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6 Tips For Cancelling A Bank Account

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6 Tips For Cancelling A Bank Account

Bank accounts don’t have to remain open forever. If you aren’t using the account, are no longer near any branches, or if you have found a credit card with a better interest rate, it might be a good idea to cancel your credit card.

The good news is that closing a bank account doesn’t affect your credit card, and if you leave the account in good standing, you can switch banks without worrying about it lowering your credit score. Here are a few tips for canceling a bank account.

Do: Close Unused Credit Card Accounts

If you have several unused credit card accounts that you aren’t monitoring regularly, it could leave you susceptible to identity theft or fraud. Keep the accounts you use limited to the ones you keep an eye on each month to avoid any problems.

Do: Open A New Account Before Closing The Old One

By doing it in this order, you will always have access to your money. As soon as you open the new one, make sure to transfer your money over to the new account. Be mindful of any pending charges on the account that you will still be responsible for. You don’t want to be charged overdraft fees.

Some banks also have a transfer limit, which will limit the amount you can withdraw and transfer at one time.

Do: Keep Records

Once you have received confirmation that your account has been closed, keep that letter in a secure place for several years. Make sure to keep an eye on your credit report for the next couple of years as well to make sure that no problems or charges occur from the closed account.

Do: Destroy Checks, Debit Or Credit Cards

To avoid using bad checks or old cards, it's better to destroy them as soon as you confirm the account is closed. Cut up the cards and rip up old checks immediately. That way, you can ensure someone doesn’t use them fraudulently and cost you hundreds or thousands of dollars.

Don’t: Close Your Oldest Credit Card

One of the things that credit reporting bureaus like Equifax (NYSE: EFX) consider is what is the oldest credit account you have open. If you're thinking of closing your oldest account, it's better not to do so. Instead, keep it up and use it infrequently, so the longevity of your credit history stays intact.

Don’t: Consolidate All Your Balances Onto One Card

You shouldn’t close too many accounts at once, and put all your balance on just one card. One of the things that credit reporting agencies review is what percentage your credit balance is compared to your available limits. By keeping your debt spread out, it might help keep your credit score intact.

Posted-In: Education Personal Finance General Best of Benzinga

 

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