If you're on a Galaxy Fold, consider unfolding your phone or viewing it in full screen to best optimize your experience.
by Lyle Daly | Updated July 21, 2021 - First published on Jan. 6, 2020
Many or all of the products here are from our partners that pay us a commission. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
You may be canceling your card, but you can still get some value out of it.
Although you shouldn't make a habit of opening and closing credit cards, there are times when it doesn't make sense to keep one of them. If you never use a card or it has an annual fee you don't want to pay, then canceling it could be the right decision.
Once you cancel a card, it's gone, which means you can no longer use its rewards or benefits. That's why if you're sure you want to cancel, you should do each of the following first.
Tips and tricks from the experts delivered straight to your inbox that could help you save thousands of dollars. Sign up now for free access to our Personal Finance Boot Camp.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.
Credit card rewards typically expire as soon as the card is canceled, so you don't want to leave yours unused. With cash back cards, this is simple, as you can get your cash back through any of the redemption methods your card offers.
It can be more complicated with travel rewards cards, which often have a variety of redemption options. Here are a few potential ways to use travel rewards before canceling a card:
If your card is part of an airline or hotel loyalty program, you typically won't need to worry about redeeming rewards before canceling it. Any points that are already in your account will remain there, and closing your card doesn't close your account in the loyalty program. You should, however, check the program's expiration policy so you know how long your points will last.
Another thing to keep in mind is that both cash-back and travel cards often have redemption minimums. A redemption minimum may mean you can't get your rewards balance all the way down to zero, but you can at least redeem as many points as possible.
If your credit card has any perks that could be valuable, then you should make sure to use them before you cancel.
The most obvious example is spending credits. For example, if a card has a $300 annual credit on your travel spending, there's no good reason to cancel the card before you've exhausted the entire $300. You don't want to leave money on the table.
I recommend reviewing the card's full list of benefits to see if there's anything you can make use of before you cancel it. If you have a flight coming up and your credit card offers airport lounge access, you should probably hang on to it until after the trip. If your card offers a free night in a hotel, see if you can redeem it.
Both of the steps above take time, which is why canceling a credit card should never be something you rush through at the last minute. If the card has an annual fee you want to avoid, get started on redeeming rewards and reviewing its benefits at least one to two months before you need to pay the fee. If you give yourself enough time, you're more likely to maximize the card's value before you let it go.
If you have credit card debt, transferring it to this top balance transfer card secures you a 0% intro APR into 2023! Plus, you’ll pay no annual fee. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt. Read The Ascent's full review for free and apply in just 2 minutes.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2022 The Ascent. All rights reserved.