Closing a credit card may seem like a simple decision, but doing it the wrong way can negatively affect your credit score. Many people close unused or high-fee cards without understanding how credit scoring works, and later regret the impact.
In this blog, we explain how to close a credit card safely, when you should close it, when you should not, and the exact steps to follow to protect your credit score.
There are many valid reasons for closing a credit card.
Common reasons include:
Closing a card is not always bad, but it must be done carefully.
Closing a credit card can impact your credit score in multiple ways.
Main impacts include:
Understanding these factors helps you plan the closure properly.
Credit utilisation is the percentage of your credit limit that you are using.
Important points:
High utilisation can lower your credit score even if you pay bills on time.
Credit history length matters for your credit score.
Things to know:
Avoid closing very old cards unless necessary.
In some situations, closing a card is not a good idea.
Avoid closing your card if:
Keeping the card open may be better for your credit health.
Closing a credit card can be a smart move when:
The key is to follow the correct process.
Clear All Outstanding Dues
Before closing the card:
A card cannot be closed with pending dues.
Stop Using the Card Completely
Make sure:
This prevents issues after closure request.
Check for Hidden Charges
Before closure, verify:
Clear everything to avoid future surprises.
Contact Customer Care for Closure Request
You can close your card by:
Ask for a confirmation number or reference.
Get Written Confirmation
Always ask for:
This is proof that the card is officially closed.
After closure:
Check your credit report after some time to ensure correct update.
Follow these tips to reduce negative impact:
These steps protect your credit profile.
Sometimes, keeping an unused card is better than closing it.
Keep the card if:
You can use it occasionally to keep it active.
Many people confuse closure with blocking.
Key differences:
Choose closure only when you are sure.
Avoid these common errors:
Mistakes can damage your credit score for months.
Usually:
If not updated, raise a dispute with the bank or bureau.
Closing a credit card is not harmful if done correctly. The problem arises when people rush into closure without understanding how credit scores work.
By clearing dues, choosing the right card to close, and maintaining healthy credit usage on other cards, you can close a credit card without hurting your credit score.
Smart decisions today protect your financial future.