Closing Credit Card Tips
If you have multiple bank credit cards, it can be difficult to manage them. Remember bill date, pay the bill on time, redeem point etc. Sometimes we close one or two credit cards to get out of this mess. If you are also worried about many credits and want to close it, then it is very important for you to keep these five things in mind.
Before Closing Credit Card , Check these points
Pay the outstanding bill
Before closing a credit card, it is extremely important to clear all outstanding bills as these attract interest. You have to pay fine, if you are late in paying dues. Therefore, before closing the credit card, make sure to pay all its outstanding bills.
If you want to take a loan, then avoid closing it
Financial experts say that if you want to apply for a big loan, then do not close the credit card. Closing a credit card can directly degrade your credit score. If the score is low, you may have to pay interest at higher rates on the loan.
Close the new card, keep the old one
Before closing credit card, the usage time of card must be considered. This is due to the reason that it has a major impact on credit score. The older the credit card, the higher its contribution to the credit score. So always try to close new credit cards.
Stop AutoPay Payment First
Before applying for the closure of the credit card, stop all auto payment payments associated with it. Many times it happens that the credit card holder may have a subscription to Netflix or other such platforms, or they may also be paying EMI and other bills with the card. These payments do not stop automatically once you initiate the credit card closure process. This can damage the credit score.
East redeem the points on the card
Credit card offers are its reward points which can be redeemed through cashback, discounts, coupons etc. Many people do not track their loyality or reward points. That’s why you should use them before closing your credit card.
By:-
Prakhar Sharma
Founder, Upgrading India
