How to safely cancel a credit card

Learn how to safely cancel a credit card, avoid negative impacts on your credit score, and secure your financial health with our expert advice.

Written by Hayley Bevan and Victoria Smith

Published on February 17th, 2026

Last reviewed on February 17th, 2026

6 mins read

Understanding credit cards

There are several reasons why you might choose to cancel a credit card. It could be the case that a 0% promotional period has ended. Or it might be a balance transfer has been paid off or you no longer see the value in credit card rewards.

Whatever the reason might be, it’s important your credit card is cancelled safely to avoid any potential penalties. In this guide, you’ll learn how to safely cancel a credit card, avoid negative impacts on your credit score, and secure your financial health.

Does Cancelling a Credit Card Hurt Your Credit?

Cancelling a credit card can influence your credit score, but it’s not the only factor lenders consider when calculating your score. As well as reviewing your credit report, they’ll also factor in data from those who have been a previous customer.

It’s also worth noting a good credit score range will depend on your chosen credit reference agency. Where some agencies might lower your score for cancelling a card, others might be more lenient in their appraisal.

Before you cancel a credit card, it’s wise to consider a range of possible factors that could potentially harm your credit score and cause bad credit – both in the short term and long term.

Credit utilisation

By cancelling your credit card, you might increase your credit utilisation. For example, if you have a credit limit of £1,000 and a balance of £500, your credit utilisation is 50%. But if you cancel a credit card, your limit could be reduced which increases your utilisation.

Although a reduced credit utilisation might not be an initial concern to you, it can potentially signal to lenders you’re struggling with your finances and present a higher risk for lending. So, to protect your score (and potential for future lending), it’s best to maintain a utilisation of 30% or less.

Length of credit history

Credit card accounts sensibly managed over a significant period of time can have a positive influence on your credit score. As well as demonstrating a responsible approach to your finances, it can also help lenders determine the risk of borrowing to you.

By cancelling a credit card with a positive history, you’re limiting the window of assessment to potential lenders, which could result in unsuccessful applications for other types of credit, or the ability to secure preferential rates with a new lender.

Although cancelling a credit card can potentially harm your score, there are several instances where closing an account makes sense. It really depends on your financial situation and the best course of action to protect your credit health.

For example, you might have multiple credit cards and wish to consolidate your debt to a single lender using a balance transfer. Or, in other instances, you might be borrowing beyond your limits and want to restrict the amount of credit available to you.

Whatever the reason might be, it’s important to consider the long-term impact of cancelling a credit card to ensure it isn’t just a smart move for the short term, but for the overall future of your finances.

Should You Close Unused Credit Cards or Keep Them?

There’s no universal answer as to whether you should close an unused credit card. It all comes down to your spending habits, credit health, and whether cancelling a credit card will improve your finances in the long run.

Pros for keeping an unused credit card

Reduced credit utilisation ratio: Sensibly maintaining an active credit card account can lower your overall credit utilisation and demonstrate to future lenders you’re responsible with credit.

Maintained credit history: Long-standing credit card accounts with a history of being well-managed can improve your score and suggest to lenders you’re a lower risk for lending.

Protected credit score: Provided the account in question has a positive influence on your credit health, keeping it active could protect your score (even if it’s lightly used).

Cons for keeping an unused credit card

Higher risk of fraud: Even though most accounts come with security features to prevent credit card fraud, there’s still a risk you could be targeted.

Increased account management: Having multiple credit card accounts can make it more challenging to manage your finances and keep up with repayments.

Higher temptation to spend more: Unless your account is sensibly managed, having access to credit can result in spending beyond your means.

Risk of charges and fees: If you fail to make payments on time or carry a balance forward, you could be subject to interest as well as other credit card charges and fees.

To help you make the right decision, it’s worth assessing the pros and cons against your personal circumstances. You should also take the time to understand how a credit card works and whether it benefits your financial situation.

Step-by-Step Guide to Permanently Cancel Your Credit Card

Cancelling direct debits, popping your card in the drawer, or cutting it into several pieces doesn’t close your account. Here’s how to cancel your credit card safely (and avoid the risk of future fees).

1. Review your credit card terms

Check your credit card terms for any cancellation fees. By following the lender’s specified process, you’re more likely to limit or avoid any financial penalties.

2. Redeem your rewards

Depending on the type of credit card, you might have the option to redeem or transfer your existing rewards to a new credit card account. Check the terms.

3. Cancel recurring payments

The next step is to cancel or update any recurring outgoings attached to your credit card, such as utility bills or monthly payments for car insurance.

4. Pay off your outstanding balance

Once your recurring payments are sorted, clear your existing balance to avoid the prospect of paying fees, ongoing interest, or damaging your credit score.

5. Contact your credit card issuer

To complete the cancellation, call your credit card issuer to confirm the request in writing. That way, you’ll have a record of proof against any future liabilities.

6. Monitor your credit report

As well as checking for any sudden drops in your score or credit utilisation, you should also check the card issuer has correctly marked the account as ‘closed by you’ on your credit report.

7. Dispose of the card safely

Prior to disposing of your credit card, it should be cut or shred into pieces to make sure all data is unreadable. For added security, you should also dispose of the pieces separately.

If your credit card has been unused for a significant amount of time, your lender might advise you they’re closing the account (unless you state otherwise).

When it comes to closing your credit card account, it’s important to follow the right process. By simply cancelling your direct debits or disposing of your card, you could incur financial penalties.

If you’re unsure what’s best for your finances, you could seek professional advice. Or, if you want to transfer your existing credit card balance or build your credit score, you could consider an Aqua credit card.

As standard, you’ll get support from our Aqua Coach which gives you personalised tips, score tracking, and expert insights to help you stay on track with your finances. Take our free eligibility check that’s over in as little as 30 seconds.

Representative 39.9% APR (variable) on Aqua Classic

Failure to make payments on time or to stay within your credit limit means that you will pay additional charges and may make obtaining credit in the future more expensive and difficult.

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