Shopping online and booking travel over the internet would be next to impossible without a credit card handy. Plus, a credit card is a fantastic way to build and improve your credit score, which is a crucial component of your financial profile. BMO offers a handful of great credit card products that come with all sorts of perks, including no annual fees, low-interest rates, and cash back rewards.
But there may be times when you need to cancel your BMO credit card for any number of reasons. Maybe your card was lost or stolen, or perhaps you’re looking to slash your debt and cut back on overspending.
Whatever the reason may be for wanting to cancel your BMO credit card, can you close out the account online? Or will you have to take another route to cancel?
Why Cancel Your BMO Credit Card?
There are plenty of reasons why you may want to close out their BMO credit card account, including any one of the following:
- Your credit card was stolen
- You lost your credit card
- You noticed unauthorized spending activity on the card
- You’re no longer using the card
- You’re looking for a new credit card that offers a lower rate, lower fees, or rewards
- You want to cut down on credit card spending
- You want to reduce your overall debt
Steps To Take Before Cancelling Your BMO Credit Card
Prior to cancelling your BMO credit card, there are some things to do first:
Pay Off The Entire Balance
Don’t try to cancel your card without paying off the outstanding balance. For starters, BMO won’t allow that to happen. You’ll be obligated to pay what you owe before closing your account.
Redeem All Your Points
If the card you’re closing is one that pays out cash back rewards or points, make sure you redeem any that you’ve accumulated thus far before you close your account. If you don’t, you’ll lose them. You could also have your points transferred to another card if you intend to take out another card with BMO.
Notify Authorized Cardholders On The Account
If you have family members who have their own credit cards associated with the account you plan to close, make sure you let them know of your intentions. Once the account is closed, ask them to safely discard their cards or collect them and throw them away yourself.
Cancel Recurring Payments
If your credit card is on account with specific services that charge your card every month, make sure to update your credit card information with these companies to avoid having your service interrupted.
Cancel Debit Cards Linked To The Account
Any debit cards that are linked to your credit card account should also be cancelled to avoid having the account inadvertently reactivated.
Can You Cancel Your BMO Credit Card Online?
If you have online banking set up with BMO, you can start the credit card cancellation process online. But you won’t be able to close your account without actually speaking with a customer service representative.
Once you’re logged into your BMO account online, you can send BMO a secure message requesting the cancellation of your credit card. You’ll receive a message back and a phone call to move forward with closing your account.
The reason why you can’t complete your credit card cancellation online is mainly that BMO will want to take the opportunity to offer you other credit card options that may better suit your finances.
Also, cancelling over the phone may be a more secure way to close your account. BMO’s customer support will verify your identity to make sure you are the authorized card owner who has the permission to close the account.
You can also call BMO directly at 1-800-361-3361 to start the credit card cancellation process. Or, you can visit your local BMO branch and have a teller help you cancel your card.
Keep in mind that simply cutting up your card or not using it will not automatically deem your account cancelled. You’ll need to make an active effort to close the account rather than just assume it will expire after months of not using it.
Steps To Take After Cancelling Your BMO Credit Card
After closing your BMO credit card account, consider doing the following:
- Write down the day and time of your conversation with the BMO representative who handles your card cancellation. In case there’s an issue, you can refer back to that conversation, since calls are typically recorded for quality assurance purposes.
- Get written confirmation of the cancellation, whether via email or a mailed document.
- Cut your credit card up in pieces before tossing it in the trash.
Can Cancelling A Credit Card Negatively Affect Your Credit Score?
Yes, closing a credit card account can impact your credit score for several reasons:
Your Credit Utilization Ratio Will Increase
When you cancel a credit card, your credit utilization ratio will go up. This ratio represents the percentage of available credit that you use and is a factor that is considered in the calculation of your credit score.
Closing a credit account causes you to lose the available credit that the card gave you. Your credit utilization ratio should be no higher than 30% to keep your credit score up. That means you should not spend any more than 30% of your available credit. The lower, the better.
The Age Of Your Credit Accounts Will Be Reduced
Another factor that influences your credit score is the age of your credit. The longer your accounts have been open, the better for your credit score, as long as you have been using these accounts responsibly. If the credit card you are cancelling was opened years ago, you could reduce the average age of all your accounts, which is not a good thing for your credit health.
Your Credit Mix Will Be Reduced
Lenders like to see a mix of different types of accounts that are being paid on time, such as personal loans, car loans, mortgages, and credit cards. By taking your credit card out of the equation, you’ll be affecting your credit mix, which could put a dent in your credit score.
Keep in mind that although your credit score could take a hit by closing your BMO credit card, it should rebound in a few weeks as long as you continue to make timely payments on other debts.
When It May Be Better To Keep Your Credit Card
There are certainly many situations in which cancelling your credit card might be the best option for you. But there are also situations in which keeping your card might be the better choice, such as the following:
- Your credit card is very old and is in good standing.
- The only reason you’re considering closing your credit card account is that you’re simply not using it.
- You hardly have any other credit accounts open, which could minimize your credit file and make it more difficult to get approved for credit in the future.
- Your credit score is already low. In this case, you might want to hold off on closing your credit card account. Although the negative impact of cancelling a credit card is usually temporary, you might still want to keep it open if possible, at least until you’ve managed to improve your credit score.
Having said that, if your credit card is making it difficult for you to keep your debt load down, it may be worth cancelling.
Alternatives To Cancelling Your Credit Card
If the reason why you are cancelling your BMO credit card is because of high rates and fees, consider negotiating with your credit card issuer. You may be successful at getting a better rate, especially if you’ve been responsible with your payments.
If your credit card doesn’t come with the opportunity to collect points that can be redeemed for future purchases, find out if you can switch to a BMO card that does.
If you don’t use your credit card anymore, just set it aside and keep it active by using it to make one small purchase per year. Keeping the card — especially if it’s aged — could be a good thing for your credit score.
No matter what your reason is for cancelling your BMO credit card, you’ll likely have to close the account by speaking with a customer service representative. But before you cancel, consider the alternatives to closing your account if your credit score will suffer. And if you decide to go ahead with the cancellation, make sure you take the right steps to cancel it securely and officially.