How to close your credit card

Having too many credit cards can make it difficult to keep track of payments due, annual maintenance, and due dates. To avoid the hassle and prevent misuse of unused credit cards, it makes sense to close them. This involves going through a formal closing procedure to notify the credit card company or the bank. Here is how to go about it.


First, it is important to pay all unpaid dues to the credit card company. Any expenses on the card after the billing cycle must also be paid in advance so that no dues are generated.

Closure form

Complete a credit card closure form as prescribed by the credit card company, stating the cardholder’s name, credit card number and the reason for the closure. The bank account number, which was linked for the automatic payment of contributions by card, should also be mentioned for the dissociation. If there is an unpaid loan on the credit card, it will be pre-closed, which could result in a penalty.

Closure confirmation

Upon receipt of the request, once you have paid the dues, the credit card company will close the card and notify you.

Card destruction

Once you have received the confirmation of the closure, you must destroy the card by cutting it into small pieces.

Effect on credit rating

Closing a long-standing credit card can negatively impact your credit score as the average holding period of held cards decreases upon cancellation. So it makes sense not to close a card right before applying for a new loan.

Points to note

1. If the card was issued on the basis of a fixed deposit lien, the lien will be waived once all card fees have been paid.

2. It is best to redeem all reward points associated with the card before cancellation.

(The content on this page is courtesy of the Center for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava, and Labdhi Mehta.)

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