How To Cancel Your Credit Cards


Every now and then, while we are in the process of getting out of debt, we do things that we think are right but end up costing us in the long run.  One such incident is canceling your credit cards.

For some reason or another we believe that canceling the cards will stop us from spending more money and get us out of debt faster because we won’t have that option to use them.

While that may hold true, there are a couple of things you must consider before you cancel those credit cards.

Consider This…

First, if you cancel your card with a balance on it, the credit bureaus will see this as more debt and less credit hence cutting down your credit score.  What happens is you are in essence increasing your debt-to-credit ratio.  If you don’t know what this is, just know it is just one of the factors considered in your credit report.  

Second, if you close out of too many accounts at once this can also have a huge effect on your score as well.  When closing your credit card accounts there is a specific way to handle this, and if you get it wrong you may end up paying for it down the road.  Follow the steps below and you shouldn’t have any problems.

How To Cancel Your Credit Cards

  1. Pay Off The Balance First.  Before you close any card make sure your balance on the card has been paid in full.  This will ensure that you won’t affect your credit score.  If you’re not sure, give your credit card company a call and they will assist you in finding what your balance is.
  2. Cancel Your Newest Card First.  Once the balance has been paid in full you want to start with your newest card first.  Why that card?  Because cards with a shorter history have less effect on your credit score.  A credit card you may have had for several years will have a more significant effect on your score. 
  3. Cancel Your Next Card 6 Months To A Year Later.  Once you’ve canceled your first card I want you to wait at least 6 months to cancel your next card.  Again, the next card you should cancel is the newest one.  So why wait 6 months to a year?  Because cancelling too much credit at one time will have a negative affect your score. 
  4. Keep Some Credit.  I also recommend not canceling all of your cards as well.  It’s always good to have some active credit which will help you boost up your credit score.  Keep at least one card open and use it every now and then.  A good card to use would be a gas card.  For example I have a Marathon Master Card which I use to get gas with.  This way I get great rebates on my gas and also build up my credit score at the same time.

Share Your Tips

Do you have any tips you would like to share on canceling credit cards?  If so leave a comment here and let us know.



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  1. Mike,
    Thanks for the comment. If you have any questions feel free to comment or email me.


  2. Some pretty good points there. How does this work for Canadians?

    I heard that just stopping using your credit cards and not renewing them was acceptable way to go. With a zero balance of course. I just got an new cards for credit card that I haven’t used in ages and wasn’t going to activate them. Do you see any problems with this? I don’t need more credit than what I’m using already

  3. That’s a great question Darren. To tell you the truth I not sure what the Canadian regulations are. However I believe you will be better off with less credit since you said you really don’t need it anyways. I’ve considered getting a new credit card myself recently but I don’t want to have anymore than 2 cards because it always seems the more credit I have available the more I spend. That’s not saying your situation is the same but it’s just what I’ve noticed.

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