Closing Credit Card With Balances
Closing a credit card with balance has it’s negative and positive effects. A credit card can be closed when the balance is settled or paid which will be allowed by your card company. The positive side of closing a credit card include has to do with the opportunity to avoid the charge of higher interest rates.
There is usually a forty-five days notice given for your balance to be paid which is enough time for you to make every preparation as regards paying your balance.
There is usually a forty-five days notice given for your balance to be paid which is enough time for you to make every preparation as regards paying your balance.
A closed credit card can not be used to make purchases, for you to use your credit card that means it has to remain open and has a good credit report.
Closing Credit Card With Balances
The effects on the credit report
The negative effects of closing a credit card include the continuous reporting of your credit to credit bureaus even while it’s closed. Whether you are involved in any form of transactions or not in a month, the monthly update of payment will continue to be reported or updated.
Your credit ratings will be affected when you do
Normally, the amount of your credit card balance and the credit limit will be considered when calculating your credit score which is also called credit utilization. This credit utilization has an important role it plays in your credit score.
After a credit card close what next?
The moment a credit is closed, transactions or purchases of any sort wouldn’t be possible with the card anymore and as a result of that closure, previous benefits or rewards attained over the months or years would be lost.
Making payments of your credit card shouldn’t be neglected after a close as you’re still mandated to pay the minimum payments as at when due. Note that any form of lateness to payment will attract fines.
The monthly interest will still be charged even after a credit card close as well as the charges of interest on your balance until it’s paid. So when you close a credit card It doesn’t affect the interest charges you pay.
If you’re anticipating a loss of credit, it shouldn’t make you leave your credit card open. Your credit card should be left open if you find it difficult to maintain your credit card transaction activities
