How to cancel a credit card?

You can typically close a credit card account through your online banking or by calling the card issuer. Most of the companies in Australia that offer credit cards allow cardholders to create online accounts to easily manage card-related services, including cancelling the card. By logging into your account, you can check if you have any outstanding credit card debt, but you’ll need to get a payout amount from your card issuer before closing your account. 

A payout amount is any remaining balance on your card plus the interest charged. This number will change every day as interest is charged on any outstanding balance, so you may want to try to make the final payment as soon as you have the payout figure. You may be able to get this online, or you may have to call your card issuer to discuss closing the card with a representative. If you’ve signed up for a credit card from your bank, you can also cancel your credit card by visiting your local bank branch. 

Once your credit card is cancelled, you should get a confirmation from the company. The issuer may also charge you for cancelling the card in some circumstances, in which case you’ll have to pay that amount before the card cancellation is finalised. On the other hand, if you have paid more than necessary and are due to get a refund, you’ll need to provide your bank account details to organise the refund. 

If you have an outstanding balance on your credit card, the card issuer won’t allow you to cancel the card unless you pay off the amount due. Choosing to ignore the card debt is also not a wise option, as you’ll incur interest on the balance and risk bringing down your credit score. Consider checking if your credit card issuer offers a card repayment calculator. Using this can help you estimate the time it may take to repay the entire card debt, after which you can close your credit card account. However, if you’re facing financial difficulties and don’t have enough income to repay the card debt, you should speak to your card issuer as they may have options for you.

While paying off a credit card helps you eliminate debt, sometimes you may have to move the debt around. You could, for instance, check if you qualify for a balance transfer to another credit card. This could help you consolidate your debt onto one card, and the balance transfer may come with an interest-free period. Alternatively, if you’re paying off a mortgage on your home, check if you can refinance and consolidate your debt into that. If you have an offset account, check if you can draw from that account to pay off your credit card. An added advantage of transferring credit card debt to a mortgage, or even a personal loan, is that these loans often have lower interest rates than credit cards.