Cancelling old credit cards

Find out what the advantages and disadvantages are of cancelling your old credit cards and how it could affect your credit rating.

Key points

  • Cutting up old credit cards WON'T close your account
  • Keeping old credit cards can create opportunities for fraud
  • Having too much unused credit on old cards could make it harder to get a new card
  • Closing down old cards and applying for new ones could mean you could take advantage of introductory offers and deals

If you're the type of person whose wallet or purse is overflowing with cards, it may be time to take stock of the accounts you have open and whether they're actually doing anything for you.

So when it comes to credit cards, should you cancel the ones you don't use or just leave them in the back of a drawer, just in case?

Advantages of cancelling credit cards

Depending on your circumstances, closing your old, unused credit card account may be the right option, with some potential benefits.

Help reduce the risk of fraud

Inactive credit cards are easy targets for identity thieves, who can rack up large amounts of debt in your name.

If you haven't used your credit card for a long period of time, make sure you still check your statements regularly for unusual activity.

If you spot any payments that you didn't make, you'll need to contact your bank straight away and cancel the card.

You may be required to report it to the police, so keep any details that you think might be useful, such as the date of the transaction and when you contacted the bank.

Available creditHow to make your credit card work harder for you

Most lenders' credit scoring will take into account your earnings and how much debt you have already.

Even if you don't use your credit card, the lender might be wary that you've already got a lot of credit available to you and reluctant to lend you any more, regardless of whether they're offering a better deal.

Becoming a new customer again

Banks and building societies tend to keep their great offers to tempt in new customers, whereas if you're an existing customer you'll likely be lumbered with a less-than-thrilling deal.

The good news is that you can technically reintroduce yourself to the bank.

Most lenders will welcome you back as a new customer after a specific period of time, even if you've held a credit card with them before.

This period will differ between lenders and could range from 30 days after your last statement to a year or more, after which you'll be able to enjoy the introductory credit card offers all over again.

Prevents overspending

For those who can't help but reach for the plastic, cancelling your card can be a good way of helping to prevent you spending on credit.

Disadvantages of cancelling credit cards

Due to the above reasons, it's a bad idea to leave lost, unused and unneeded credit cards open simply because you can't be bothered to close the account(s). However, there may be some very good reasons to keep hold of your old credit cards.

Protection on purchases

A card with a good history may be worth keeping open, especially if it's your only credit source. This will help show lenders that you're a responsible borrower

Purchases you make on your credit card between £100 and £30,000 are protected under the Consumer Credit Act, which means that if they're faulty or not fulfilled then the credit company and retailer take joint responsibility.

If the retailer doesn't pay you back the money, then your credit card provider should give you a full refund.

Because of this, it's always useful to have a credit card available - but consider whether you could get a good deal by comparing and taking out a new card instead to take advantage of interest-free periods and rewards bonuses.


Although tantalising offers are usually only given to fresh custom, you may want to enquire whether your loyalty could be rewarded with a favourable interest rate. There's never any harm in asking.

Stable credit history

Some lenders value long financial relationships, so keeping the same credit card and using it for a number of years can actually help make you a more attractive prospect to potential lenders.

How to cancel credit cards

Don't make the mistake of thinking that if you cut up your card that your account is cancelled.

The only way you can do it is by contacting the credit card provider and requesting it be cancelled. You may want them to confirm this in writing for your records, too.

Even if you've requested a cancellation, you should still check your final statement to make sure that you have no outstanding debt.

You're able to close your account to new charges, but you'll still need to continue to pay off any debt you have.

Bear in mind that if you have any refunds outstanding, they'll still be refunded to the credit card account but you'll probably need to contact the card provider to be sent a cheque or have the money transferred to your current account.

If you're contemplating whether to cancel your credit card, it may be worth phoning up your card provider and mentioning that you're looking to close the account.

How to improve a credit score

This could be the jolt they need to try and keep your business with an appealing offer.

Cancelling cards and your credit rating

There's no hard and fast rule when it comes to how cancelling your credit cards will affect your credit rating.

Some lenders will score negatively if they see you have credit cards which are unused, however borrowers who are continuously close to their credit limit will set off warning signals with many lenders too.

If you already have a lot of unused credit available to you, lenders may not be keen to allow you to borrow more.

If you have a poor credit history, before cancelling a card consider that you may have trouble securing another.

Instead, you could consider making your payments on time to improve your credit history and then you can cancel the card on a good note.

Also, a card with a good history may be worth keeping open, especially if it's your only credit source.

This will help show lenders that you're a responsible borrower who is able to repay their debt in a timely manner.

However, if you have a number of unused credit cards, you may want to think about cancelling some and having just one that you use for everyday purchases.

By Abbie Laughton-Coles