Closure of credit card cause withdrawal of account from all facilities that are provided through utilization of credit card or credit card number. Therefore, before closing your card, you must check your reward balance and see how many outstanding reward points are there. Also, remember that few cards allow you to utilize the reward points to pay off your credit card bills.
You can terminate the pact any time by a written notice to the bank accompanied by the return of the credit card and any added credit cards cut into several pieces through magnetic stripe and full clearance of all outstanding dues. Termination will be only effective after the receipt of the cut credit cards and payments of all the outstanding dues are made to the credit card account. No joining, annual or renewal fees will be refunded on pro-rata basis.
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In a month or two, you must check your credit report to be sure that the credit card is reported as closed. Your credit report reveals details of all credit accounts held currently and in the recent. Your credit card must reflect as closed in your credit report. In case it doesn’t, stay connect with the bureau and the bank to correct it.
One key aspect that you must consider before closing a credit card is that after closure, your total credit limit automatically will roll down, which may result in a higher credit utilization ratio – the proportion of credit being used by you against the total credit available. A higher credit utilization ratio usually brings down your credit score. You may approach another bank for a new credit card or request a current one to increase the credit limit on another card you may have.
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