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    Default Closing a Credit Card Account

    (Considering the discussion on the "5 Ways to Kill Your Credit" thread, I thought this information might be useful to those people needing to close their credit cards or accounts.)

    Like most things in life, there's a right way and a wrong way to close a credit account. The right way will help make your life easier while the wrong way could cause a lot of headaches and actually damage your credit.

    Follow these simple steps to ensure that everything goes smoothly.

    1. Switch all your automatic monthly charges to a different credit card.
    2. Stop using the credit card.
    3. Pay the credit card off.
    4. Call the company to cancel it and request that they report it to credit reporting companies as "closed at the request of cardholder."
    5. Follow up your phone call with a letter confirming that you are closing your account, include the name of the person you spoke with over the phone and emphasize that it should be reported as "closed at the request of cardholder."
    6. Wait 30 days and then check your credit report, making sure that you see the reports from all three major reporting companies: Equifax, Transunion and Experian. Check to see if the account is correctly listed as closed at your request.
    7. If the account is listed and does not say "closed at request of cardholder," send a new letter with a copy of your old letter to the credit card company via certified mail and ask them to correct the mistake.
    8. Check your credit report again in 30 days and repeat as necessary.


    Here's what you don't want to do.

    * Forget to transfer all automatic payments to another card.
    * Forget to check your credit report and assume that everything went according to plan.
    * Close the account if it's going to hurt your credit. One of the things that goes into the calculation of your credit score is the ratio of the amount of credit you've used (the total of all your outstanding balances) to the total amount of credit available. If the first number stayed roughly the same but the second number became much smaller it could lower your overall credit score. That said, having too many credit cards, even if the balances are all zero, can weaken your credit. If you're going to pay off and get rid of one credit card, choose one that's close to being maxed out so that it won't hurt your overall number ratio.

    Source: Lawyer.com
    Last edited by d_awalker; 02-08-2009 at 04:35 PM. Reason: Forgot to insert source.
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