If you have multiple credit cards under your name, you must have heard people saying that you should get rid of the excess. This makes sense. Too many credit cards mean too many financial obligations on your head. This will ultimately affect your credit score, even if you pay all the dues regularly. Not only credit cards, but you must also keep other obligations to the minimum.
If you are already planning to close a credit card, and looking for the right process to do so, this is for you. Here’s a 10-step process of closing your credit card in Singapore.
Step #1
Close simply one account at a time. If you need to shut one account or several, constantly cancel them one at a time, start with the cards that charge you fees. It is recommended to cancel the more recent cards first and then the older ones. You may additionally desire to think about keeping playing cards that offer precise rewards programs. Choose which credit cards you’d like to close and then move ahead with the next steps.
Step #2
Pay or switch the outstanding balance. Make sure that you pay off the existing balance and stop using the card. If you can’t afford to pay it off, you can transfer the balance to another card that you do not plan on cancelling. If you try to close your credit card with a large balance amount, the financial institution may extend the activity charge or demand full and immediate payment. Moreover, it doing so will also affect your credit score, something you seriously don’t wish for. So, when you call to cancel your card, confirm that there is no balance on it.
Step #3
Transfer any reward points on the credit card. If you have any present reward factors on the card, redeem them for rewards or transfer them to your conventional flyer account before inquiring for the cancellation of the card. All unclaimed points will be wasted once you close the card and don’t make the right use of the outstanding rewards
Step #4
Cancel direct savings transfers. Make sure that you cancel all current direct credit transfers linked to your credit card to minimize any price disruption.
Step #5
Call to cancel your card. Once you’ve paid your outstanding balance and claimed your reward points, name your card provider’s patron provider department to inform them of your selection to shut the account.
When you call to cancel your card, the issuer may offer you something, such as a lower interest rate or more rewards points, to keep you as a customer. It may or may not be worth it to consider these offers, depending on why you want to cancel the card in the first place.
Step #6
Cancel your card in writing. It’s always a good idea to send the company a letter as well. This will help ensure that the account is really canceled, even if the customer service agent you spoke to makes a mistake. The letter must include your name, address, and credit card account number. Include the date that you canceled the card and the name of the representative you spoke to in your letter, and request that the company send you a written confirmation letter indicating that the card has been canceled. You may want to include proof of your final payment, such as a copy of a check. Send the letter by certified mail with a return receipt.
Step #7
Check for future statements. Try to log into your account or go through your credit card statements following your request to make sure that the card is really cancelled. Watch your deposit report. It can also take a number of weeks for adjustments to be reflected on your credit score report, but take into account to hold tabs on it to see if the cancellation affected your credit score.
Step #8
After you cancel your credit card, it’s a good idea to request a copy of your credit report and look at it carefully to confirm that it reflects the fact that you have canceled the card. It should not say that the account was closed by the issuer, as this will look bad to other creditors. If your credit report is inaccurate, you will need to contact the credit card company’s customer service department again and ask them to correct the way in which they reported the closure of the account to the credit reporting agency.
Step #9
Destroy your credit card. Once you’re certain that your account is closed, it is recommended that you reduce the card into tiny pieces to make it not possible for anyone to piece it back together. If you’re feeling greater cautious, discard the pieces at specific times or places.
Step #10
Your credit card provider should provide confirmation that your credit card account has been closed. If you haven’t received any notice of the account closure within 1-2 weeks, follow up with your provider.
Since cancelling a credit card can influence your credit score, it’s important to be strategic about when you do it. Avoid closing any accounts if you are in the process of applying for new credit. If you are planning to buy a house or a new car, wait until after the loan is finalized to cancel your card.
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