One of my favorite ways to save/make money is by taking advantage of Reward Credit Cards sign up bonuses. One major downfall to doing this and why many people tell me they will not start doing this is because you inevitably have to cancel those cards as most have a yearly fee that is never worthwhile. While yes most of the time cancelling a credit card is a huge pain in the rear end the 100-500$’s you net by going through this process is always worthwhile. Here are my tips on getting a card cancelled quick and painlessly.
As this post focuses on cancelling cards after just using them to swindle the big bad CC companies out of their easily earned money please read XXX before proceeding as you may not meet the qualifications. Provided you have read said article and understand the pros and cons of taking part in this CC “churning” please continue
If you are one of those people who do not want to open multiple credit card accounts because you don’t want to deal with the hassle of canceling those cards take a look at the numbers. The 100-500$ you net from the sign up bonus for spending money you were going to spend anyway is ALWAYS worth the time it takes. Worst case scenario you spend 5 minutes filling out the application online, 5 minutes activating the card when it gets to you in the mail and 15-20 minutes on the dreaded phone call cancelling the card. I call this worst case because with most of my cards it takes 1-2 minutes to fill out the app as I have filled out a ton, 1 minute to activate because most big CC companies have made this process quick and painless, and 5 minutes canceling because I keep it short and sweet. SO worst case you spend 30 minutes extra time to get this card and cancel it but you just made 100-500$ for that time so you made at least 200$ an hour, look at you! You’re a CEO of your own credit card cancelling company.
Other people I talk to have a problem with this process because they fear it will have a negative effect on their credit score. While this is true I firmly believe the effect is negligible and nothing to worry about. I do not have a great deal of experience with this as of yet BUT I did cancel 3 CC’s last November and then proceeded to refinance my mortgage 6 months later with a 750 credit score. As I have just cancelled 3 more credit cards in the last week I will update this post in a few months with how my score has changed. So many people write about churning WAY more credit cards than I do (15+ in some cases) and they still report a good credit score I don’t see the score hit as an issue.
Making The Dreaded Phone Call
First of all please PLEASE PLEASE understand the person who answers the phone when you call in to cancel your CC is NOT your enemy (although my wife always treats them like they are). They are just people doing their job! Although you may think their job is just to annoy the hell out of you until you submit to keeping the card, that is not the case. As I have held 2 jobs in which my main responsibility has been to answer customer calls I have a soft spot for anyone working a phone bank.
OK. Now that we have established you and the person on the other end of the phone are not mortal enemies make sure you keep your answers to their questions short and to the point, open ended responses are no good. Also remember no matter how much they try and tell you their card is like holding a golden ticket everywhere you go nothing is worth the yearly fee you will incur by keeping any rewards card, just say NO (nicely).
When the customer service rep asks you why you’re cancelling your card, the truth is not the answer. Saying “um well I just wanted to open this account to get my 100-500$ out of you guys and now next month that yearly fee kicks in so I need to bail” won’t go over well. Although I don’t think they can do anything about it if you do say this I feel the process will be made more difficult for you. My canned answer I use every time is “we have too many credit cards, they are becoming hard to keep track of, we just wanted to get one out of the wallet and this is the one we chose.” In most cases they are understanding to this reasoning and will give you little push back.
Once they have gone through all of their little spiel they are required to read to you, again as part of their JOB. There will inevitably be a statement they need to read to you per the government or some other big brother type establishment informing you that canceling this card is permanent and they will report its cancellation to the credit bureau. Once that is done they will confirm with you once more that you want to cancel and voila – you are done! See it was not really THAT bad.