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Looking to cancel your credit cards?

One of the biggest myths of credit card is that cancelling your credit old or unused credit card, will increase your credit score. Read on to know what you should keep in mind before cancelling your credit card.

One of the big myths in the credit card world is the concept that your credit score will increase if you cancel your credit cards. However, it is far from the truth. When you cancel your credit cards, you will lose all your credit score.
Read this article to know how to cancel your credit cards without impacting the credit score. Here are some hacks through which you can cancel your credit card without affecting your credit score:

Know your credit score first

Before cancelling your credit card, make sure you check your credit score. Because if your credit card is unused, it means that you don’t have any credit score. Your every single transaction processed through credit card is tracked. It also shows how disciplined you are in repaying your debt. Hence, if you don’t have a good track record, cancelling your credit card is not going help.

Credit card Age

If you cancel the credit cards which you have been using for many years and keep the new ones, it can adversely impact your credit score. It is because a long relationship with card builds consistent history.

Pay your outstanding amount

Before cancelling card, it is mandatory to pay your outstanding amount. Without doing this process, your request to cancel credit card will not be accepted. Once you pay off the unpaid balance, you can call your lender and ask the next steps to cancel your credit card. It is always recommended to pay your dues on time because your late payment get tracked in your credit card history and it can affect your credit score.

Talk to your bank

Once your account balance is updated to zero, you can talk to your bank to register a request to cancel your credit card. Do not throw your cards away till your bank register your application to avoid annual fee payments.

Yes, cancelling your credit card can affect your credit score and increase your credit utilization ratio, but you can take precaution to avoid any credit score deduction.

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