Closing your credit card accounts

Owning a bunch of credit cards just isn't cool any more. Smart folks are unloading their excess plastic, keeping only one for convenience, and paying the balance in full each month. But you can't just unload those excess cards: You have to know the game, or you could hurt your credit rating.

Getting rid of credit cards the smart way
Once your account has a zero balance, you're ready to start the process. It's important to know that the credit card company reports the account closing to the credit reporting agencies, not you, and they have two ways of doing it:

1. "Closed at customer's request" -- This tells the credit reporting agency that you divorced the bank. The bank didn't divorce you. It's what you want on your report.

2. "Closed by creditor" -- This tells the credit reporting agency that bank doesn't want your business any more. It's what you don't want on your report.

Closing a credit card account the smart way takes time, patience and organization. It is crucial to log every call you make. You want a record of exactly who said what and when, so you'll have the facts at your fingertips should there be a problem down the line.

• Get a notebook and dedicate a separate page or two for each bank account. On the top of the page write the name of the bank, name on the account, account number and telephone number. Then make columns on each page with the headings "date," "time," "person talked to" and "comments."
• For each bank, look for the customer service number on your monthly statement. If you can't find it there, get it by calling the toll-free information number: (800) 555-1212. Each time you find a number, write it in your notebook.
• Call each bank. Verbally confirm your zero balance and verbally cancel your card. If you're a good customer, expect the customer service representative to dissuade you from doing so. You may be offered perks, such as a lower interest rate. Stand firm. Tell the rep you will send a letter to confirm the cancellation and ask for the name and address of the appropriate person to send it to. Lots of luck on the name -- but at least get the address. Record everything pertinent to the call in your log.
• Write your letter to the bank. Make sure you include the account number and your name and address on the account. It wouldn't hurt to attach a copy of the last statement showing the zero balance, and the pertinent account information. Include in the letter: (1) please cancel my account (2) please notify the credit reporting agencies that the account was "closed at the customer's request." Make a copy of the letters and attachments for your files.
• Mail the letters by certified mail with return receipt requested. When you receive the return receipt, staple it to the appropriate letter in your file and post the date received in your log.
• A month after you receive your last return receipt, check your credit reports to make sure all accounts are reported as "closed at the customer's request." You can order copies of your credit report from the three major credit reporting agencies by mail, phone and online.
• If the credit report is correct, you're done. If it's not, start all over again: Call the bank to report the mistake, request that they fix it and follow up with a certified, return-receipt letter.
• Keep going until the job gets done.