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How to cancel a credit card

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Although it’s generally recommended that you don’t cancel your credit card, there are certain situations where closing your credit card account may be necessary.

If you decide it’s time to part ways and are wondering how to cancel a credit card, there are a few things to be mindful of so that you don’t negatively impact your credit score.

Reasons to cancel a credit card

There are a few instances where cancelling your card may be necessary, including:

  • Divorce or separation: if you’re separating from your partner, it’s important to close any joint accounts as soon as the separation begins.
  • High annual fee: if you think the annual fee on your card outweighs the benefits, this is a good reason to cancel your card. However, you may be able to switch your card to one with lower or no annual fee which lets you keep your credit history and protect your credit score.
  • Trying to limit your spending: if you’re having trouble staying on budget, getting rid of your credit card can help get your spending under control. But in this case, cancelling your card should be a last resort. If you’re trying to reduce your spending, consider other strategies first, like locking/freezing your card or leaving it at home while you go shopping.

How to cancel a credit card: a step-by-step guide

If you’re set on cancelling your card, follow these steps to reduce the impact on your credit score, and make sure you don’t miss out on any potential rewards or deals.

1. Contact your credit card company and see if they’ll give you a better offer

If your terms are no longer favourable or your card has a high annual fee, you should see if your credit card issuer will give you a deal before you decide to cancel your card. It’s difficult for credit card companies to get new clients, so they may be willing to give you a deal — especially if you mention that you’re thinking of cancelling your card.

Another option is to switch to a better credit card with a lower annual fee. Downgrading will allow you to keep this card as part of your credit history, which is good for your credit score. Alternatively, if you’re working to pay off credit card debt, you could consider switching to a balance transfer card, which temporarily offers lower interest rates to help you pay off your debt.

2. Redeem unused rewards

It’s almost impossible to redeem any rewards once you’ve begun the process of cancelling your card. So, it’s important that you redeem any points you’ve acquired before starting the cancellation process.

3. Pay off the balance on all credit cards in full

You won’t be able to fully cancel your credit card until it has a zero balance. And since cancelling one of your credit cards will reduce your overall available credit, it’s important to pay the outstanding balance on your other credit cards so your credit utilization ratio doesn’t rise dramatically and damage your credit score.

4. Contact your bank or credit card company to cancel your card

For security purposes, most banks and credit card issuers won’t let you cancel your credit card account online. You’ll need to contact your card issuer by phone to start the cancellation process. When doing this, you should confirm with the representative that the balance on your credit card is $0 before you cancel it.

5. Cancel recurring payments

When you cancel your credit card, you’ll have to update any memberships or subscriptions that are normally charged to your card. Otherwise, these accounts and services may be suspended until you update your payment information.

6. Double check that your account is closed 

About two months after you close your card account, check to see that it in fact has a closed account status. If not, there may have been an error with the bank or credit card company, and you’ll have to follow up to notify them that the account wasn’t closed properly.

7. Dispose of the card

After you’ve cancelled, it’s important that you cut up your card and dispose of it. Even after your card is cancelled, your security could still be compromised if you don’t cut your card and someone finds it.

Can cancelling a credit card hurt your credit score?

Cancelling a credit card may have a negative impact your credit score, depending on how long you’ve had it for and what its limit is.

When you cancel a credit card account, you’ll decrease your total available credit, which could inadvertently damage your credit score if you still have a balance on your other credit cards.

However, there are certain precautions you can take to reduce any negative effects, including:

  • Try to keep your oldest credit card with the highest credit limit open. Generally, older accounts are better for your credit score because they show a longstanding payment history to the major credit bureaus. So if you’re going to cancel a card, try to avoid cancelling your oldest card so you don’t appear to have a short credit history.
  • Cancel when you won’t need a good credit score for a few months. If you need to cancel your credit card, you could plan to cancel it during a time when your credit score may not be as important. For example, you should avoid cancelling a credit card right before getting a mortgage or getting an auto loan.

How cancelling a credit card impacts your credit utilization ratio

Your credit utilization ratio is the percentage of your total available credit that you’ve used. This figure accounts for 30% of your credit score. You can calculate it by dividing the total of all your credit balances by the total of all your credit limits.

When you cancel a credit card, even if the card you’re closing has a zero balance, you’re decreasing your total available credit limit. This could drive up your credit utilization ratio and harm your credit score.

For example, if you have two credit cards, each with a limit of $1,000, you have a total credit limit of $2,000. Let’s say you want to cancel one of your cards, which has a zero balance, but you still have a balance of $500 on the card you want to keep. Your credit utilization ratio is 25% ($500/$2,000 = 25%). But if you close one of your cards, your new available credit limit will be $1,000, which will increase your credit utilization ratio to 50% ($500/$1,000 = 50%).

How to cancel a credit card from a major bank

If you’re looking for information on how to to cancel credit cards for TD, RBC, CIBC, BMO, see below.

How to cancel a credit card with TD Bank

To cancel a credit card with TD, phone their customer service line at 1-888-561-8861.

How to cancel a credit card with BMO

If the credit card you wish to cancel is associated with BMO, you can visit your local branch in person or call them at 1-800-361-3361.

How to cancel a credit card with CIBC

If you’re with CIBC, you can call 1-800-465-4653 to talk to a customer service representative, who will help you cancel your card.

How to cancel a credit card with Scotiabank

To cancel your credit card with Scotiabank, call 1-866-267-4935 to speak to a representative.

How to cancel a credit card with RBC

If you would like to cancel a card with RBC, you can phone them at 1-800-769-2512.

Frequently asked questions

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