Credit Cards How To Use Credit Cards Wisely

4 Times When You Should Cancel Your Credit Card

Written by Jason Steele

Do you know when you should cancel a credit card? There are many reasons why you might want to do so, but choosing the right reason, and the right time, can be hard.

So here are four times you might want to cancel your card:

1. When the Annual Fee Is Due

The best reward credit cards will have a substantial annual fee. Sometimes paying this annual fee is worth it to enjoy the best benefits and the most valuable rewards, but sometimes you have to realize that you aren’t getting your money’s worth. When the annual fee comes due, then it’s time to reassess the value of the card and cancel it if necessary. But before you do, be sure to ask them to waive the annual fee, as some card issuers would prefer to do that to retain a customer.

2. When the Customer Service Isn’t Satisfying You

If you don’t like how you are treated by your electric company, then there’s not much you can do about it. But if you’re dissatisfied with your credit card issuer, then you have many alternatives. We are lucky to enjoy an extremely competitive credit card industry, and there are dozens of banks and credit unions to choose from. For example, American Express and Discover both tied for JD Power’s highest rank in customer satisfaction for 2014.

3. When the Terms of the Credit Card Changed for the Worse

In general, credit card issuers are constantly competing to offer the most favorable credit card terms, but on occasion they will downgrade the value of their cards. Often, this occurs when one of their partners changes their loyalty program for the worse. For example, the Club Carlson Visa from US Bank used to offer cardholders their last night free on award stays, but dropped that option in June of 2015. Considering this card has an annual fee of $75, cardholders may choose to cancel their account and ask for a pro rata refund of the annual fee.

4. You Have Too Many Credit Cards

Each credit card you have means that you get another statement, have to pay another bill. And if it is from a different issuer, you also have to use a separate login and learn how to use their web site. Therefore, some people eventually conclude that they have too many cards, and they need to simplify their finances. In other cases, cardholders find that having a large line of credit tempts them to spend more money and incur debt. If you realize that you have too many credit cards, you can start by closing the ones with the highest annual fees, the ones you use the least, or the ones with the least favorable terms and conditions.

About the author

Jason Steele

Jason Steele is a freelance journalist specializing in credit cards and personal finance. His work has appeared in many of the top personal finance sites as well as mainstream outlets such as MSN Money, Yahoo Finance, and Business Insider.

1 Comment

  • I closed a target store card once and the reason I gave was that I had suddenly become unemployed had no way to pay back any debt accrued on the card should I make future purchases. They accepted that reason and my credit score was not dented. Today, I would like to have a couple of cards but each time I apply I take a hard hit and it lowers my score. I do have a lien and can’t pay it yet. That shall happen soon.

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