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Know How and When to Cancel a Credit Card

There comes a time in the life of every credit card owner when you decide it’s time to cancel at least one of your credit cards.  Maybe you just don’t ever use the card anymore and figure it’s doing you no good just sitting in your wallet. Perhaps you just don’t like your current interest rate or the fact that you don’t get anything back from the card. No matter the reason, there are some things you need to keep in mind before you take the step towards cancellation.What’s Your Balance?If you have any balance on your card, you need to pay that off. Anything other than a zero balance when you try to close a card looks to the credit card company like you are trying to get away without paying your debt. This can end up costing you with a ding on your credit rating.Need a Loan?If you think you may be taking out a large loan in the next year or two (say for a car or house) you may want to think twice before canceling your credit card. When banks look at your credit history for loans, they like to see that you have had a long, positive relationship with a credit card company or two. It makes you seem more reliable as a customer.Do You Have Too Much Credit?Did you know that there is a careful balance that has to be kept when it comes to the number of credit cards that you have? Your credit rating relies on your total credit availability. If you have a lot of open cards that means you are a riskier proposition as you could choose to start using them all and get into deep credit debt.How to Cancel a Credit CardEventually, you will have to make the decision to cancel at least one of your credit cards. Once you do, you need to make sure you do it right.Pick up the PhoneThe first thing you should do is pick up the phone and call the credit card company. You will need to speak to a customer service agent and ask them to cancel the card for you.Pick up a PenA call is not enough. You need to back it up with a letter to the credit card company explaining that you do, indeed, want to cancel your card and mention that you called to do so (with the date of that call).Pick up your MailWatch the mail for confirmation from the credit card company that they have, in fact, cancelled the card.Pick up your Computer MouseFinally, you want to make sure the credit reporting agencies know you have cancelled the card. Keep checking back with them to see that they have shown the card closed. This can take a few months, so be patient. But if after three or four months there has been no change, you need to call the credit agencies and let them know your card accounts have been closed.

Stephen Sikes is the owner of the credit card comparison site
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