How to Cancel a Credit Card the Right Way

Keeping a credit card active, even if you're not using it, can impact your credit score. But if you want to avoid annual fees, switch to a better deal, get out of debt or your card's been lost or stolen, it's important to make sure you cancel your card properly. Otherwise, you might still be charged fees and penalties.

Follow these steps to close your credit card account and stop making more credit card debt.

1. Make sure it's paid off

Your credit card needs to be at zero balance ($0) before it can be cancelled. Make sure you pay what you owe or transfer the balance to another credit card – preferably one with a lower interest rate or 0% introductory period.

You should also check when annual fees are charged to your account and make sure you cancel your card before that date arrives.

2. Transfer direct debits

If you have any direct debit payments set up on your credit card, make sure these are redirected to another card or to your bank account before they're due, or you'll start missing payments and could face penalties.

3. Claim or transfer rewards

If you've collected any reward points on your card, these should be spent or transferred to another account before they expire along with your card.

4. Request cancellation

You can request to cancel your card over the phone or online (from 1 January 2019, all Australian credit card issuers have to offer an online option through their website or app). The phone number for cancellations should be listed on the back of the card, or you can find it on the company's website.

It might be possible to cancel your credit card in writing, depending on the provider. Make sure you include your name, credit card number and account number and explain your reason for closing the account.

5. Make sure it's cancelled

You should receive confirmation that your card has been cancelled and your account closed soon after making your request.

If you don't get confirmation by phone, email or post within 2 weeks, you should contact your provider. You can also try to log in to your account to see if it's still active or check for statements.

Sometimes, overpayments and adjustments can add money to a credit account balance after cancellation. If you see this on your final statement, contact your card company to request that the balance is transferred or paid to you, as they won't normally do this automatically.

6. Destroy the card

When you're 100% sure that your credit card has been cancelled, cut it into pieces and dispose of the pieces separately to prevent fraud.

Do you have credit card debt?

Stopping relying on your credit card can be the first step to getting out of debt, but if you need more help or advice, talk to a Debt Fix advisor today.

Call 1300 332 834 for a free debt assessment and consultation with our team to find out what your options are, with no obligation.