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 We’ve all seen images of people wielding a pair of scissors and slicing up their credit cards, promising to never go into debt cut up credit cardsagain. However, truly canceling a credit card takes more than cutting up a piece of plastic. It may also not be a smart idea if you want to stay credit worthy.Here are ten important things to remember if you are contemplating closing your credit card accounts:

  1. Do not cancel an account that still retains a balance. Keep an account open until you have paid it off in full. Companies can raise your interest rate up to the maximum allowed in order to penalize you for closing the account if you still have a balance.
  2. If you plan on making any large purchases in the near future, such as a house or a vehicle, you may want to reconsider closing your accounts. It may decrease your credit worthiness. If you plan to cancel several cards in the same time period, you may reduce your credit score.
  3. If you just have too many open accounts, consider consolidating your card balances on lower interest cards and then close the remaining accounts.
  4. When contacting the credit card company, make sure you are prepared to write down the details of the conversation, including the date, the time, and with whom you spoke about closing the account.
  5. Ask for a written confirmation to be sent by mail. File the confirmation when you receive it in case there is ever any question about the status of the account. If you do not receive a written confirmation, follow up with the company to ensure your request has been honored.
  6. When you have canceled a credit card account, ask the company representative to report your cancelation to the credit bureaus as having been “cancelled by customer’s request”.
  7. Good customers may be connected to a special department so a representative can negotiate a deal with you to stay. They want to keep your business and might offer a lower interest rate o upgrade the level of your account. You may have some leverage in the negotiation process. If you current card does not offer something that you are interested in, now is the time to inquire.
  8. Listen to the offer details carefully. It may be worth your while to consider the deal if it beats other credit cards you have.
  9. If you decide you are not interested in the new offer, do not be intimidated by the sales tactics. Cancel the card without any hesitation.
  10. For those who have had problems with credit card spending, it may be worth it to close the accounts and avoid the temptation all together. Your credit score may take a slight hit but when you get back on track, you can then focus on rebuilding your credit.


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