Credit Tips: How to Cancel Your Credit Card

Posted On: January 1, 2005

Author: otter
Guest
Posted: Fri May 30, 2003 1:31 am
Post subject: Trying to Cancel Credit Card

Hi all. I’ve had a Capitol One Visa for about 3 years up until about 2 months ago. After far too many problems than it was worth, I cancelled the card a little over a month ago today. Well I log on today to make sure that the account was closed out and find a charge from my internet provider for $21.00. This opened the account back up, interest and all. My question is this: How can Capitol One allow a charge to be applied to an account that was closed one month ago AND has a credit limit of $0 because of the cancellation? These guys are like a bad case of the crabs, I can’t get them out of my life. I HATE CAPITOL ONE!!!

Thanks in advance for any insight, sorry for the venting.

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Author: Verne
SENIOR MEMBER (Member for 2 yrs.+)
Joined: 14 May 2003
Posts: 487
Location: Midwest
Posted: Fri May 30, 2003 8:04 am

If you don’t have a balance with CapOne the interest rate shouldn’t matter. Just pay in full every month. That aside, be preventive and stop any recurring charges billed to that card. I had the same problem with Chase. After closing it twice, the card lived on. It says, “closed by consumer” on my credit reports yet at the same time shows I have available credit. Since I can use the available credit to boost my credit score I leave the Undead alone. I’m sure there’s a better way, but you could report it lost and ask them to reissue the card with different numbers and exp. date. Then close it. (Like I said, I’m sure there’s a better way but I always find the path of most resistance) You may want to reconsider closing it at all. You would lose the longevity of the account and the available credit. Unless you closed it with a balance, it may be in your best interest to keep it open.

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Author: Ira
SENIOR MEMBER (Member for 2 yrs.+)
Joined: 19 May 2003
Posts: 714
Location: NJ
Posted: Fri May 30, 2003 11:13 pm

I’ve had this happen several times. All you have to do is call the provider and point out to them that the account was closed on such and such date and no new charges will be honored. They have always credited the new charge for me and credit any finance charge that happened to acccrue. This will often happen when you have reoccuring charges. I agree that it SHOULDN’T happen, but oftentimes it does. Once the card is past its scheduled expiration date no new charges will be honored no matter what.

Do not let what you cannot do interfere with what you can do.

Ira

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Author: Eugene
SENIOR MEMBER (Member for 2 yrs.+)
Joined: 14 May 2003
Posts: 265
Location: Brooklyn, NY
Posted: Fri May 30, 2003 11:50 pm

I read an article once that at least some credit card issuers have two ways of closing an account - “soft” (when a new charge can reopen the account) and “hard” (when no new charges will be approved). It’s amazing how they redefine simple words when they want to maximize profits, ain’t it? Ask Capital One to really-REALLY close your account this time.

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Author: Guest
Posted: Sat May 31, 2003 8:41 pm
Post subject: Re: Trying to Cancel Credit Card

otter wrote:
Hi all. I’ve had a Capitol One Visa for about 3 years up until about 2 months ago. After far too many problems than it was worth, I cancelled the card a little over a month ago today. Well I log on today to make sure that the account was closed out and find a charge from my internet provider for $21.00. This opened the account back up, interest and all. My question is this: How can Capitol One allow a charge to be applied to an account that was closed one month ago AND has a credit limit of $0 because of the cancellation? Did you call your internet provider and imform them of canceling the Capitol One Account and that they will need to charge you on another account.. If you closed the account, and if this was a recurring Monthly Charge, it would still be allowed as a charge on your account.. ALso ,Just pay the Bill in full before the due date and there will be no interest..If this is a charge that you do not have any longer.. Just use the Dispute process. These guys are like a bad case of the crabs, I can’t get them out of my life. I HATE CAPITOL ONE!!! Thanks in advance for any insight, sorry for the venting.

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Author: rasca13173
Joined: 01 Jun 2003
Posts: 13
Posted: Wed Jun 04, 2003 12:08 pm

is it a good idea to cancel credit cards when you don’t use them……..i have 2 credit cards that i got 0% on purchases for a year…..i payed them off in a year without paying a cent in interest……now should i just cancel the cards or just keep them even though i will never use them…..would my credit rport suffer? does it make a difference?

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Author: adamh
Guest
Posted: Thu May 06, 2004 7:36 pm
Post subject: same boat

I am in the same boat with capital one. I canceled my account well over a month ago. Today I received a bill with a charge to the account. Turns out I forgot about a magazine subscription that was due for renewal. I called the credit card company to ask why a charge was allowed on a canceled account. They said that legally they can still honor payments like this and charge me for them. What I want to know is if this is true. Yes, I should have remembered to cancel that magazine subscription but I don’t like the idea that when I say “close this account” they get to decide whether or not to actually do it.

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Author: Ira
SENIOR MEMBER (Member for 2 yrs.+)
Joined: 19 May 2003
Posts: 714
Location: NJ
Posted: Sat May 08, 2004 6:36 am

Always cancel cards by mail and not by phone. Whenever I cancel a card I always word it something like this: “Please cancel the above referenced account as of today, (date). Please be advised that charges to this account after today’s date are not authorized by me and will not be honored.”

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Author: NightStar
Forum Moderator
Joined: 07 Nov 2003
Posts: 2135
Location: Illinois
Posted: Sat May 08, 2004 8:09 am

One thing to remember when canceling credit cards - Never ever return the credit card, cut it up and dispose of it.

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Author: adamh
Guest
Posted: Sun May 09, 2004 6:09 am

I have a bill showing a 0 balance. It also has a statement that my request to close my account has been recieved and that once it reaches that 0 balance it will be closed. Is this enough to prove that this was an unauthorized transaction and get them to close the account again and return the balance to zero?

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Author: Polonius
Credit Expert (100+ Posts)
Joined: 19 Jan 2004
Posts: 340
Posted: Sun May 09, 2004 9:24 am

Adamh, the answer is no. It’s NOT an unauthorized transaction. You gave the magazine publisher permission to renew your subscription when it expired; you failed to cancel that authorization with the publisher. (Usually the publisher will mail you a letter a few months before that’s done, by the way. I just got one from Computer Shopper saying my sub will expire with the August issue and will be renewed automatically as I requested.) As far as the bank and the law are concerned, you authorized the transaction–and the bank really did you a favor in honoring it and leaving your account open. What if you had scheduled your rent payment and were faced with eviction or huge penalties because the charge wasn’t honored? What if you had scheduled your mortgage payment or another credit card payment and thus failed to pay on time when it wasn’t honored, resulting in late fees, penalties, a black mark on your credit record, and possibly higher interest on your debt? Look, this is not a big deal. Write to the magazine publisher and say you want a refund. It will credit your account. My policy in cancelling a card? I stop using it. I first check statements to see if there are recurring charges, like a monthly charge from my ISP. I cancel those automatic payments. If it’s a no-fee card, I then do nothing. You gain nothing at all by cancelling a no-fee card–you only reduce your available credit and credit score. If it’s a fee-based card, I check back to see when the annual fee kicks in, and I cancel the month before. Sometimes, like you, I see things like unremembered magazine subscriptions hitting the account. And sometimes I get hit with the annual fee because I wasn’t paying attention–in that case, I’ve found that I can call and cancel and get the fee refunded as long as it’s within a few weeks of receipt of the statement showing the fee hit.

Polonius
“Neither a borrower, nor a lender be; For loan oft loses both itself and friend”

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Author: mouse
Guest
Posted: Sun May 09, 2004 12:35 pm

NightStar wrote:
One thing to remember when canceling credit cards - Never ever return the credit card, cut it up and dispose of it.I do (have for more than 20 years) that way they know I’M NOT KIDDING I also make sure that know exactly why I’m doing it in the letter CERTIFIED R/R

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Credit Tips: How to Cancel Your Credit Card

Posted On:

Author: Audryssitter
Joined: 22 Jan 2004
Posts: 8
Location: Hazen,AR
Posted: Sat Jul 24, 2004 10:58 pm
Post subject: How to cancel a credit card

and other useful credit card info. It is on the upper left front page of msn.com tonight. You have to wait for the topic line to rotate back to the above story before clicking on it.

defendamerica.mil or uso.org

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Author: Board Monitor
BOARD MONITOR-ADMINISTRATOR
Joined: 05 May 2003
Posts: 430
Posted: Sun Jul 25, 2004 8:04 am

Thanks for you post. Below is a link to the article:

newsday.com/business/local/newyork/ny-bztipse3906016jul25,0,111720.story?coll=ny-nybusiness-headlines

Best Regards,
Curtis Arnold
Board Monitor
U.S. Citizens for Fair Credit Card Terms, Inc.
http://www.cardratings.com
501-663-0314 PH 501-301-8474 FX

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Author: Ira
SENIOR MEMBER (Member for 2 yrs.+)
Joined: 19 May 2003
Posts: 739
Location: NJ
Posted: Sun Jul 25, 2004 9:06 pm

Curtis, the article you reference certainly doesn’t say how to cancel a credit card. It advises against doing so, stating that closing an account can only hurt the consumer. I totally disagree. I’ll mention that during one four or five year stretch I opened and closed some 37 cards. What the author misses is a concept that financial planners use all the time; the rebalancing of your portfolio. There’s nothing wrong with rebalancing your credit card portfolio every so often by closing a few accounts while opening a few more. For the most part it keeps all your ratios about the same, but it allows you to trade up to better cards.

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Author: NightStar
Forum Moderator
Joined: 07 Nov 2003
Posts: 2203
Location: Illinois
Posted: Sun Jul 25, 2004 9:57 pm

Other way, is that if you do close accounts with no plans to open others, then besure to reduce your debt by the amount of credit which you are closing off…

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Author: Board Monitor
BOARD MONITOR-ADMINISTRATOR
Joined: 05 May 2003
Posts: 430
Posted: Mon Jul 26, 2004 8:45 am

Ira, Good point. However, if you carry any type of balance on your card(s), then closing out unused accounts can hurt your ratio. Also, closing out unused accounts that you’ve had for a while can negatively affect the length of your credit history.

Best Regards,
Curtis Arnold
Board Monitor
U.S. Citizens for Fair Credit Card Terms, Inc.
http://www.cardratings.com
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Author: Polonius
Credit Expert (100+ Posts)
Joined: 19 Jan 2004
Posts: 358
Posted: Mon Jul 26, 2004 6:21 pm

Closing accounts can only hurt your credit score, not help it, unless the accounts have very low credit limits and are thus affecting your average credit limit per card adversely. As Curtis says, closing an account can reduce the length of your active credit history–and never increase it. Closing an account can reduce your available credit and increase your utilization percentage–but can never improve either factor. Of course, credit scores aren’t the only things involved. I can see closing an account that has an annual fee. Or closing accounts because too many accounts can be hard to keep track of–some people aren’t good at handling dozens of cards. Or closing accounts to control the amount of debt you can run up, if you have litle self-control (or if your spouse doesn’t ). Or if your bank says you must close one account to get another with better terms. Ira, you’re right about credit balancing and I’m all for getting better cards to use with better terms. But there’s nothing that requires you to close the other cards when you do that, is there?

Polonius
“Neither a borrower, nor a lender be; For loan oft loses both itself and friend”

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Author: Ira
SENIOR MEMBER (Member for 2 yrs.+)
Joined: 19 May 2003
Posts: 739
Location: NJ
Posted: Mon Jul 26, 2004 10:33 pm

Polonius, when I first started learning about and applying for every low interest credit card I could find (and getting them!), I eventually started getting rejections because I had too much revolving credit available. I don’t remember the exact term. From then on I adopted a policy of open a card, close a card. I don’t think it ever hurt my score because I kept getting all the cards I wanted. Then again, I am the maverick around here because I am not a score watcher. I have no idea what my score is. All I know is I don’t have any trouble getting credit, and that’s what it’s all about, right?

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Author: Ira
SENIOR MEMBER (Member for 2 yrs.+)
Joined: 19 May 2003
Posts: 739
Location: NJ
Posted: Mon Jul 26, 2004 10:35 pm

Curtis, how can closing older accounts affect the length of one’s credit history? The closed accounts remain on the credit report and merely show as closed by consumer. You don’t change history by closing accounts.

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Author: Polonius

Credit Expert (100+ Posts)

Joined: 19 Jan 2004

Posts: 358
Posted: Mon Jul 26, 2004 11:01 pm

i don’t think inactive accounts are counted in the same way as active accounts in computing credit scores. And if you close an account, it will disappear from your reports after seven years. As older accounts are closed and drop off, your credit history looks shorter. An open account, used occasionally, will stay on forever and contribute to the score and the age of your credit history.

Polonius

“Neither a borrower, nor a lender be; For loan oft loses both itself and friend”

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Author: Board Monitor
BOARD MONITOR-ADMINISTRATOR
Joined: 05 May 2003
Posts: 430
Posted: Tue Jul 27, 2004 8:33 am

Ira, I have just heard this from various experts in the field. Don’t quite understand the mechanics, though. :0)

Best Regards,
Curtis Arnold
Board Monitor
U.S. Citizens for Fair Credit Card Terms, Inc.
http://www.cardratings.com
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Author: Ira
SENIOR MEMBER (Member for 2 yrs.+)
Joined: 19 May 2003
Posts: 739
Location: NJ
Posted: Tue Jul 27, 2004 10:23 pm

Polonius, I don’t think you can say that any oen factor is more - or less - important than any other. It’s almost like someone asking how’s your health. My answer is always, “compared to what?” I think this whole credit reporting and score thing is more an art than a science, and unfortunately the CRAs are the artists when they should be the scientists.

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Author: Polonius
Credit Expert (100+ Posts)
Joined: 19 Jan 2004
Posts: 358
Posted: Wed Jul 28, 2004 9:53 am

Ira, it would be so much easier in these discussions if we simply knew how various credit scores were calculated. Obviously some factors are more important than others in those calculations; we see vague generalizations here (”30% is utilization”) but not the nitty-gritty about the fine details for any particular score. We completely agree that such things as credit scores may or not be important depending on the person and his/her needs. You don’t care about them. But I’m looking to get a HELOC sometime in the next year–and I guarantee some kind of FICO score will be very important in determining the interest rate I’ll be charged on my home equity line of credit. So right now credit score calculations interest me a lot, pun intended.

Polonius
“Neither a borrower, nor a lender be; For loan oft loses both itself and friend”

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