How to Close an Unpaid Credit Card
You are entitled to close your credit card accounts whenever you wish, even if there is still an unpaid balance. You will still be required to make your regular payments by the due date each month, but the account will show up as closed by your request on your credit reports, and you will not be able to make any new purchases. The procedure for closing an unpaid credit account is simple, although it does require some follow-up.
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Instructions
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Call the customer service department of the credit card company, and work your way through the phone options until you reach someone with the authority to close your account. The number will be printed on the back of your card, and it should also be listed on your statement and on the bank's website.
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Ask the phone representative to close your credit card account. She may ask you why you are closing it and try to convince you to leave it open by offering a better interest rate or some other incentive, Lucy Lazarony of Bankrate.com states. Stay firm if you are intent on closing the account, and remember that you do not have to give a reason if you do not wish to do so.
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Request written confirmation of the account closure from the phone representative. Banks usually have a standard letter verifying your request. Ask the representative for an estimate of when it should arrive. Lazarony recommends keeping it in your financial files.
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Follow up with your own letter, Bankrate.com advises. It should list the details of the phone call, confirm that you wish the account to be closed and repeat your request for written confirmation from the bank. Keep a copy for your own records.
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Check your credit reports to ensure that the credit card account is showing up as closed and that its status indicates that it was closed at your request, Lazarony advises. Dispute the item with the credit bureaus if the account is still being reported as open or has the wrong closure status.
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Continue to make your payments on time. They will still be reported to the credit bureaus until the entire balance is paid in full. Delinquent payments on a closed account are just as harmful as those made on an open credit card.
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Tips & Warnings
You will need to destroy any credit cards linked to the closed account. Scratch up the magnetic strip to render it unreadable, then cut up the card into tiny pieces and dispose of them in several separate garbage bags. It's best to play it safe even though the account is closed, especially when you still have a balance. An identity thief could attempt to reopen the account if he gets the number and card.
Closing credit card accounts, whether they are paid or unpaid, can bring down your credit score because it shortens the overall length of your credit history. Clark Howard, host of a financial radio show, recommends getting around this by leaving the account open and only making a new purchase twice a year. This will keep it active, and a very small transaction will not raise the existing balance excessively.
