That shiny plastic card inside the mailing envelope can make or break your finances. Some credit cardholders often get it for the wrong reasons, like spending more on credit or being lured in by a flashy sign-up bonus or a welcome gift. If you’ve signed up and activated the card and can’t control your spending, it may do more harm than good.
You might also regret having one because you can’t keep up with the monthly dues or are simply unhappy with the credit card promos the bank is offering. This ultimate guide on how to cancel a credit card in the Philippines will give you everything you need to know before you call an agent.
Should you cancel your credit card now?
You probably have a few reasons why cancelling your credit card is the best thing to do for now. Just as you thought you could earn more points and save more with a 0% installment program, your card issuer might have changed its T&Cs and increased the annual fees and other charges.
The worst is that although you are a loyal customer, they keep charging you annual fees even if you request waivers. If you’re experiencing any of the following setbacks below, maybe it’s about time to cancel your credit card:
- You’re already spending more than you can afford every month, which is leading to mounting debt and financial trouble.
- Another credit card issuer offers a great deal that suits your lifestyle, such as cashback on groceries, dining, and fuel. Plus, waived annual fees for life. If there’s no use in carrying two cards, go ahead and cancel the old one.
- You’re not satisfied with the rewards program anymore because of the changes in the T&Cs. If you need to spend more to earn more points, you should cancel your card and look for a better option.
- You’re experiencing unforeseen emergencies like job loss, unexpected car repairs, or medical bills, or you were retrenched and now have difficulty finding a new job.
- You’re facing a challenging financial situation. Sometimes, life throws us curveballs, and we have to prioritize ourselves. If you have no choice but to cancel your credit card, remember that it’s better than going into debt or getting into trouble with your credit score.
How to cancel a credit card in 5 simple steps
Your desire to cancel a credit card is valid, but it may also seem like a big step. The process isn’t complicated if you follow these steps properly. You’ll be relieved once you do.
1. Review terms and conditions on card cancellations
Before you call the bank, look at your credit card agreement. You’ll find the clause about credit card cancellation with an elaborate explanation of the requirements.
This has all the important info about any fees you might have to pay, how much notice you need to give, and the bank’s specific steps for canceling your card. For example, the Bank of Commerce in the Philippines says you can only ask to cancel your card when you’ve paid off everything you owe.
Remember, reviewing these terms and conditions helps you avoid any surprise charges or problems with your credit score. I know it can be cumbersome to read T&Cs, as most banks here use legal terms that are often difficult to understand.
If you need clarification on any of the banking terms, feel free to ask your bank for a simpler explanation or contact your financial advisor for more information.
2. Settle any remaining balance (and even fees)
Before canceling your credit card, pay off everything you owe. This means the full amount you borrowed (the principal) and any extra charges like interest, late payment fees, or other penalties.
If you don’t clear these debts, you won’t be able to cancel your card.
Be aware of any fees for closure or balance transfer before doing anything else. Some banks may charge a fee for closing an account, especially if the card is closed shortly after being opened or if special conditions, such as promotional offers, are attached to the account.
If you have an active installment plan and want to cancel it early, the card issuer will require you to pay the remaining balance and the processing fees.
Here are some of the fees for different card issuers:
Balance transfer fees
- HSBC Philippines charges a pre-termination fee if you cancel your balance transfer before the end of your repayment period. Depending on which one is higher, this fee will either be ₱300 or 5% of the remaining amount you owe for the transfer.
- Security Bank mentions that once a balance transfer transaction is approved, it cannot be reversed. In case of pre-termination or cancellation of the approved balance transfer, the bank will charge you ₱500
Pre-termination fees for installment plans
- Maybank Philippines charges a cancellation processing fee of 5% of the remaining principal balance or ₱500, whichever is higher, applicable to various installment transactions such as EzyPay, EzyCash, EzyTransfer, and other EzyPlan transactions.
- BDO specifies that the cardholder will be charged an installment processing fee of 5% of the total remaining balance or ₱300, whichever is higher after BDO has approved the balance transfer.
For the exact fees, you can also ask your card issuer before canceling your card.
3. Redeem points and rewards
Many credit cards offer rewards programs as an incentive for cardholders. These rewards can come in different forms, such as points, miles, or cashback, and can be redeemed for a wide range of benefits, including travel, merchandise, gift cards, or statement credits.
Before canceling your credit card, don’t forget to review your rewards balance and redeem any unused rewards.
Once a credit card is canceled, you lose the opportunity to use the rewards accumulated on that card.
Here’s how to approach this step:
- Check your rewards balance. Log in to your online banking account or contact customer service to inquire about your current rewards balance. Ask about any pending rewards that still need to be credited to your account.
- Redeem your rewards. Once you’ve decided how to use your rewards, continue the redemption process. This might involve redeeming points online, booking travel through the bank’s travel portal, or requesting a statement credit, among other options.
- Confirm redemption. After redeeming your rewards, ensure that the transaction is completed and confirmed. You may receive a confirmation email or message detailing your redemption.
BDO, for instance, has specific terms and conditions related to its rewards program. According to BDO’s Credit Card Points Redemption Program, you can redeem points for rewards, including annual fee waivers, cash credits, or miles conversion.
However, once the credit card account is closed, any unredeemed points will be forfeited.
4. Contact your credit card issuer or bank
Okay, if you have settled your balances and redeemed rewards, contact your bank to inform them of your decision to cancel the card. It’s advisable to do this over the phone by calling the customer service hotline provided by your credit card issuer.
Expect that during the call with the agent, it will convince you and try to persuade you not to cancel your credit card by offering you enticing arrangements—this could be waived annual fees, an increase of credit limit, or an exclusive or VIP promo.
How to cancel a Citibank credit card?
The Citibank app has all the basic features you need to manage your credit card. Unfortunately, you can cancel your card through the app, and you can only lock your card for future transactions and unlock it when you need to use it.
But if you’ve already decided to close your account, call their 24/7 hotline numbers 8995 9999 (Metro Manila), 234 9999 (Metro Cebu), and +63 2 8995 9999 if you’re calling from overseas.
How to cancel an HSBC credit card?
HSBC has a mobile banking app that lets you manage your credit card, view your transactions, and monitor your cashback and rewards. You can click the Contact & Support tab to call HSBC from your mobile phone directly.
Click the Contact & Support > Contact HSBC > HSBC Credit Card customer (02 88580000) and tap the box to activate the call.
How to cancel a Security Bank credit card?
If you have a Security Bank credit card, you can email [email protected] for a specific request, like canceling a credit card.
However, it may take a few days for a customer support agent to get back to your request, so if you’re in a hurry, you can also call the customer service hotline at +632 8887-9188 or 1-800-1-888-1250.
How to cancel a Metrobank credit card?
If you are unsatisfied with your Metrobank credit card, you can quickly request card cancellation at [email protected]. or call the contact center at 02 88 700 700 and (domestic toll-free 1-800-1888-5775).
5. Send a formal voluntary credit card cancellation letter
If you voluntarily and completely decide to close your credit card account, you may also send a written letter to make a formal request.
Most banks and credit card issuers will require and prefer cardholders to call by phone, but nothing beats a “black and white” request, including via email, to ensure they have received and acknowledged it.
Based on my research, there are also exemptions to this process. Say, for instance, you have a branded credit card like American Express issued by BDO.
The American Express Philippines website advises cardholders to call the BDO customer service numbers on the back of their card for various concerns, including card cancellation.
Other tips you should know when you cancel your credit card
When you call your bank regarding the cancellation of a credit card, the customer support agent or officer will ask you why. Make sure it’s valid because they will likely offer you attractive promos to keep you in the loop.
Of course, if you’re softhearted and easily swayed by these offers, the purpose of the call is defeated. So make sure you’re ready and head-on, fully and 100% sure to cancel your credit card.
If you’re canceling your card because of the annual fee, the officer might negotiate with you and offer a waived annual fee for life. If this is the case, it’s better to think again about whether canceling the card is worth it.
Some banks will offer you better options and special promos, but if you think managing two or more credit cards isn’t helping you be financially savvy, tell them you don’t need the card anymore and remind them not to call you again.
If you’re not comfortable using credit cards anymore, other options like debit cards and prepaid cards still offer some rewards. Just ensure you are fully aware of the terms and conditions before applying.
Once the bank approves your request and your card is successfully canceled, you should receive a notification that verifies your account is already closed. Record the date you received the confirmation as your reference.
Remember to cut your credit card (in pieces), including the EMV chip, so it won’t work anymore, and throw it away. Congratulations! You are one step closer to becoming more responsible in managing your finances.
Final thoughts
Reviewing your credit card statements and ensuring everything is in order is never a bad idea. If you’re unhappy with the service or have been charged an annual fee for something you don’t remember signing up for, it may be time to start looking for a new one.
Personally, I canceled two credit cards about seven or eight years ago, if my memory serves me well. One was a secured BPI credit card, and the other was RCBC Bankard. My reasons: I don’t need them anymore as there are other credit cards that match my lifestyle and needs. I just called the bank and made the cancellation via phone.
Did I care about my credit score? No. actually, at that time, I didn’t know that it would have an impact. It’s just that I had to make better financial decisions. Besides, I don’t have any plans for the future (yet) for applying for a loan.
That said, canceling a credit card can be a big decision, but it should not be taken lightly. Before canceling your card, you should read the terms and conditions carefully and make sure you aren’t liable to pay anything if you terminate your contract early.
It would help if you also considered the consequences of canceling your card and its impact on your credit score.
Let us know your thoughts in the comments below.