If you find that you are accumulating a lot of debt, and you feel that you are becoming overwhelmed, you may want to pay off your debt as quickly as possible and cancel accounts to avoid the temptation of spending more money on credit.
You may then want to cancel your credit card so that you will not have to pay the monthly charges or have the temptation of a easy to use card.
How do you cancel your credit card?
First of all, you should pay off the money that you owe in full. Wait a few days for this to show up on your card record.
The next step is to contact the customer service provider (you can find the number on your card) and explain that you want to cancel your credit card and close your account.
You can do this by email as well (look on the website of your financial service provider for the contact details) but it is advisable to contact your financial service provider by phone so that you know that they have got your message.
Most financial service providers will try to convince you to keep your credit card and will explain the benefits and offer you other, better packages.
If you are not interested in what they say it is important to be firm and explain that you have no interest in keeping your credit card.
What are the advantages of having a credit card?
A credit card can be a valuable asset if you desperately need to buy something right now that you cannot afford to pay for in one go. If you pay it off before the financial service provider begins charging you interest, then you will have been forwarded the money without having been charged interest.
It is incredibly important to get a credit history in order to qualify for a home loan or vehicle financing one day. Having a credit card and using it carefully will help you to build up a good credit record.
What are the disadvantages of having a credit card?
The main disadvantage of a credit card is the ease with which the card holder can find themselves in serious debt. Many people are tempted by the idea of a lifestyle that they would not otherwise be able to afford and find themselves spending too much money on items that they don’t really need.
The high interest rate is another disadvantage. If you do not pay off what you owe within the no interest period you will be charged interest.
If you get cash off your credit card, you will be charged interest from the moment you draw the money.
How to avoid getting in over your head with debt
It is so easy, in today’s fast paced, consumer driven society, for individuals to accumulate too much debt with interest rates that spike or compound leaving them with a lot of debt that they cannot afford to pay off.
There are serious consequences for people who cannot keep to their loan or debt repayment agreements. Some of these consequences include the following:
- Sequestration of your possessions
- Repossession of your assets
- Becoming blacklisted
- Legal action and fines
- A bad credit record
Anyone one of the above negative consequences could affect your chances of getting credit in the future.
If you find that you cannot make your payments, you should immediately do the following:
- Find a reliable debt counsellor and discuss your situation
- Get a debt consolidation loan to achieve a lower interest rate
- Free up some of your income so that you can afford your debt repayments
- Put savings or other excess money into your debt