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How to Cancel Credit Card Without Ruining Your Credit Score

Cancel Credit Card
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It’s no secret that cancelling a credit card can have a negative impact on your credit score, but is there a way to soften the blow? Are there any life hacks that credit card customers can use to cancel a credit card successfully while leaving their credit score relatively unscathed?

While signing up for a credit card or requesting a replacement card from your bank is super-easy here in Singapore, credit card companies don’t always make the cancellation process quite so straightforward. You might think that credit card cancellation is a bad idea, period – but that doesn’t always have to be the case. 

In this article, Loan Advisor will walk you through how to cancel a credit card quickly, easily and with a minimal negative impact on your credit score.

When Does it Make Sense to Cancel Your Credit Card?

Sometimes, cancelling a credit card is a bad idea. It can get you into a lot of trouble with both your credit score and your credit utilization rate if you’re not careful. 

But under other circumstances, kick-starting that account closure or card cancellation process just makes sense. Here are some scenarios where choosing to cancel a credit card is simply a no-brainer:

  • You Are Getting Divorced or Separated

If you and your partner have decided to go your separate ways, it’s important to close any joint credit card account you may have together. Failing to do so could see you fall liable for any past or future charges issued to your credit card account. What’s more, it’s not uncommon for a disgruntled ex to rack up big charges and mega credit card debt out of spite when a relationship goes off the rails.

  • Your Credit Card Issuer is Charging a High Annual Fee on a Card You Don’t Use

With millions more credit cards circulating in Singapore than there are credit card users, it goes without saying that some Singaporeans will have cards lying around that they simply don’t use. If this sounds like you, it’s important to determine whether any travel credits or perks are worth paying the annual fee for. Account closure is always wise if you’re coughing up money for a card that’s just sitting in your wallet collecting dust.

  • Too Much Temptation is Costing You a Lot of Money

Having other cards to hand when you’ve hit the credit limit on your primary credit card can tempt people into overspending and racking up huge amounts owed. If you struggle with temptation and want to curb your spending, it might be time to consider cancelling those “back-up” cards you’ve become overly reliant on – particularly if credit card debt is becoming a big issue for you.

7 Steps to Cancel Your Credit Card Account 

If you’ve decided that cancelling a credit card is the right course of action for you, it’s important to tread very carefully. You’ll want to follow the correct cancellation process offered by your bank, and closely assess your outstanding balance, payment history and amounts owed to make sure you’re all settled up before you cancel. 

Here’s Loan Advisor’s seven step process for cancelling a credit card successfully with minimal impact to your credit score:

Step 1: Understand the Impact on Your Credit Score and Credit History Beforehand

Credit scores are hugely important here in Singapore and you’ll need to think very carefully about how your actions will affect your credit history. Click here to read on how you can improve your credit score Singapore.

Generally speaking, when you cancel a credit card, that card’s payment information will remain on your credit report for quite some time. A closed account with an outstanding balance of zero will show up on your credit history for anywhere up to 10 years – so you’ll need to keep this in mind. By way of comparison, the likes of foreclosure and late payments will affect your overall credit score for 7 years. 

Credit bureaus like Experian are most interested in your so-called “balance to limit ratio” or “credit utilization rate” which basically just means the difference between the amount of credit you have used versus the amount of total credit you have available. As a general rule of thumb, you’ll want to keep your balance to limit ratio as low as possible at all times. 

If you are dead set on cancelling a credit card, you will never be able to avoid the negative impact this will have on your credit score entirely – but you can try to soften the blow by taking on more credit elsewhere to balance your credit history books. For example, you could request a credit limit boost on one of your other cards or take out a new credit card elsewhere.

Step 2: Redeem Any Remaining Rewards 

If the credit card you’re keen to cancel is a rewards card, there’s a good chance you’ll lose any rewards points you may have accrued the second your credit card account has been closed. Our next step involves minimizing your losses in this area by double checking your rewards points balance, as well as your card issuer’s redemption rules, to determine the best course of action before closing your card account. If you’re lucky, you might be able to recoup some of those benefits.

Step 3: Pay Any Remaining Credit Card Account Balances and Annual Fee Costs

Even if you’re cancelling right after paying a monthly statement, you should still request a full statement credit to determine your credit card balance – just in case any additional interest has racked up since the payment was made. Most banks in Singapore require you to pay off any outstanding money or amounts owed before you can cancel a credit card with them. It’s important to double check what is owed and pay it in full, rather than just assuming that the balance is automatically zero if you recently made a payment.

If you are worried about accruing any additional charges, contact a customer service officer to request that they “freeze” your card until you have cleared the outstanding balance and fully closed your account. You may be able to use a balance transfer card or other financial products to assist with the closure if you are struggling with credit card debt.

Step 4: Call Your Bank 

Next up, you’ll want to speak to a customer service officer from your bank to find out exactly what you need to do to officially cancel your credit card with them. They will most likely ask you for your credit card number and perform a few ID checks before you can kick-start the process.

You’ll need to repay any outstanding balance in full if you haven’t already and make sure any residual interest that may have not made it onto your last statement has been settled, too. You’ll also want to be firm with the customer service officer and make sure they are clear that you wish to pursue a card cancellation. Don’t forget that it is your consumer right to do this – and make sure the representative is aware you are closing the account “on your request”.

Step 5: Send a Certified Mail Letter to Your Card Issuer to Cancel the Account 

Just for peace of mind, we’d also recommend requesting a name and mailing address for your bank so that you can mail them a written notice formally requesting card cancellation. This written notice should include details of the customer service officer you spoke to previously and the date and time you initiated the account closure by phone. Make sure that your certified mail letter includes:

  • Your name
  • Your address
  • Your phone number 
  • Your account number 
  • A request that your credit report states that the account was “closed at the consumer’s request”

You should also include a check number referencing the final check you used to pay off your final balance – and request a return receipt, too. Feel free to make a carbon copy for your own personal records and make sure that your bank acknowledges the letter.

Step 6: Check Your Credit Score Report to Confirm the Cancellation 

Frustratingly, it can take anywhere up to one month (or maybe even longer) for a credit card cancellation request to formally go through and be considered final. But once you have received a final confirmation letter from the bank, it doesn’t end there. You should also use one of Singapore’s top three credit bureaus to request a copy of your credit report and ensure the matter is marked up as “closed” within it. We recommend using one of the following three credit bureaus:

  • Experian
  • Equifax
  • TransUnion

If your bank or credit report has not yet marked the case as closed, you will need to report this to a customer service offer or file a dispute with one of the credit bureaus mentioned above. Alternatively, you can approach the Consumer Financial Protection Bureau here for further advice.

Step 7: Destroy the Credit Card 

Last but not least, you’ll need to destroy your credit card for good. It’s important that you dispose of your former credit card properly – but not until you’re 100% satisfied that the case has been marked as “closed” on your credit reports. 

Don’t forget to destroy your card in such a way that protects you from potential identity fraud. We’d suggest cutting it up with a pair of scissors but being careful to ensure that the credit card number, CVV, expiration date and your signature are all rendered illegible before you dispose of it altogether.

The seven steps outlined above should help you to cancel your credit card successfully without having too much of an adverse impact on your credit reports. Don’t forget that if you’d like to rebuild your credit scores, this can always be achieved by using other credit cards, personal loans or financial products and making sure you keep up your repayments on time.

 

woman holding credit card

How to Cancel Common Credit Card Account Types in Singapore 

Now we’ve shared the general process for safely cancelling a credit card with you, let’s dive into how the rules might vary between different credit cards, banks and potential lenders. 

  • Cancelling a DBS Credit Card

DBS enables its customers to cancel their credit cards online here – which is great for anyone who doesn’t want to be left on hold for hours on end trying to reach a customer service officer. You can initiate the process by clicking on the “Cancel Now” option on your credit card account page, which will open up a live chat box to assist with cancellation. Alternatively, you can use your iBanking account or call the 24-hour DBS support team at 1800 111 1111. More information can be accessed here if you need it.

  • Cancelling an OCBC Credit Card

OCBC bank offers customers the option to submit a Credit Card Maintenance form to their support team either by post or in-store. This form can be downloaded here. Customers are also free to contact OCBC directly and speak to a customer service officer at 1800 363 3333 – which might be a better option than relying solely on a postal request. For full peace of mind, you could even submit your request both ways!

  • Cancelling a UOB Credit Card

At the time of writing, all UOB credit cards can only be cancelled over the phone – which means you’ll need to call their 24-hour hotline at 1800 222 2121 and speak with a customer service officer to get the ball rolling and complete the UOB cancellation process. 

  • Cancelling a Citibank Credit Card

If you want to cancel a Citibank Credit Card, you’ll need to call 6225 5225 and be prepared to enter in some basic account details when the automated voice that answers asks you to do so. Press “3” and enter your NRIC or FIN number to bring up your account. You may also need to complete a text message verification before Citi will put you in touch with a customer service officer who can handle your case.

  • Cancelling a Standard Chartered Credit Card

Standard Chartered’s online banking portal allows customers to submit their cancellation request online. Simply log in to your account, follow Help & Services > Card Management > Credit Card Cancellation and select a valid reason for choosing to cancel your card. Alternatively, Standard Chartered also runs a 24-hour telephone hotline at 6747 7000.

All the banks listed above also offer round-the-clock customer service telephone hotlines for customers who are living abroad – which means the cancellation process can be initiated quickly and easily by expats who are living overseas, too.

Frequently Asked Questions About Credit Card Cancellation

Below, Loan Advisor has compiled a short list of frequently asked questions (FAQs) about credit card cancellation in Singapore just in case you still have any queries about the general process.

1. Can I Cancel My Credit Card Immediately After Getting It?

Yes – customers in Singapore can usually cancel a credit card right away without too much of an impact on their credit reports. The process is usually fairly straightforward.

2. Do Banks Charge Fees to Cancel Credit Cards in Singapore?

This will depend on the rules set by your bank. If you have paid any annual fees recently, some card issuers may even refund this or ensure the customer receives compensation if they cancel their credit card within a set time limit – usually of either 30 or 60 days.

3. Will Cancelling My Credit Card Have a Negative Impact on My Credit Score?

Yes – unfortunately this issue is difficult to avoid, but by following our seven step guide, you can minimize the impact on your overall credit score significantly. It’s also possible to apply for a new credit card or take other steps to try and counteract any detrimental affect a credit card cancellation might have on your overall score.

4. Could My Credit Card’s Annual Fee Affect My Final Payment When Cancelling?

Yes – you will need to check when your credit card annual fee is usually charged and make sure that this doesn’t coincide with your cancellation request. Don’t forget that it can take anywhere up to a couple of months for a cancellation request to be processed in full. If you have paid very recently, you might be able to get compensation – but not always!

Final Thoughts – Cancel Credit Card Without Affecting Your Credit Score Too Much Now

If you want to cancel your credit card without causing major problems for your credit report, you’ll need to proceed with caution and follow the seven important steps we outlined above while liaising with your credit card company. Don’t forget that:

  • Different credit card companies have different procedures
  • Any remaining balance pay must be fully settled before you can cancel a credit card
  • You should back-up your cancellation request with a letter sent by certified mail
  • The card or account closure case must show up as “closed” on your credit report before you can discard your old card
  • The top three credit bureaus can help you if things go wrong

Here at Loan Advisor, we do our best to keep our readers up to date with the latest credit card developments, as well as any important news regarding other financial products such as personal loans and home loans. We also offer a super-simple loan comparison service, that enables you to retrieve up to three loan quotes from licensed moneylenders absolutely free.

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