a close-up of someone using scissors to cut up their credit card

Our Guide to Cancelling Credit Cards The Right Way

Things to consider when cancelling multiple credit cards to get a handle on your debt overload.

Credit cards can lull you into a false sense of financial security. At first, they can seem like a fantastic boon that allows you to make those purchases you’ve been holding out on. Then, the bills start to pile up.


Understanding How to Approach Credit Card Debt is Key

It doesn’t take long for credit card debt to become overwhelming in more ways than you initially imagined. That stack of credit card bills can quickly add up, landing you in thousands of dollars worth of debt. 


Fees and annual percentage rates will add more to the outstanding bill, and eventually bury you under a debt that you don’t feel confident you can get out of. It’s this feeling that leads many people to cancel credit cards as soon as they have the debt paid down. While this can be a good idea in certain situations, it merits careful consideration.


Consider Credit Counselling Before Making Any Decisions

Having credit cards isn’t necessarily a bad thing. When you live within your means and use them mainly for emergencies or annual trips, they can help build your credit up. It’s when you consistently use them to the maximum limits and only make minimum payments that they start to erode your credit score. Before you cancel every card as quickly as possible, consider credit counselling services.

Speaking to an expert can help you decide which cards to cancel and how to go about the process without damaging your credit. There are some pieces of advice that are universal, including:



  • Keep your oldest credit card! If you’ve had a line of credit for several years and maintained it in good standing, then you want to hang on to it. Older lines of credit show a good credit history, and this is important to your overall credit rating.
  • If you consolidate your debt, cancel credit cards that you have zeroed out. Debt consolidation is a good indicator that you are struggling and needed to improve your financial circumstances. Having those empty credit cards might prove too much of a temptation for some. This is especially true if you have struggled with your spending habits in the past.
  • Never cancel a credit card with a balance. This means any balance at all! You could still owe $.50 and this would make your credit card appear used to the maximum—thus, negatively impacting your score. If the balance is low enough, pay it off before cancelling the card. Always ask about any outstanding balances, even when your records show that balance at zero.
  • Cancel cards that have extremely high annual fees. When a credit card company is charging you more than 25% of your balance to keep the card active each year, then you are losing money. 
Any credit card that is causing you to lose money or go further into debt can probably be cancelled, depending on the current amount of credit contributing to your score. When in doubt, ask for help.



Debt Help in Eastern Ontario is Only a Phone Call Away!

The experts at D & A MacLeod can help you inventory and cancel credit cards that may be harming your financial health. Contact us today for debt help and schedule a consultation to get started on the road to financial recovery.

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