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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.
I’ll share tips for folks looking to cancel a credit card.
3 Tips When Canceling a Credit Card
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.
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.
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
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.
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
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.
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
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
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.
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: