If you’re like most people, you probably have a few department store credit cards in your wallet. These cards can be tempting with their discounts and rewards, but they can also lead to overspending and high interest rates. If you’ve decided it’s time to cancel your department store credit cards, you may be wondering how to do it efficiently. In this article, we’ll discuss the steps you can take to cancel your department store credit cards without any hassle.
Why Cancel Department Store Credit Cards?
Before we dive into the steps for cancelling department store credit cards, let’s first discuss why you may want to cancel them in the first place.
High Interest Rates and Fees
Department store credit cards often come with high interest rates and fees. If you carry a balance on these cards, you could end up paying a significant amount in interest each month. Additionally, some department store credit cards charge annual fees, which can add up over time.
Temptation to Overspend
Department store credit cards can be tempting with their discounts and rewards. However, these discounts and rewards can also lead to overspending. If you find yourself constantly using your department store credit cards to take advantage of these offers, it may be time to cancel them and stick to using cash or a traditional credit card.
Impact on Credit Score
Having too many credit cards, especially those with high balances, can negatively impact your credit score. By cancelling your department store credit cards, you can reduce the number of open accounts and potentially improve your credit score.
Steps for Efficiently Cancelling Department Store Credit Cards
Now that we’ve discussed the reasons for cancelling department store credit cards, let’s dive into the steps you can take to do it efficiently.
Step 1: Review Your Credit Report
Before you cancel any credit cards, it’s important to review your credit report. This will give you an overview of all your open accounts and their balances. You can request a free credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) once a year.
Reviewing your credit report will also allow you to identify any fraudulent activity or errors that may be impacting your credit score. If you do find any errors, be sure to dispute them with the credit bureau.
Step 2: Pay Off Balances
If you have any balances on your department store credit cards, it’s important to pay them off before cancelling the cards. This will ensure that you don’t have any outstanding debt and will prevent any negative impact on your credit score.
If you’re unable to pay off the balances in full, try to pay as much as you can to reduce the amount of interest you’ll have to pay in the future.
Step 3: Contact the Credit Card Company
Once you’ve paid off your balances, it’s time to contact the credit card company to cancel your card. You can usually find the customer service number on the back of your credit card or on your monthly statement.
When you call, be sure to have your credit card number and personal information ready. You may also be asked to provide a reason for cancelling the card, so be prepared to explain why you’re choosing to cancel.
Step 4: Follow Up in Writing
After you’ve spoken with a representative from the credit card company, it’s a good idea to follow up in writing. This will serve as a record of your request to cancel the card and can be used as proof if any issues arise in the future.
In your letter, be sure to include your name, address, and credit card number. You should also state that you’re requesting to cancel the card and that you’ve already paid off any balances. You can also request a confirmation letter from the credit card company to ensure that the card has been cancelled.
Step 5: Monitor Your Credit Report
After you’ve cancelled your department store credit cards, it’s important to continue monitoring your credit report. This will allow you to ensure that the card has been cancelled and that there are no errors or fraudulent activity on your account.
If you do find any issues, be sure to dispute them with the credit bureau and follow up with the credit card company to resolve the issue.
Tips for Efficiently Cancelling Credit Cards
Here are a few additional tips to keep in mind when cancelling your department store credit cards:
Keep Your Oldest Credit Card
When cancelling credit cards, it’s important to keep your oldest one open. This is because the length of your credit history is a factor in determining your credit score. By keeping your oldest credit card open, you can maintain a longer credit history and potentially improve your credit score.
Consider the Impact on Your Credit Score
As mentioned earlier, cancelling credit cards can impact your credit score. Before cancelling any cards, be sure to consider the potential impact on your credit score and whether it’s worth it in the long run.
Don’t Cancel Multiple Cards at Once
If you have multiple department store credit cards, it may be tempting to cancel them all at once. However, this can have a negative impact on your credit score. Instead, consider cancelling one card at a time and waiting a few months before cancelling another.
Alternatives to Canceling Department Store Credit Cards
There are several alternatives that you can consider instead of immediately canceling your department store credit cards.
Freeze Your Credit Card Account
Instead of canceling your department store credit cards, you can choose to freeze the account temporarily. Freezing your credit card account will prevent any new charges from being made while still keeping the account open. This can be a good option if you want to take a break from using the card but don’t want to close the account completely.
Convert to a Store-Only Credit Card
Some department store credit cards offer the option to convert your card into a store-only credit card. This means that you can only use the card at that specific store, but it can still be beneficial if you frequently shop there. By converting to a store-only credit card, you can avoid the temptation to overspend at other stores while still enjoying the benefits and discounts offered by the department store.
Opt for a Credit Card Consolidation Loan
If you have multiple department store credit cards with high balances and interest rates, you may consider consolidating your debt with a credit card consolidation loan. This type of loan allows you to combine all your credit card balances into one loan with a lower interest rate. By doing so, you can simplify your payments and potentially save money on interest charges.
Remember, before making any decisions, it’s important to carefully evaluate your financial situation and consider the potential impact on your credit score. It may be helpful to consult with a financial advisor or credit counselor to determine the best course of action for your specific circumstances.
Conclusion
Cancelling department store credit cards can be a smart financial decision, but it’s important to do it efficiently. By following the steps outlined in this article, you can cancel your credit cards without any hassle and potentially improve your credit score in the process. Remember to review your credit report, pay off balances, and follow up in writing to ensure a smooth cancellation process.
