Redwood Credit Union

First, carefully evaluate which cards you want to cancel. Consider the following: £ Don't close all your cards. Closing multiple cards will weaken your credit score noticeably. Close only the cards you absolutely must. £ Don't close cards before a major loan closure. If you're about to buy a car or apply for a mortgage or home equity loan, you need your credit score to be at its best. If you can, delay closing any credit cards until after you have closed on the loan. £ Don't close cards with favorable terms. Close the cards that cost too much to keep, such as those that charge high interest rates. £ Don't close cards you've had for a long time. The length of your credit history is considered when calculating your credit score, so don't close any accounts with a long, favorable credit history unless it's costing money to keep them. £ Increase the limit on the cards you're keeping. If you're closing an account with a $1,500 limit, you can oˆset that and possibly maintain your credit utilization ratio by increasing the limit on one of your other cards by the same amount. Canceling a card involves more than cutting it into pieces. Follow these five steps to ensure you have closed that account. 1. Pay o• the balance. If you're carrying a balance, you may need a few "payoˆ" months. Once you have paid the balance on the card, wait one more month to make sure there are no lingering charges or residual interest to be paid. 2. Call the company. Look on the back of your card for the customer service number. Confirm that the balance on your card is $0. Tell them you want to close your account and you want your account to reflect that it was closed at the customer's request. Finally, ask for an address where you can send a follow-up letter. 3. Send a short cancellation letter. This is insurance in case the customer service representative makes a mistake. The letter should include your name, address, phone number, account number, and the date of your phone conversation. Again, state that you want the account to reflect that it was closed at the customer's request. 4. Wait a couple of months and then check your credit report to make sure the account was closed. If it hasn't been closed, repeat steps two and three. Steps to Canceling Your Credit Card

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