How to Close a Credit Card Account

Learn the correct way to close a credit card account to avoid later problems.

Sometimes it's a wise idea to close a credit card account so that you can better manage your credit card debt. Before you close any accounts, however, make sure you know how to do it the right way. (To learn when you might want to close credit card accounts, and how to determine which ones to close, see Closing Credit Card Accounts to Manage Debt.)

Follow this advice from Nolo's Solve Your Money Troubles: Debt, Credit & Bankruptcy, by Margaret Reiter and Robin Leonard, when you are closing credit card accounts.

Stop Automatic Deductions

If you have any bills automatically deducted from your credit card, such as a credit card protection plan, gym dues, or DVD rental fees, cancel those billing arrangements directly with the billing company before closing your account.

Request a "Hard Close"

Write a letter to the credit card company and request a “hard close.” If you don’t do this, the company may give you a “soft close,” which means new charges can go through, even though you asked that the account be closed. With a soft close, you are susceptible to credit card fraud or merchants, even ones affiliated with the credit card company, continuing to bill you monthly for services you don’t need or want and may not even have realized you were paying.

Some creditors may refuse to do a hard close until a certain amount of time has passed. If yours is one of them, find out how long you’ll have to wait and demand that the company send you a letter then, confirming that the account has been hard closed. As soon as you have paid off any outstanding balance, also ask for confirmation that the balance is zero.

Request a “Closed by Consumer Request” Notation

Request, in writing, that the credit card company report to the credit reporting agencies that your account was “closed by consumer request.” Accounts that are erroneously reported as “closed by creditor” will hurt your credit rating. Ask the company to send you written confirmation that the account was closed at your request.

After 30 days, check your credit report to ensure that it reflects that the account in question was “closed by consumer request.”

Use Dispute Procedures If Necessary

Once you cancel the card, if you receive a credit card bill for items you canceled directly with the seller or for charges you dispute, use the dispute procedures described below to challenge those charges. (To learn how to do this, see How to Dispute a Credit Card Billing Error.)

Get Confirmation When Your Account Balance Is Zero

You should continue to receive billing statements until your balance is zero. If you don’t, ask the creditor to send you regular bills to show the balance and your payments. When you have paid the account off, ask the creditor to send confirmation that your account balance is zero. 

Excerpted from Solve Your Money Troubles: Debt, Credit & Bankruptcy, by Margaret Reiter and Robin Leonard (Nolo).

Learn more about managing high credit card debt.

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