7 Ways to Get Rid of a Credit Card
Credit cards always seem like so much fun when you get them, but they can turn into a real ball and chain around your life. 45 percent of Canadians run a monthly balance on their credit card, and for too many of them, the monthly payment date is a nightmare that just won’t go away.
It can take time to get rid of a credit card, but if you follow these simple steps, you will absolutely get yourself free again.
1. Bite the bullet
The hardest part of getting rid of a credit card is paying it off, and some days that just feels impossible. Quitting smoking can seem impossible too, but people do it every day. In fact, almost a million people a day quit smoking for good.
Call up the credit card company using the phone number on the back of your card, and ask them to freeze the account so you can’t use it. Now your problem can only get smaller. While you are doing that, ask them to set up a pre-authorized payment out every month. It will come out of your bank account automatically, just like a mortgage payment or a phone bill payment.
Set the automatic payment amount low enough so that you can afford to pay it without cutting into food or necessities, but high enough so you get rid of the card in a satisfying length of time. These decisions are voluntary, so you could always turn the card back on, or phone them up and change the payment schedule.
You will always have to make a minimum monthly payment of approximately 5% of the balance, but if you set your payment to about 10% of the balance, it will be gone in a year.
2. Transfer the balance
If you have a high interest (over 10%) card, it’s probably costing you a fortune. Luckily, some credit card companies offer low rates on balance transfers. If you can get a low interest card somewhere else, then it is a good idea to transfer your balance there from a high interest card.
Then you can close the high interest card, and set up an automatic payment schedule on the low interest card, and you’ll pay it off much faster without so much interest cutting into your monthly payments.
At a 10% monthly payment, switching your balance to a low interest card with a special rate can save you 1-2 months of payments.
Rolling a credit card into your mortgage is the fastest way of getting rid of a credit card; just don’t run the balance back up again!
3. Out of sight, out of mind
Accidently ‘misplacing’ your card is a good way to stop yourself from using it. Is that really “getting rid of a credit card?” Yes, really, because you are getting rid of the negative part of the card, the debt, and keeping the convenience for online purchases or unexpected purchases. If keeping the card and losing the debt is your plan, then you can wrap the card up in a lot of tape and paper and put it in a drawer, or mail it to your brother with instructions not to let you have it back until it is paid off. Getting the company to freeze the card is more sure-fire, but you can achieve the same result manually.
4. Close the account
If you do want to get rid of the card forever, you can call the company up and get them to close the account even before you have paid
it off. The only downside to this is that it may impact your credit rating slightly.
The best way to drive up your credit rating is to use an empty card that you pay off every month. If you make late payments, or run a monthly balance, it will drive your score down. Try to never use more than half the credit available on a card, if you want a good credit score.
By closing the account, you will be lowering your available credit, and unused available credit is good for your credit score. You might want to consider just freezing the card and paying it off, and then letting the fact that you aren’t using it push your credit score back up.
5. Chop it up!
This is the fun part. Once you have cancelled the account or paid it off, you can cut that puppy up and say goodbye forever. The more of a struggle this credit card caused, the more fun this will be! Part of cutting up your card is just for satisfaction, but you will also be protecting yourself from identity theft.
Scissors work great. Cut the card into at least 6 pieces. Make sure you cut the magnetic strip down the middle, and running it over a rare earth magnet to demagnetise it helps. Cut the three digit number on the back into at least two pieces, and cut your main number into at least 4 pieces.
To make sure nobody can re-assemble your card to get the numbers, put it in the garbage a piece at a time, once a week, or put a piece or two into your work garbage, and some at a friend’s house, etc. “Spread the love,” as they say.
As cool as the flames it makes are, burning plastic gives off toxic fumes that you probably don’t want to breathe in. If it was the Fourth of July or Canada Day, you could tape each piece to a separate firecracker, and launch them into the sky, up and up where the burning plastic fumes won’t hurt anyone, and Kaboom!
6. Burn your statements
One thing you can safely burn are your credit card statements. By burning them, you’re reducing the chance of identity theft, and probably having a bit of fun at the same time.
When the owners of Madison Square Gardens finally paid their mortgage off in 1940, the same year their main tenant the New York Rangers won the Stanley Cup, they symbolically burned their mortgage documents in the Stanley Cup.
The Rangers didn’t win another Cup for 54 years, so I guess you have to be careful what you burn your papers in. A wheelbarrow in the back yard will get the job done, without angering the hockey gods.
7. Check your credit rating
The last step when you get rid of a credit card is to wait a month and check your credit rating. Sometimes finance companies don’t actually report that you have paid off your card properly. The only way to know is to check your credit rating, and if they haven’t reported it properly, get them to fix it.
When you finally get rid of your credit card, life will feel good. Some people can fall into depression from too much debt. Maybe getting rid of one card won’t fix all your money worries, but the longest journey starts with one step.
Freeze that card! Set up a monthly payment, pay it off, and celebrate your success with chopping that little varmint into pieces and sending each one separately into oblivion. Freedom is yours.