You may wish to cancel your credit card if you no longer use it, perhaps because you are using one with more favourable rates and rewards, or you simply want to remove the temptation of having instant credit at your fingertips.
In some cases you might have lost your card – or had it stolen or compromised - and you’re worried about it falling into the wrong hands. It is important to cancel your card as soon as possible when this happens to avoid fraud.
As soon as you realise that your credit card has been lost or stolen you must call your credit card provider. The sooner you call the better to reduce your chances of being liable for any losses. Credit card companies have 24-hour helplines for emergencies like this and will place an instant block on your card.
As long as you haven't been negligent, you’re only liable for the first £50 of unauthorised withdrawals or transactions on your credit card after it’s been stolen. An example of being negligent would be to write down your PIN (personal identification number) and store it in your wallet along with your card.
Our guide to credit card protection explains how you protect yourself from fraudsters and credit card scams.
There are a few simple steps to follow to cancel a credit card when you no longer want or need the credit account:
Pay off your balance. Any money you still owe on the card needs to be paid back, so clearing the balance is the first step
Claim any rewards. If you’ve built up loyalty points on the card now is the time to spend them. You may not be able to redeem points after the card is cancelled
Cancel regular payments. If you’ve set up recurring payments from your credit card, make sure you stop them
Contact your credit card provider. You should be able to find their phone number on the back of the card or online. Alternatively, you may be able to log in to your online account to cancel the card
Send a follow-up email. Once you’ve cancelled the card, send an email to the card provider confirming the account is closed. If there any mistakes with the cancellation you will have this email as evidence
Check your credit report. To confirm your card has been cancelled, check your credit report. Don’t do it straightaway though, it can take up to seven weeks to for changes to show up on your credit report
Cut up your credit card. Carefully disposing of your card reduces the risk of it falling into the wrong hands, and you’re less likely to become a victim of fraud or identity theft
There are pros and cons to cancelling a credit card you no longer use. Cancelling a card will remove the temptation to borrow - and it could reduce the risk of you falling victim to fraud. But on the other hand it could increase your credit utilisation ratio and this can have a negative impact on your credit score.
Credit utilisation is a financial term which refers to how much borrowing you have as a percentage of your total lines of credit – or your credit limit. For example, if you had two credit cards each with a £2,000 credit limit and you had a debit balance of £1,000 on one card, your credit utilisation would be 25%. But if you then cancelled the unused card, you would change your credit utilisation to 50% - and this could dent your credit rating. Generally lenders prefer you to have a lower credit utilisation ratio as it is a market of financial stability.
How long a credit card account will take to be cancelled will vary by provider. But you can put a block – or freeze – on any spending immediately by calling direct.
Any outstanding balance will need to be paid in full for the account to be closed. Even then, banks may keep online access open for a period to allow you to access your statements and download or print off any information for your personal records.
Once closed, it can take around seven weeks for the cancellation to show on your credit report.
Cancelling a credit card could have an impact on your credit score. There is a risk it could damage your credit rating in the short term, because depending on your other borrowing it could increase your credit utilisation ratio. Credit utilisation is the proportion of what you borrow against your overall credit limit.
Reducing your overall credit limit by cancelling a card pushes up your credit utilisation ratio even if you don’t actually borrow any more money.
Potential lenders tend to view a high credit utilisation as a negative – and a sign your finances are stretched, which can make them wary of lending.
In contrast, if you keep the credit card account open it gives you more capacity to borrow and the perception can be that you’re more financially responsible.
You can cancel a credit card before paying it off, but it’s not usually advisable and you will still need to pay back the money owed, and the card issuer can continue to charge you interest.
Even if you close the account so you cannot make any more purchases, the card agreement still applies, and you have a legal obligation to repay the debt. You’ll still receive monthly statements and need to pay any monthly and annual interest or missed payment fees that accrue.
An advantage of cancelling a credit card with an outstanding balance is if the card has an annual fee. This is more common with rewards cards, so make sure you have redeemed any rewards first.
If you’re struggling to clear the outstanding balance, it may be worth considering moving what you owe to a balance transfer card at a lower interest rate. These credit cards allow you to move your debt from an existing card to a low or zero rate for a fixed period - sometimes for up to two years or more. There is typically a one-off admin fee for moving the balance, but it buys you time to clear what you owe. Our guide to balance transfers explains more.
You can compare credit cards quickly and easily with us. We’ll ask you a few quick questions about yourself, your finances and what you’re looking for.
Our eligibility checker tool will show you cards from our leading panel of providers and you can see your chances of being accepted. And it’s a soft search so it won’t harm your credit rating.
MoneySuperMarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.