How to cancel a credit card in 5 simple steps

5 steps to properly cancel your credit card

Follow these steps to cancel a credit card successfully:

1. Pay or transfer the outstanding balance. Make sure the balance on the card is $0 so that you can completely close the account.
2. Use any reward points. Redeem your points for rewards or transfer them to another loyalty program so that you still get value from them.
3. Cancel direct debits. Avoid penalty charges and other issues by transferring or cancelling direct debits.
4. Cancel the card. Depending on the provider, you could cancel your credit card over the phone, online or in writing. Make sure you keep a record of the request by taking a screenshot, reference number or copy of the documents.
5. Destroy the credit card. Once your credit card provider has confirmed the cancellation, cut the card into pieces (for security) and throw it in the bin.

What else should I think about before cancelling my credit card?

• Annual fees. If your credit card has an annual fee, check when it is due to be charged so you can avoid paying it before you close your account. You can do this by looking at your account history or asking the credit card company.
• Applying for a new credit card. If your plan is to cancel one card and apply for another one, think about how long it's been since you last applied for a credit card. If it's been less than 12 months, that applying for a few cards in a short amount can have a negative impact on your credit history.
• Cancelling a card can actually hurt your credit score. Having a credit card with a low credit limit that you always pay off on time actually helps you build your credit score. Especially if you've had the card for a long time. Cancelling it can impact your credit score because the card was actually helping your overall score. But if you have multiple credit products, reducing that number can improve your score too.

Finder survey: How many credit cards do people usually have?

What number do I call when I want to cancel my credit card?

Many credit cards include a phone number on the back that you can call for account enquiries and cancellations. Otherwise, here are details for contacting the major card companies to cancel your card:

Frequently asked questions

• Why would I cancel my credit card?

  There are many different reasons people cancel a credit card. Some of the most common reasons you might want to cancel your card include:

  • If you have an introductory credit card offer or $0 annual fee offer that is about to end.
  • If you want to cut down on your interest charges.
  • If you're not using the benefits of the card (rewards, complimentary insurance etc) and are paying a high annual fee.
  • If you have lost your card or suspect it’s been stolen.
  • If you don't want to be tempted to spend more than you can afford.

• I want to cancel two credit cards. Will this have a negative effect on my creditworthiness?

  Each time you apply for credit or close a credit account, the details are reflected on your credit file. While lenders might view too many listings as a risk, closing two accounts to minimise available credit is unlikely to hurt your credit score in the long run. Just remember to close the accounts properly so that there are no outstanding debts or defaults for either of the cards.

• I cut my credit card up but did not cancel it. Can I get a replacement card?

  If you haven't gone through the steps of actually closing your account, you can get a replacement card by calling your credit card provider. Keep in mind that just cutting up a card won't change the fact that your account is active, so fees and charges may still apply even if you don't have a physical card.

• How will I know when my account has been closed?

  The provider will send you confirmation of the account's closure once the process is complete. Save these details in case there is ever any question in the future about the account.

• Will I be charged an annual fee when I cancel a credit card?

  If you cancel a credit card before the date that your annual fee is charged, you will not have to pay a new annual fee. If you are not sure when the annual fee is charged, contact your provider to find out. You should also make sure that there is no balance on the card.

• What happens if I don't cancel the card but just never use it?

  If you don't use the card but have a balance – including from an annual fee – you will need to make minimum payments by the due date on each statement. Otherwise you could be charged late payment fees, which will add to the account balance.

  If the account has no annual fee and no balance, keeping it open won't usually cost you anything. But you should still regularly check the account details to help protect yourself against fraud.

• I am getting ready to buy a home, but have been advised to close any credit card accounts that I don't need or use often, why?

  One of the items that lenders look into is your available credit, which is usually in the form of personal loans, other mortgages and credit card accounts. Too much credit is considered a risk and can factor into a bank's decision on how much they will lend you for a home loan.

  You could cancel a card, especially if you have more than one. But another option is simply to lower your credit limit a few months before you apply. This can lift your borrowing power.

Written by

Amy Bradney-George

Editor

Amy Bradney-George was the senior writer for credit cards at Finder, and editorial lead for Finder Green. She has over 16 years of editorial experience and has been featured in publications including ABC News, Money Magazine and The Sydney Morning Herald. See full bio

Amy's expertise

Amy has written 565 Finder guides across topics including:

• Credit cards
• Frequent flyer
• Credit score
• BNPL
• Money management
• Sustainability