RBI Issues Circular On Levying Unfair Interest Charges On Customers

The popularity of credit cards is continuously increasing due to cashback, reward points and other benefits. While earlier having a credit card was considered a status symbol, now it has started being considered a medium for easy payment. This provides many benefits like online/offline shopping, easy transactions and making payments as per your convenience.

Despite all the benefits, you too might want to close your credit card for some reason. It could be to control your rising expenses, preferring to use debit cards and UPI again, avoiding credit card annual fees and so on. Therefore, before closing the credit card, you should know a few things, so that closing the card does not affect your financial journey.

Review your financial needs before closing a credit card. Understand whether high fees, interest rates or changes in spending patterns are the real reasons why you want to close your credit card.

Once you have understood the reason and have made up your mind that you want to close your card, then there is a checklist to proceed accordingly.

First of all, if you get reward points in the card, then ensure that you have redeemed all your points because with the closure of the card, all the reward points will also become useless. Secondly, before closing the card, settle your entire outstanding dues.

If you do not settle the dues, it will affect your credit score because it will be considered as payment default or late repayment and you will have to pay late fees.

Apart from this, know that if you have been using a credit card for a long time, then closing that credit card can affect your credit score. If you have made any auto-debit from your credit card, then before closing the card, change the payment mode i.e. remove the linked credit card from the merchant platform.

After all this call the contact support number. Ask the bank’s customer service team to initiate the process of closing your credit card account. Send a formal closure request via email. Include your name, address, last 4 digits of credit card. Write clearly that you want to close your credit card. Receive the closure confirmation. Ask for a written confirmation of credit card account closure. These documents are important for your financial records.

After receiving confirmation, destroy your card in such a way that no one can misuse it. This will help in avoiding any fraudulent use of your closed card.