How to cancel a credit card in just 5 steps

To cancel a credit card, pay off the balance, redeem any rewards, and contact the issuer to formally close the account. Follow these five steps to cancel a credit card the right way.

Canceling a credit card can feel like navigating a minefield, especially if you’re hoping your credit score will not drop after doing so.

If you are juggling multiple cards or working to boost your score, the stakes are real. This guide breaks down the process clearly and simply, making it easy to manage. Following these steps can help you avoid leaving boxes unchecked and minimize negative impacts to your long-term financial health.

Table of contents

• Step 1: Pay off the full balance
• Step 2: Use or transfer rewards
• Step 3: Cancel or update recurring payments
• Step 4: Contact the card issuer
• Step 5: Confirm cancellation and monitor credit
• When could it be advantageous to cancel a credit card?
• What to consider before cancelling a credit card
• Alternatives to cancelling a credit card
• Take control of credit the smarter way
• Frequently asked questions

Step 1: Pay off the full balance

Before canceling a credit card account, it’s important to pay off the remaining balance in full. Carrying a balance could lead to interest charges, late fees, or negative impacts on your credit report, even after initiating the cancellation.

Review recent statements to confirm the payoff amount, and check that there are no pending charges. Individuals who follow a structured payment schedule, such as a biweekly budget, may find it easier to plan ahead and manage final payments efficiently.

Step 2: Use or transfer remaining rewards

Before deciding how to cancel a credit card online, it’s a good idea to use up any points, miles, or cashback still tied to the account. Some card issuers may void unused rewards once your account is officially closed, which means you could lose those benefits for good.

If the card is part of a broader rewards program, there may be an option to transfer rewards to another eligible account before canceling. Many rewards credit cards outline these policies in their terms, so reviewing them in advance can help you avoid missing out.

Step 3: Cancel or update recurring payments

Before canceling a credit card, it’s important to review recent statements for any recurring charges tied to the account. Subscriptions for streaming services, apps, or memberships may continue to bill automatically, even after the card is closed. This could lead to missed payments or service interruptions.

To avoid complications, cancel these subscriptions or update the payment method with another active card. If you are looking to simplify payment management and build long-term credit health, exploring virtual credit cards is a smart next step.

Step 4: Contact the card issuer to confirm cancellation

Once the balance is paid and all rewards and subscriptions are taken care of, the next step is to contact the card issuer. Typically, you can find the customer service number on the back of the card or by logging into the online account to request closure.

No matter the method, it’s a good idea to ask for written confirmation, either by email or mail, that they've officially closed your account. This documentation can help you resolve any future questions about the account's status.

Step 5: Monitor credit for reporting errors

After canceling a credit card, it's important to review the next credit report to ensure your account is marked as “closed by consumer.” This status shows future lenders that the account was closed intentionally, not by the issuer.

You may notice that your credit score has decreased—especially if the canceled card was among the oldest accounts. Because of this, double-checking that your issuer has accurately reported the account closure can help reduce long-term impact to your credit history and score. PayPal offers tools to monitor financial transactions and simplify the process of staying on top of credit.

When could it be advantageous to cancel a credit card?

Understanding when canceling a credit card could be a good move, and when it might backfire, can help protect long-term credit health while supporting better financial decisions.

The table below explores when it might be beneficial to keep or cancel a credit card. Be sure to consider any other factors that may be unique to your financial situation before you decide to keep or cancel a credit card.

What to consider before cancelling a credit card

Deciding whether to cancel a credit card isn’t always straightforward. To help make the best choice, cardholders can consider some key advantages and disadvantages:

Potential benefits of canceling a credit card:

Typically, cancelling a credit card offers benefits like:

• Reduced expenses from annual fees or other card-associated charges;
• Limited temptation to spend using a credit card; and
• Simplified finances with fewer accounts to manage

Potential downsides of canceling a credit card:

However, cancelling a credit card may:

• Negatively impact your credit score, especially if it’s an older card;
• Reduce available credit, which can increase your credit utilization ratio; and
• Cause a loss of rewards or benefits tied to the card

Alternatives to cancelling a credit card

When you are uncertain about canceling a credit card, there are other ways to manage the account without closing it. These alternatives can help reduce fees or control spending while preserving credit history and maintaining any associated benefits.

• Request a downgrade: Switching to a card with a lower or no annual fee allows your account to remain open, helping preserve credit age and history.
• Reduce the credit limit: Lowering your card’s credit limit can provide better spending control without closing the account.
• Minimize the expenses: Using your card only for essential purchases or small recurring payments can prevent large balances while keeping the account active.
• Make a balance transfer: Transferring existing balances to your card with a lower interest rate may help reduce interest charges without needing to close the original account.

Take control of credit the smarter way

Understanding how to cancel a credit card account is important in managing personal finances and protecting your credit health. With careful planning and the right steps, closing a card doesn't need to cause unnecessary stress.

PayPal offers tools that help you take control of your finances by tracking payments, managing subscriptions, and even generating virtual credit card numbers to enhance convenience and security when making online payments.

To keep payments organized and maintain financial control, consider using PayPal’s credit services, which offer flexible ways to pay and stay on top of credit.¹