Cancelling a credit card can be a crucial decision, especially if you’re trying to simplify your finances or manage debt more efficiently. However, it is important to follow the right steps to avoid any negative impact on your credit score. Here are eight steps to cancel a credit card correctly.

1. Assess your situation: Before cancelling a credit card, take a moment to consider if this is the best decision for you. Will it affect your credit utilization ratio? Consider other options such as lowering your credit limit or switching to a card with no fee.

2. Redeem rewards: If you have any outstanding rewards, cash them in before cancelling your card, as they may be forfeited upon cancellation.

3. Pay off outstanding balance: Ensure that you’ve paid your balance in full before proceeding with the cancellation.

4. Call customer service: Get in touch with your credit card issuer’s customer service and inform them of your intention to cancel the card. Be prepared for them to attempt keeping you as a customer by offering various incentives.

5. Confirm account closure: After speaking with customer service, make sure you receive confirmation – either in writing or via email – that the account has been closed and the request successfully processed.

6. Follow up on auto-payments: Make sure that all recurring charges tied to the cancelled card are transferred to another payment method.

7. Monitor your credit report: Check your credit report within 30 days after cancelling the card to ensure that the account information has been updated as closed accurately.

8. Dispose of the old card securely: Once all is settled, cut up or shred the cancelled card to protect against potential identity theft.

By following these eight steps, you can ensure that cancelling your credit card is done properly and minimize any negative impacts on your financial well-being.