Card cancellation could be a necessity at times. You could be holding on to a few credit cards and managing them might seem difficult. Cancelling one or more of your cards could work out as a solution in this scenario. Another common reason why people often want to cancel one or more of their cards is because they want to upgrade to a new card. You might also want to give up your credit card in case your bank or the issuer has raised the interest rates or the annual finance charges significantly. Cancelling a credit card could also help you improve your credit report or increase your credit score as you will be able to do away with monthly repayments that you simply cannot afford. This will, in turn, help you improve your creditworthiness so that you can find loans more easily. Cancelling a card is quite an easy and straightforward process. Banks usually see you through the entire procedure. You can cancel your cards in various ways. It’s just important to keep few important things in mind before you terminate your credit card.
Different Ways to Cancel a Credit Card
The ways to close a credit card might differ from one bank to the other. However, there are few common ways of closing a credit card which are mostly applicable across all banks in Singapore. These ways are listed below:
Cancellation by Calling the Customer Care
This is one of the swifter and easiest ways of cancelling a credit card. Most banks provide you with this facility and you can make a credit card cancellation request from anywhere and at any point. All you have to do is call your bank’s customer care hotline or the dedicated card cancellation department, if there’s any. You must have your card details and identification details at the time of making this call.
Some banks or credit card issuers might register your cancellation request and process it when you make the call. They will verify your identity before processing this request. The representative from the bank might also ask you state the reason for placing this request. On the other hand, few banks might ask you to send a written request to confirm the cancellation.
Cancel Your Credit Card by Visiting the Bank in Person
This is another way of cancelling your credit card. By visiting the bank in person, you can ensure that the process goes through smoothly. You can also look closely into any issues pertaining to your credit card account. You might have to prove your identity before the bank processes your request for cancellation of the card. The bank may also ask you to state the reason why you want to cancel the card. Additionally, you might need to fill a credit card cancellation form, depending on the bank you have your card account with. However, this procedure of going to the bank consumes a lot of time.
Terminate Your Credit Card Through a Written Request
You can also cancel your credit card by submitting a written request to the bank or the card issuer for the same. You can send your written request to the bank through a registered or an ordinary post. You can find the address online or you could call on the customer care number. You will have to include your credit card details such as account number and credit card number within this letter. Based on this written request, banks will process your cancellation request. You will receive a confirmation from the bank once your credit card is cancelled. This confirmation may be in the form of an SMS or a mail. The bank might also confirm your credit card cancellation by calling you or sending you a confirmation letter at your address.
Cancellation of Credit Card Online
This is a convenient and easy way to cancel a credit card. All you have to do is to simply visit your bank’s website and log in to your internet banking account. Once you log in to your account, you will be able to find a dedicated option for cancellation of a credit card. You have to select the particular credit card account(s) you want to terminate. You might have to fill up a cancellation form before your request is registered. The bank might get in touch with you through a call once the request is viewed. Generally this call helps the bank to confirm your cancellation request and to find the reason as to why you want to cancel your credit card. Cancelling your credit card online is usually swifter and you can place the request at any point in time.
Most of the banks in Singapore allow you to cancel a card online through internet banking facility. For instance, DBS credit cards can be cancelled online by using their digital banking service. You just need to know the last four digits of your credit card along with the PIN.
Cancel Your Credit Card Through Mail
Some banks also allow you to place a credit card cancellation request through email. You might have to download the credit card cancellation form which can be found directly on the bank’s website. You have to fill this form completely and send it to the bank or the card issuer through an email. Based on the form submitted through mail, banks will process your card cancellation request. You might get a call from the bank regarding asking you to state the reason behind the cancellation of your card. Once the bank processes your request and your credit card is cancelled, you will receive a confirmation from the bank.
Terminate Your Credit Card Through Mobile Banking
When it comes to performing banking operations, mobile banking is one of the most popular modes today. You can not only perform day-to-day banking operations using mobile apps, but you could also cancel your credit card through this channel. Most banks today provide dedicated app(s) which facilitate banking for you. Depending on the bank, you might be able to place your card cancellation request through these apps. You might have to fill in few important details pertaining to your credit card before your cancellation request gets registered.
Once the bank finds your request, they might want to get in touch with you through a call to confirm your request and find the reason for the credit card cancellation. Once the credit card cancellation request is processed from the bank’s end, you will be informed about it through a mail, an SMS, a call, or written communication.
What Should You Keep in Mind While Cancelling a Credit Card?
Cancelling a credit card could be a really important decision and you need to really think before you go ahead and place a request with your bank for the same. The primary considerations you need to make before cancelling a credit card include:
Clear or Transfer the Outstanding Balance on Your Credit Card
If the credit card account you want to close has an existing balance due, you must ideally hold on to it before the outstanding amount is cleared in full. If you still need to urgently terminate your card, the bank or your credit card issuer might ask for full and immediate payment or they could elevate the interest rates charged on the due amount significantly. In such cases, your credit utilisation ratio will shoot up, which in turn have a negative impact on your credit score.
In such cases, you will have to make regular payments every month until your outstanding bill is cleared completely. However, it’s considered ideal to clear off all your dues before you decide to terminate a credit card. Alternately, you can consider the option of balance transfer if you’re in real urgency of cancelling a credit card. You must ideally transfer your balance to an unutilised credit card or one that offers a better rate of interest.
Utilise Your Reward Points Before You Cancel a Credit Card
Many credit cards in Singapore earn you reward points on your eligible transactions. These points are deposited in your card account and can be redeemed for gifts or to offset future purchases. You can redeem these points directly online using internet banking or mobile banking services. In some cases, you might also be allowed to redeem the points directly at the participating outlets.
When you close your credit card account, you will no longer be able to redeem or use these reward points. You must ideally check your reward points balance before you make any decision of cancelling your credit card account. If you have a significant balance in the form of reward points, you might want to reconsider your decision of cancelling the credit card. Ideally, you must hold on to your decision of terminating the card at the moment and redeem your points instead. Once you have utilised all or most of these points, you could go ahead with your decision of cancelling the card.
Impact of the Cancellation on Your Credit Report
This is another important parameter you should think about before cancelling a credit card. You might want to cancel or terminate a credit card which has huge debt outstanding. You might even want to cancel a credit card where you have failed to make complete repayment on time. You probably haven’t understood how a credit report works if you think cancelling a credit card will improve your report or increase your score.
Cancelling a card neither omits it from your report nor does it remove the card’s payment history from your credit report. Rather, such details are highlighted on your report for a significant amount of time. Before you decide to terminate your credit card, you must make sure that your account is in good standing with the bank. Only this will help you improve your credit report or increase the relevant score. Additionally, your credit report will also take a hit if you cancel your credit card without clearing your outstanding balance.
Ensure Receiving a Confirmation from the Bank Upon Cancellation
Last, but not the least, ensure that your credit card cancellation request was processed. Banks and credit card issuers usually take care of this bit. Once your credit card account has been cancelled, banks will send you an email or an SMS stating the same. In some cases, they call you on your number and confirm your credit card cancellation request being processed, while in others they simply send a written confirmation to your address through post.
It is very important for you to receive the confirmation in order to avoid any unnecessary hassles in the future. A situation of error where your request was not processed properly can be addressed based on this confirmation. In case you don’t receive a confirmation from your bank or the credit card issuer over a significant time period, you should immediately get in touch with them regarding the same.
Cancelling a credit card could be a really important decision or one that favours your financial standing. However, you must take a moment in asserting if this decision will really help you in the long run. You must avoid cancelling a credit card that benefits you the most in the form of gifts, privileges, and cashback or reward benefits, unless you’re in an urgency or you can’t think of an alternate plan.
Moreover, you must only terminate a credit card if the outstanding balances in the respective card account have been fully cleared. In case you cancel your card without clearing the due amount, your credit report and credit score might be seriously affected to the extent where you’re denied any credit facilities or loans in the near future. In the end, it’s usually good to get rid of one credit card or more, in case you’re holding on to several cards. It will help you manage your repayments on the cards in a better way.