How to Cancel a Credit Card Because of High Interest Rates

Overview

If you carry a balance on your credit card, high interest rates can really add up. But fortunately the credit card business is extremely competitive, and many companies offer low rates on cards to attract new business. But before closing your account, it's important to make a plan for your credit card balance and shop for a new card with a lower interest rate. Plus, when transferring your balance, many lenders offer introductory rates as low as zero percent, which can save you a lot of money.

Step 1

Determine your plans for the credit card balance. If you don't carry a credit card balance, you don't need to worry about this step. But if you have a balance on your credit card, make plans to either pay off the balance before closing the card or transfer the balance to another credit card.

Step 2

If you plan on transferring the balance, shop for other credit cards. Bank of America is the largest creditor in the nation, offering more than 400 different cards. It offers balance transfers to accounts with as low as zero percent APR, and many of its cards have cash back rewards with no annual fees. You can also check Bank Rate (see Resources section below), which allows you to compare more than 100 different credit card companies around the nation. When considering switching to a new card, consider the rate, annual fee and rewards program offered.

Step 3

Request a balance transfer. Once you have found a new credit card, you can apply online. Once your application is approved, you can complete a balance transfer online or contact the credit card company's customer services department. Be prepared to provide your credit card number for the card you are closing, so your new creditor can send a check to pay off the balance.

Step 4

Call your credit card lender to close the account. Once you've either paid off the balance or transferred it to another card, contact your lender and request the account be closed. Ask the company to send you a closure letter for your financial records and print out your last statement showing a zero balance.

Step 5

Check your credit report to ensure the credit card company has closed your account. Annual Credit Report (see Resources) is a company that allows you to order a copy of your credit report every 12 months. A credit report can be ordered online by answering verification questions correctly.

How to Cancel a Credit Card Because of High Interest Rates by originalmortgagesource.com