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Closing your credit card accounts
Dear Dollar Diva,
I have credit cards that I no longer use, and they're eating my
credit ratio. How do I get rid of them and get the accounts off
my credit report?
The credit card companies have given me a hassle
when I've called with this question. I don't know what to do!
April
Dear April,
You have been given another reminder that credit card companies
are not your friends. They're bonnie good fellows while they're
reeling you in, but once you're hooked, you're on your own.
Owning a bunch of credit cards just isn't cool any
more. Smart folks are unloading their excess plastic, keeping only
one for convenience, and paying the balance in full each month.
But you can't just unload those excess cards: You have to know the
game, or you could hurt your credit rating.
Getting rid of credit cards
the smart way
Once your account has a zero balance, you're ready to start the
process. It's important to know that the credit card company reports
the account closing to the credit reporting agencies, not you, and
they have two ways of doing it:
1. "Closed at customer's
request" -- This tells the credit reporting agency that
you divorced the bank, the bank didn't divorce you; it's what you
want on your report
2. "Closed by creditor" --
This tells the credit reporting agency that bank doesn't want your
business any more; it's what you don't want on your report.
Closing a credit card account the smart way takes
time, patience and organization. It is crucial to log every call
you make. You want a record of exactly who said what and when, so
you'll have the facts at your fingertips should there be a problem
down the line.
- Get a notebook and dedicate a separate page or
two for each bank account. On the top of the page write the name
of the bank, name on the account, account number and telephone
number. Then make columns on each page with the headings "date,"
"time," "person talked to" and "comments."
- For each bank, look for the customer service number
on your monthly statement. If you can't find it there, get it
by calling the toll-free information number: (800) 555-1212. Each
time you find a number, write it in your notebook.
- Call each bank; verbally confirm your zero balance,
and verbally cancel your card. If you're a good customer, expect
the customer service representative to dissuade you from doing
so; you may be offered perks, such as a lower interest rate. Stand
firm. Tell the rep you will send a letter to confirm the cancellation
and ask for the name and address of the appropriate person to
send it to. Lots of luck on the name -- but at least get the address.
Record everything pertinent to the call in your log.
- Write your letter to the bank. Make sure you include
the account number and your name and address on the account. It
wouldn't hurt to attach a copy of the last statement showing the
zero balance, and the pertinent account information. Include in
the letter: (1) please cancel my account (2) please notify the
credit reporting agencies that the account was "closed at
the customer's request." Make a copy of the letters and attachments
for your files.
- Mail the letters by certified mail with return
receipt requested. When a return receipt comes in, staple it to
the appropriate letter in your file and post the date received
in your log.
- A month after your last return receipt comes in,
check your credit reports to make sure all accounts are reported
as "closed at the customer's request." You can order
copies of your
credit report from the three major credit reporting agencies
by mail, phone and online.
- If the credit report is correct, you're done. If
it's not, start all over again: Call the bank to report the mistake,
request that they fix it and follow up with a certified, return-receipt
letter.
- Keep going until the job gets done.
Why would anyone want more than one credit card when
dealing with these companies is such a hassle?
-- Posted: June 4, 2001
 DOROTHY
ROSEN has a master's degree in finance, with a specialization in
accounting, from the Kellogg Graduate School at Northwestern University
in Evanston, Ill. Rosen has more than 15 years of experience in
the financial arena, serving in Illinois and Florida as a certified
public accountant, financial consultant, expert witness and educator.
She is owner of Dorothy Rosen, CPA, a public accounting firm that
serves individuals and small businesses.
-- Posted: June 4, 2001 |
