Your credit card offers more than just an easy way for you to shop online. It also provides you with the opportunity to establish and grow a healthy credit score. But for whatever reason, you may want to close your CIBC credit card, whether you’ve found another credit card with better rates and terms, you’re looking to cut down on debt, or your card was lost or stolen.
No matter what your particular reason may be, can you close your CIBC credit card online, or will you have to take another route to close the account?
Reasons To Close Your CIBC Credit Card Account
Why would anyone want to cancel a credit card after taking the time to get approved for one? Here are a few common reasons:
- The card was stolen or lost.
- You noticed fraudulent spending activity on the card.
- The card is no longer being used.
- You want to replace the card with one that offers a lower interest rate.
- You want to replace the card with one that offers rewards with purchases.
- You want to avoid too much credit card debt.
What To Do Before Cancelling Your CIBC Credit Card
If you’ve decided to cancel your credit card, there are a few things you should do first:
Pay Down The Outstanding Balance
If the card you intend to cancel is still carrying a balance, pay it down in full before you close the account. Your credit card issuer will require that you pay it down anyway, so you might as well take care of that task before you start the cancellation process. And if you don’t, your credit card issuer could increase the interest rate, which will leave you with a higher balance to pay off.
Learn how to pay down your credit card debt.
Use Any Unredeemed Points
If you still have a few rewards points left on your card to redeem, spend them all before you cancel the card. Otherwise, you’ll lose all those points that you’ve managed to collect thus far. If you don’t want to spend the points, consider transferring them over to another account, if possible.
Inform Other Authorized Card Users
If there are other people on your credit account — whether they’re family members or employees — make sure they’re aware of the fact that you are cancelling the credit card. Collect all authorized cards or tell the others to securely dispose of the cards after you give them the green light to do so.
Cancel Recurring Payments
If your credit card is being used to automatically pay for recurring bills, get in touch with the companies to inform them of the change in credit card information so you don’t risk any interruption in service.
Check Time-Sensitive Rewards
Many rewards cards allow you to use rewards whenever you like. But others may have rewards and benefits that are redeemable only at certain times. For example, you may be able to redeem one free night at a hotel on your birthday if you have a hotel-based credit card, or you may be eligible to collect a few extra thousand points to go towards a flight on the anniversary of your card membership. Consider capitalizing on these benefits before cancelling your card if you’re close to specific dates when these rewards are available.
Find out if your credit card rewards can be taxed.
Cancel Linked Debits
If you have any direct debits that are associated with your credit card account, cancel those too so there’s no risk of accidentally reactivating your credit card.
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READ ARTICLECan You Close Your CIBC Credit Card Online?
CIBC does not allow its credit cards to be cancelled online for security purposes. Instead, you will need to call CIBC to request cancellation at 1 (800) 465-4653.
When you call to have your credit card cancelled, be prepared for the customer support representative to try to convince you to remain a credit card customer. They will likely come up with attractive offers as a way to retain your business, if you plan to go elsewhere.
Prior to calling, consider what other options you may be open to. For instance, would you consider keeping your card active if you were offered lower interest rates or additional perks? Or would you be open to taking out another credit card with better rates, terms, and rewards programs compared to the one you are closing?
Decide why you are cancelling your credit card and consider what the representative may offer you.
What Doesn’t Cancel Your Credit Card?
If you don’t make an active effort to cancel your credit card, the account will remain open. The following will not cancel your account:
- Cutting up your card – While it’s highly recommended to cut up your credit card after it’s been successfully cancelled, doing so without calling, emailing, or faxing your cancellation request will not officially close it. You’ll still be responsible for the card, including ensuring that the annual fee is paid and that any fraudulent usage is dealt with.
- Not using the card – Just because the card is not being used does not mean the account is no longer active. Again, failure to request cancellation from CIBC will leave the account open, during which time you will still be obligated to pay the annual fee. So, be sure to take the required steps to cancel your credit card to make sure it’s actually closed.
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READ ARTICLEWhat You Should Do After Cancelling Your Credit Card?
Regardless of what your reason may be for wanting to close out your credit card account, there are a few important things you should do once it’s officially cancelled:
- Make note of the customer support representative you spoke with at CIBC, as well as the date and time of your conversation.
- Get confirmation of your credit card cancellation in writing.
- Cut your credit card up into pieces so there’s no chance of anyone putting it back together and using it without your authorization.
Find out if the police investigate credit card fraud.
How Will Cancelling Your Credit Card Affect Your Credit Score?
Can cancelling your credit card negatively impact your credit score? Yes, it can, for a few reasons. Your credit score is calculated based on a few important factors, and when you cancel a credit card, these factors can be impacted:
Payment History
One of the biggest contributing factors to your credit score is your payment history. Your track record of making timely payments goes a long way in building a healthy credit score. But if you cancel your credit card, you’ll have one less financial product to practice making on-time bill payments on, which won’t do your credit score any favours.
Credit History Length
The amount of time that you hold onto your credit accounts can affect your credit score. The average age of all your accounts will be calculated. Generally speaking, the older your credit history, the more positively it can impact your credit score. And if the credit card you cancel is an old account, you’ll be shortening your average credit account age, which could pull your score down.
Credit Mix
Having a mix of credit accounts is good for your credit score. Lenders like to see that you can handle a variety of debt types responsibly, such as car loans, mortgages, and credit card bills. If you take your credit card out of the mix, you’ll have a less diverse mix of accounts, which could hurt your credit score.
Credit Utilization
Another factor that impacts your credit score is your credit utilization ratio. It’s calculated by taking the total amount of credit you’ve used and dividing it by your total credit limits. Put another way, this ratio is a measure of your credit limits versus how much of that limit you have used. It’s generally recommended not to use any more than 30% of your available credit. Any more can have a negative effect on your credit score. So when you cancel a credit card, you’ll be reducing the amount of credit available to you which can increase your credit utilization ratio.
New credit
If you intend to replace the credit card you are cancelling with a new card, your credit score can slip temporarily. That’s because applying for new credit will require the credit card issuer to get a copy of your credit report, which is considered a “hard pull” which can pull down your credit score. And if you apply for several new accounts within a short period of time, all those hard pulls can have an even worse effect on your credit.
Having said all that, keeping your credit card and being unable to pay your balance down can be a bad thing for your credit score. In that case, you’d be better off cancelling it before your debt load gets any worse.
Final Thoughts
Whatever your reason may be to cancel your credit card, you won’t be able to cancel it online. Instead, you’ll have to make a phone call to have the card officially cancelled. Just be sure to get written confirmation of its cancellation. And if the reason you’re closing the account is to replace it with another credit card, be sure to choose a card that closely matches your needs and financial situation.
