Are You Able to Just Cancel a Credit Card?
When you have credit cards, it’s important to know how they work and how to cancel them in case of emergency If you’re wondering if you can just cancel a credit card without any penalties, read this useful clear credit article for more information!!
Although it’s widely accepted to use credit cards in Australia, it can be one of the most costly ways to rack up debt. If you’re newly independent and financial adult life is fresh on your horizon, taking on manageable amounts of credit card debt and repaying them diligently will help solidify a good credit history. On the other hand, if you have too many outstanding debts from different sources, closing a credit card account can reduce your overall amount owed.
If you cancel a credit card, make sure to repay the outstanding balance first. You can do this by using your savings or transferring debt to another personal loan or credit card. If you don’t repay the debt, your issuer might put a default on your credit report. That will lower your score and could have an impact if you’re trying to get another loan or credit card down the road.
You can typically close a credit card account through your online banking or by calling the card issuer. Most of the companies in Australia that offer credit cards allow cardholders to create online accounts to easily manage card-related services, including cancelling the card. By logging into your account, you can check if you have any outstanding credit card debt, but you’ll need to get a payout amount from your card issuer before closing your account.
The payout amount is your card’s balance plus any interest charged. Because interest accumulates daily on any outstanding balance, the figure changes regularly. You may be able to find this information online or by speaking with a representative from your credit card issuer. If you have a credit card through your bank, you can also cancel it by visiting a local branch.
After you cancel your credit card, the company should send you a confirmation. In some cases, the issuer might also charge you a fee for cancelling the card, which must be paid before cancellation is finalised. Conversely, if too much was paid and refund is due, account details will need to be provided so the refund can be organised.
If you still owe money to your credit card company, you must pay that amount off before cancelling the card.
If you’re debating ignoring your credit card debt, don’t. You’ll only accrue more interest on the balance and run the risk of lowering your credit score. Try to see if your credit issuer offers a repayments calculator first. This can help give you an estimate for how long it might take before the debt is entirely repaid–at which point you can cancel your account. That being said, if you think financial difficulties will get in the way of repaying what’s owed, talk to your card issuer urgently. They may have some ideas that could help lighten the load financially
You may have to transfer your debt to another credit card if you want to pay it off. For example, see if you qualify for a balance transfer.
If this is the case, find a credit card with an interest-free period. On the other hand, if you have a mortgage on your home, see if refinancing is an option for you so that all of your debt can be consolidated into one loan payments. Oftentimes, these types of loans come with lower interest rates than credit cards do.
Having poor credit can feel like being caught in quicksand, but there are options available that can help you get back on your feet. Clear Credit Solutions is a credit repair service specializing in removing negative listings from your report so that applying for finance becomes possible again. Get in touch with us today to see how we can clear credit!