How to Dispose of a Credit Card?

Credit cards happen to be the easiest form of cash-less transaction prevailing all over the world. On expiry, all credit cards should be destroyed to shield you against their fraudulent misuse. 

There are several do’s and don’ts tagged on to the credit cards when their dates expire. These factors are also attached to the regular use of credit cards and steps that must be taken when the credit card’s official date of concurrence expires. 

If it is a plastic credit card, it is very easy to destroy it. You can cut it into pieces by using a scissor or a sharp knife. You can also burn it. However, destroying a metallic credit card may prove to be difficult as you can neither cut it into pieces with a scissor nor burn it easily. 

Hence, the safest bet regarding metallic credit cards is to deposit with the issuing bank or credit card issuing agency. You can also send it through post or courier to the issuing agency, which will destroy it on its own using the latest technology. 

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Things to Consider before you close credit card accounts: 

A credit card holder must follow certain guidelines regarding this plastic or metallic money when it expires or gets closed at your instruction. 

Following are the main tips for it that you should follow for your own benefit:

1. Pay Off Your Balance in Full

It is always advisable to clear the outstanding dues over a credit card before closing it. The reason why you must clear the dues emanates from the reason that if your account is not clear with no payment liability, you have to pay interest on the credit card. This may be unduly harassing for you from the future payment liability issue. 

2. Ensure that there are no standing instructions on the card

It is obligatory that you meet all written or statutory standing instructions on the credit card. If all these instructions are not followed, actions against you may be taken by the credit card issuing authority. 

3. Credit card age matters

A credit card is issued with a specific date of its concurrence mentioned in it. It means every card has an expiry date embossed on it. This is the age of the credit card. 

The reason is that if you had been using it for a long period, you may be given certain benefits which may not be extended to other people using it for a short range of period. Older your credit card grows, your creditworthiness also grows. 

4. Redeem all benefits before closing your card

The benefits linked to a particular credit card will end as soon as it expires. After this, you cannot reap the benefits. Hence, it is always advisable that a credit cardholder redeems all benefits accruable to it before the expiry date.

5. Avoid closing if planning for a big loan

One may need a large amount as a loan. Here, the credit card can play an important role. In fact, it can smoothen the way to getting that big loan. Hence, it becomes self-explanatory that you must not close the credit card if you have any plan in the immediate future to go for a loan of a large quantum. Closing the credit card means losing the opportunity of availing a big loan from it. 

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How to destroy a plastic credit card?

A cardholder should destroy it completely to ensure no fraudulent use is being made by someone in the future. Hence, you should not just throw it in the bin. 

A cautious user would always demagnetize the credit card. This is a good way to invalidate it. A credit card with a magnetic strip can be demagnetized in a scientific way by using a powerful magnet. That magnet can neutralize the existing magnetic effect. 

Alternatively, you can cut the card into pieces with a scissor. In both cases, you have played safe as nobody else can commit fraud using your card. 

How to dispose of a metal credit card?

The metallic credit cards are hard to be disposed of. Being made of metal, they cannot be torn into pieces using a common scissor as one may do with the plastic cards. Of course, you may throw metal cards in the fire but the best way to do so is to write a letter to the card-issuing authority to cancel it. Attach your card with the letter and courier or post it to the bank or issuing authority. They will cancel your credit card number and destroy the physical card received by them in their own scientific way.  

[Read more: How to Cash a Damaged, Ripped, or Torn Check?]

Review your closed account statement

This is very important for all credit cardholders. It is the monthly or quarterly account statement that tells you about the money you have utilized earlier, the balance that you may utilize further if you wish to continue with the existing card and outstanding interest payment, and other liabilities.  

Hence, a review of the card even after you have closed the account is vitally important. Even after closing or misusing the card may make you liable to clear the outstanding amount lying against you. The issuing authority will insist on getting this money back no matter whether you have closed your account or not. 

In Conclusion

The above tells us all about closed credit cards. If one follows them, no problem will arise. However, ignoring them may put the card user in trouble even after its closure. 

In fact, a credit card is an important instrument for a transaction or meeting payment liabilities without using cash. But all the norms of the credit card must be followed for its smooth operation. You should also close your credit card accounts following all necessary rules. 

The reason is that even after closing the account, the bank or card issuing authority will chase you if the debit-credit head against the person doesn’t reconcile. 

The bank or card issuing agency would always try to recover the dues. Legal actions against the defaulter may be initiated if the outstanding dues are not cleared even after the card has been closed.