Short answer: To close a credit card safely, first clear all dues and redeem any rewards, cancel auto-payments linked to it, then request closure through your bank’s app, helpline, or email. Under RBI rules, the issuer must close it within 7 working days or pay you a penalty. Be aware that closing a card can temporarily lower your credit score by raising your utilisation and shortening your history, so sometimes keeping it open is smarter.
Closing a credit card sounds simple, but done carelessly it can ding your credit score. Here is how to do it right, and when not to do it at all.
First, should you close the card?
Before you close, know that closing a card can hurt your credit score in two ways:
- It raises your credit utilisation. Closing a card removes its limit from your total available credit, so the same spending now represents a higher percentage, which can lower your score.
- It can shorten your credit history, especially if it is one of your older cards. A long credit history helps your score, so closing an old account can set you back.
So closing is not always the best move. Good reasons to close include an annual fee that is not worth it, too many cards to manage, or a card that tempts you to overspend.
Consider these alternatives first
Often, you do not need to close the card at all:
- Downgrade to a no-fee card. Many banks let you switch to a basic, lifetime-free version from the same issuer. You keep the history and limit, and lose the fee.
- Request a limit reduction. If a high limit tempts overspending, ask to lower it rather than closing the card.
- Keep it open but active. Use it for a small purchase occasionally and pay in full. This keeps the account active, preserving your history and available credit.
If none of these fit and you still want to close, here is how.
How to close a credit card, step by step
- Clear all outstanding dues. You must pay off the full balance before closure. A card cannot be closed with dues pending.
- Redeem your reward points. Any unused points or cashback are usually forfeited on closure, so redeem them first.
- Cancel linked auto-payments. Move any recurring bills or subscriptions to another card or account, so nothing fails after closure.
- Request closure through an official channel. Banks must offer multiple options, helpline, dedicated email, IVR, website link, net banking, or app. Use any of these to submit your request.
- Get written confirmation. After closure, you should receive confirmation by email or SMS. Keep it.
- Destroy the physical card securely once closed.
- Verify on your credit report after 30 to 45 days, to confirm the account shows as “closed” with no dues.
Your rights: the RBI closure rules
The RBI protects you here. Under its credit card rules:
- The issuer must process your closure request within 7 working days (once all dues are cleared).
- If they fail to do so, they must pay you a penalty of ₹500 per day of delay until the account is closed.
- You cannot be charged a closure fee, closing a card is free.
If your closure is delayed beyond this, you can escalate, including to the RBI Ombudsman.
Which cards to keep open
If you have several cards and want to simplify, keep the ones that help your score:
- Your oldest card, which anchors your credit history.
- Your highest-limit card, which supports a low utilisation ratio.
- Any lifetime-free card, since it costs nothing to keep and quietly helps your score.
Close the newer, fee-charging, or rarely-used cards instead, ideally not all at once.
Frequently asked questions
Does closing a credit card affect my credit score?
It can. Closing a card removes its limit (raising your utilisation) and can shorten your credit history, both of which may temporarily lower your score. Keeping a card open, even lightly used, is often better.
How long does it take to close a credit card?
Under RBI rules, the issuer must process your closure request within 7 working days of you clearing all dues. If they delay, they must pay you ₹500 per day as a penalty.
Do I lose my reward points when I close a card?
Usually yes. Unused points and cashback are typically forfeited on closure, so redeem them before you close the card.
Is there a fee to close a credit card?
No. Closing a credit card is free under RBI rules. You only need to clear any outstanding dues before closure.
Which credit card should I keep if I want to close some?
Keep your oldest card (for history), your highest-limit card (for low utilisation), and any lifetime-free card (costs nothing). Close newer or fee-charging cards instead.
With Jupiter: a lifetime-free Edge+ RuPay Credit Card is easy to keep active and helping your score. Related reading: what is a credit score and how to read your credit card statement.
Manage your cards with ease
Whether you keep one card or several, the goal is to manage them well. The lifetime-free Jupiter Edge+ RuPay Credit Card has no annual fee, so it is easy to keep active and helping your score, with everything visible in the app. Jupiter is the 1-app for everything money.
RBI rules and credit scoring effects are subject to change and individual circumstances. This article is general information, not financial advice. Refer to your issuer’s terms and the latest RBI guidelines.
