on your credit report.  This is great news if you’re concerned about Chase’s tougher application rules.  But keep in mind, you won’t be eligible to earn any sign-up bonuses when you downgrade to a different card.

Bottom Line

To cancel a credit card, just call the phone number on the back of your card.  Speak with a customer service representative and tell them you’d like to close the account.

Before you close a card, consider the potential impact to your credit score.  Canceling old accounts or cards with large credit lines can result in a credit score decrease.

And keep these tips in mind when canceling a card:

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If you convert a annual fee card to a no-fee card, might you be hurting your chances of getting a “new” card (say after 24 months) since you still have the card?

Million Mile Secrets

Because the account information stays the same, the new card you downgrade to will NOT show up as a new account on your credit report. But whether or not it affects your chances of getting a new card depends on what bank (or card) you’re dealing with.

For example, if it’s a Citi card, you can NOT earn the sign-up bonus from more than one card of the same “brand” within 24 months.

That said, when you downgrade a card, you aren’t earning a sign-up bonus. So in theory your 24-month clock should NOT re-set. And should not hurt your chances of earning another sign-up bonus.

Plan to cancel CSR. Already applied for CSP. Approved and transferred all points to the new CSP. Just wanted to confirm that I will not lose transferred points and there is no time limit within which I have to redeem the points transferred from CSR.

Million Mile Secrets

You’re right, Mahender!

Million Mile Secrets

You’re correct! As long as you keep at least one Chase Ultimate Rewards points earning card open, you won’t lose your Chase Ultimate Rewards points when you cancel a card. Just transfer all your points to the account you plan to keep before you cancel.

You can read more about it here: https://millionmilesecrets.com/2016/10/09/will-i-lose-my-points-if-i-close-1-of-my-2-chase-ultimate-rewards-earning-cards/

Thank you for the prompt response.

I’d burn the UR points first before canceling as the CSR points are more valuable than the CSP ones, if you do direct travel redemptions through Chase. CSR points are worth 1.5 CPP while CSP are worth 1.25 CPP when doing such redemption.

Million Mile Secrets

Good tip, Kalboz!

I had this same question (though I opened up a Business Preferred card). Once I transfer my CSR points to my CBP card, they are safe, right?