As the economic situation of the nation is forcing families to take a harder look at their finances, many are deciding to pay off and close out some of their credit card accounts, to lessen temptations and to keep their finances and budgets in order. Canceling a credit card involves a lot more effort than simply cutting up the piece of plastic in your wallet. In fact, if you do not take the appropriate steps for cancelling your accounts, you can end up with a serious mess.

Take into consideration these 8 tips when you are ready to shut down your accounts.

1. Pay It Off First

You should never close any account that still shows a balance. Your interest rates can skyrocket if you do and you will wind up being penalized and responsible for extra fees based on the balance you keep. So, make sure you pay off your credit card first before your consider closing it.

2. Consolidation May Work

Many people make the mistake of having too many credit card accounts open because of the attractive promotions and offers that got them to apply for the card in the first place. Your credit score can be hurt if you have too many accounts open at one time and your score can also be negatively affected by closing too many accounts at the same time. You many want to consider consolidating card balances onto lower interest cards. When the cards are paid in full, you can then close your “extra” accounts.

3. Track Your Process On Paper

When it comes time to close out the credit accounts you have, be prepared with your account information, a sheet of paper, and a pen before you make the call to the credit card company. You want to make sure you record the details of the call, including the date, time, representative’s name, and all other details that pertain to your conversation with the company. You never know when the information might come in handy. Just because you call to cancel, does not mean it will be handled in the correct or a timely manner the first time around.

4. Ask for a Report

After closing out your account, make a point to ask the company representative to report the account closing to the three credit bureaus as having been cancelled at your (the customer’s) request.

5. Get Confirmation

After conversing with the company rep, ask for a written confirmation of the account closing to be mailed to you. Mark the date on the calendar, as well as a reminder to follow up with the company if you have not received the confirmation letter in the mail within two weeks. You don’t want to forget to follow up and you will want to keep the confirmation letter in your records. Never assume the company will handle it without your own persistence.

6. Watch Out for the Crafty Sales Pitch

If you have been a good customer for a long period of time, chances are good that the credit card company will not want to lose you. In some cases, the company representative may transfer your call to another rep or even try to pitch to you on their own. There may be an unexpected deal offered your way to stay. It’s wise to consider the offer but under no circumstances should you feel bad about sticking with your original decision.

7. Resist the Temptation

If you are in a position where you have struggled with irresponsibility in credit card spending, it may be wide to close all accounts but one to reduce the risk of getting back into a bad habit. Your credit score may be affected slightly by the changes to multiple accounts but for the long-term, you may be more capable of staying on a good financial path.

8. Don’t Let History Be Repeated

After cancelling the credit cards you had, you may revel in feelings of financial freedom. These feels may lead you to believe that all is well and prompt you to seek out more credit cards, especially when the offers keep filling up your mailbox each day. Don’t fall for it or risk going backwards with your money management plans.

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