While credit cards come with an assortment of benefits, offers, and benefits, having multiple credit cards can certainly be overwhelming. In such circumstances, experts often advise to eliminate less frequently used cards by deactivating them.
Several factors such as unfamiliarity with usage, difficulty in expense management, relocation to another country, and various other reasons might prompt you to deactivate your credit card.
However, many individuals mistakenly assume that refraining from using a credit card will automatically result in the account being deactivated — this notion is an inaccurate one.
Even if you are not actively using your credit card, certain charges may still apply. Moreover, procrastinating on payments could potentially lower your credit score. To avoid all of this, you should consider deactivating such credit cards.
Let’s find out more about how to deactivate your credit card.
You might think about deactivating your credit card in the following circumstances -
If you decide to deactivate your credit card, keep in mind that this will lead to a reduction in your available credit limit. Consequently, your credit utilisation ratio will rise, indicating a potentially higher risk to lenders.
Note: Your credit utilisation ratio is calculated by dividing the sum of your credit card balances by the total of all your credit limits, yielding a percentage that represents your utilisation ratio.
This elevated ratio suggests that you are using a significant portion of your available credit, a scenario experts advise against. As a rule of thumb, the lower your credit utilisation rate, the more favourable it is. Experts generally recommend maintaining a credit utilisation rate below 30%.
Deactivating a credit card can also have adverse effects on your credit score, particularly by decreasing the average age of accounts on your credit report. The age of your credit accounts is a significant determinant of your credit score in the UAE.
The al etihad credit bureau (AECB) assigns higher credit scores to individuals with longer payment histories. If the closed credit card account has a history of missed payments, this negative information will persist on your credit report for a duration of 5 to 7 years.
With all that said, although your credit scores might experience an immediate drop upon closing a credit card, you can certainly take steps to enhance them within a few months by consistently paying your bills on time. Similarly, if you have deactivated an account but have not acquired new debt, your credit score will gradually rebound over time.
It is recommended by experts to refrain from deactivating a credit card if you intend to apply for other credit cards or loans in the upcoming months.
Let’s go through some ways in which you can deactivate your credit card -
To deactivate your credit card, you can get in touch with your bank's customer service representatives. Once you've made this request to the bank's customer support team, one of their agents will reach out to you to guide you through the subsequent steps. They will inquire about the reason for deactivating your credit card and gather a few related details.
You can readily locate the contact information for your bank's customer support personnel on the official website of the bank.
To deactivate your credit card, you can also initiate the process by sending a request for the same to your bank or credit card issuer via email. Simply furnish your credit card information and personal details in the email and clearly state your request for deactivation. After the information that you provide is verified, your request will be duly processed.
You can locate the appropriate email address for sending your request on the official website of your bank or credit card issuer.
Certain banks and credit card issuers provide the convenience of remotely deactivating your credit card through their official online platform.
Just follow these simple steps in this case -
Once you've submitted the form, a representative from the bank will get in touch with you to confirm your request, after which the deactivation process will start accordingly.
Here are some things and tasks you should complete when deactivating your credit card -
Other things to consider before deactivating your credit card -
Go through the following frequently asked questions section to know more about how to deactivate your credit card.
Ans: Yes, you can deactivate your unused credit card if you don’t need it.
Ans: No fees or charges are involved in deactivating your credit card.
Ans: You cannot request for credit card deactivation if you have an outstanding balance on your credit card. You would first need to clear all the dues before filing a request for the same.