There can be many reasons as to why you wish to close your credit card in Dubai, for example, if you are leaving the country, you have multiple credit cards, the bank has increased the interest rates or is charging more annual fees or maybe because you are not interested in keeping a credit card anymore. You might want to close your credit card due to such reasons even if you have the best credit card in UAE. Make sure that you have closed the card correctly before contacting your credit card provider in order to prevent any possible disappointments in the future. Follow these steps to close your credit card correctly-
Check if it will Affect your Credit Score
- The information about your credit card is present in your credit report. Closing the credit card will neither remove it from the credit report nor will it remove any payments history related to your credit card from that credit report. Hence the history of the negative payments (if any) will remain in your credit report for a specific period of time.
- However, you should also check how long have you been using that credit card as the duration of your payment history is necessary for keeping up a good credit score. If you maintain the credit cards you have held for approximately a year and close the one that you have been using for many years, then you can experience a drop in your credit score. The money lenders prefer the ones who are capable of maintaining a considerable relationship with the creditors.
- You might also want to leave your account working for some time if you have recently been making late payments on your card. In order to cover this and show a positive credit history, you should maintain a zero balance for some time.
- Before you contact your credit card provider for closing your credit card in UAE, check if closing that card will affect your credit score or not.
Pay Off the Balance on your Credit Card
- Closing the credit card even if the balance is not paid off is possible but it negatively affects your credit score as your credit utilization will rise. Credit utilization is amongst one of the biggest factors that affect your credit score. It takes into account the ratio of your credit limits to the balance on your credit cards.
- After closing your credit card without paying off the balance, you will still have to make payments every month (the minimum at least) until you clear the balance. It is always better to pay off the credit card balance before closing it as it will reduce the effect it has on your credit score.
- If you are unable to pay off your credit card balance but are eager to close your credit card account, then you can transfer the balance to another credit card account. A credit card that has no used credit or a credit card that has a promotional interest rate is a good option for balance transfer.
Secondary and Jointly Named Credit Cards
Before closing your credit card account, cancel the secondary credit cards issued (if any) by the credit card company. In case your credit card is issued in joint names, both the cardholders must be willing to close the account. Both the cardholders should also unanimously agree on how the outstanding debts on the card will be paid because both of them are equally liable for these debts.
Use the Rewards on your Credit Card
After closing the credit card, you will not be able to access any of the rewards you have earned on your credit card. Check the reward balance on your card to know the number of outstanding rewards before closing your card. Redeem these reward points as they add to your statement credit and hence reduce your outstanding balance.
Call the Customer Service of your Credit Card Company
Inform your credit card company that you wish to close your credit card account by calling on their customer care number. Take a note of the date and time at which you have made the request for closing the credit card.
Written Follow up
Send a follow-up letter to your credit card company in order to keep a record of the request of closing the credit card. Write your name, credit card number and address in that letter. Also, mention that you have already made a request for the closure of your account on call along with the date of the request. To keep the proof that the letter had been mailed and received by the company, you should send this letter using a certified mail and keep the copy of the mail receipt and the letter with yourself.
Sending this follow up letter is not compulsory, the credit card company will close your credit card account without it as well. It just provides you with a proof that you have made the request if in case it is ever questioned in the future.
Make Sure your Account has been Closed
After a while, thoroughly go through your credit report in order to make sure that you have reported that the credit card is closed. Again, not reporting it would not really affect your credit score but if you do report it then your credit report will show the accurate status of your account. In case your credit card account has not been reported as closed, contact your credit card company or a dispute can be filed with the credit bureau.
Over to You
If you have made your mind on closing your credit card account, then do it accurately so that you do not end up in a confusing situation in the future. Make sure you follow the above-mentioned steps to close your credit card in Dubai correctly.