How To Close A Credit Card With A Balance?
You are not needed to pay off your credit card debt prior to cancelling your account. However, cancelling the account is typically not advantageous if you decide to keep using it because you’ll still be responsible for paying any outstanding balance and the card issuer might continue to tack on interest to your bill.
Close credit card with balance:
Pay off the balance:
The best way to close a credit card with a balance is to pay off the outstanding debt in full. This will ensure that you don’t incur any additional interest charges or late fees, and it will also prevent any negative impact on your credit score.
Transfer the balance:
If you’re unable to pay off the balance in full, you can consider transferring the balance to another credit card with a lower interest rate. This can help you save on interest charges and make it easier to pay off the balance.
Negotiate a settlement:
If you’re unable to pay off the balance in full or transfer it to another card, you can try to negotiate a settlement with the lender. This may involve paying a lump sum that is less than the full balance in exchange for the account being closed.
Keep the account open:
If you’re unable to pay off the balance, transfer it or negotiate a settlement, it’s best to keep the account open and make regular payments to pay off the balance. Closing the account while still having a balance can have a negative impact on your credit score.
Notify the issuer:
Once you have paid off the balance or have made arrangements to do so, you should notify the credit card issuer in writing that you wish to close the account. Make sure to keep a copy of the letter for your records.
Conclusion
It’s important to keep in mind that closing a credit card account can have an impact on your credit score, so it’s best to do so only after carefully considering the potential effects on your credit history.