How to Close a Secured Credit Card

Secured credit cards can help you rebuild your credit when you can’t borrow with unsecured credit lines. However, once your credit score has improved, you will most likely want to switch to an unsecured card, where you can earn more rewards and do not have to pay a deposit.

Method 1 Closing a Secured Credit Card

1. Contact your lender. Call the customer service number listed on the back of your credit card to cancel your account. Inform the bank that you want to cancel your secured credit card “at the request of the cardholder,” and specify the date you want the cancellation to take effect. If you have an outstanding balance on the card, you should pay it in full over the phone, online, or by mail before the cancellation effective date. Even if you are unable to pay off your balance in full, you can still have your account closed to new charges, preventing you from adding new charges to your existing balance. You can close your account once you have paid off the balance.

Keep a written record of your phone call, including the date, time of day, and who you spoke with, as well as any agreement reached.

While cancelling your card prevents you from making further purchases, it has no effect on the amount you owe the lender. You must pay any charges made on the card prior to cancellation, whether or not those charges are posted on the day you cancel.

If you prefer not to call your lender, you can cancel your credit card by sending a certified letter to the credit card company. Include your account number, the date you want your cancellation to take effect, and your signature and date on the letter. The lender should send you confirmation that your account has been cancelled at your request.

Because your lender most likely does not want to lose your business, you should expect them to try to persuade you to stay. You can avoid this by stating clearly on the phone call that you are no longer interested in holding the card and providing a specific date on which you wish to close the card. If the representative does not respect your wishes, thank them for their assistance and state unequivocally, “I am calling to cancel my card; I am not willing to negotiate.”

2. Take your deposit. The lender holds a deposit on your secured credit card and owes you that amount when the account is closed. However, the bank will most likely keep that money for 30 – 90 days after the effective date of your closing to ensure that there are no stray charges that haven’t cleared your account yet. When you call your lender to cancel your card, inquire about how long they will keep the deposit and what method they will use to repay you.

Make sure the bank has your most recent address on file so that if your deposit is mailed to you, you will receive it as soon as possible.

If the date on which you expected to receive your deposit has passed and you have not yet received it, contact your lender again and inquire about the status of your deposit. Refer back to the cancellation conversation and the date the bank promised to pay you back. Inquire about the method they will use to refund your deposit and when you can expect it.

3. Your card should be cut up. Your account will be permanently closed once you receive your deposit refund or cancellation confirmation. You should cut up your card and throw it away permanently so that you don’t accidentally try to use it and so that no one else tries to use it or pretend to be you. Don’t forget to update any automatic payments from your cancelled credit card.

Method 2 Converting a Secured Card to an Unsecured Card

1. Examine your credit score. Before you close a secured credit card, make sure you’ve rebuilt your credit to the point where you can borrow with unsecured cards. In most cases, an unsecured line of credit requires a credit score of at least 650. If your credit score is above 700, you are likely eligible for the majority of credit cards on the market. If your credit score is still below these thresholds, you should keep your secured card for a little longer before switching.

Your credit score is often displayed on your monthly statement for secured credit cards. You can use your statements to determine when it is appropriate to switch.

If your secured credit card statement does not include your credit score, you can obtain a free credit score and report once a year from the three major credit bureaus. Request your credit score at

If you’ve already checked your credit score from the agencies in the last year and are still unsure of your current score, you’re also entitled to a credit score report whenever you apply for a new card. As a general rule, one year of good behaviour on your secured card is required to rebuild your credit and obtain an unsecured card.

2. Please contact your secured card provider. If you’ve made on-time payments and kept your spending on your secured card to a minimum, your lender will want to keep you as a customer once you’re ready to switch to an unsecured card. You may be able to switch your card from secured to unsecured without having to apply. Call the number on the back of your secured card and inquire about your credit card conversion options.

Inquire with the bank about the specifics of the unsecured card you intend to use, such as the interest rate and whether or not an annual fee is required. You should also inquire whether you can keep your current account number on your new card, so that your good behaviour on your secured card remains on your credit history for as long as possible. Inquire with your lender to see if this is an option for your account.

Your bank may offer you the option of continuing to use a secured credit card with an increased spending limit, allowing you to spend more than your deposit. This is referred to as a partially secured credit card, and it may be a viable option if your credit score is still too low to qualify for an unsecured card. There is no reason to keep your savings tied up in a secured card if you can qualify for an unsecured card.

If your credit score is high enough to warrant switching to an unsecured card, don’t be afraid to tell the bank. Inform your lender that you intend to switch to an unsecured card, whether through them or not, and inquire about the best solution the bank has to offer.

3. Take your deposit. To open a secured credit card, you must make a cash deposit to the lender equal to your credit limit. This ensures that the bank does not lose money on your purchases and encourages the bank to lend to you even if you have a low credit score. You will receive your deposit back once you have rebuilt your credit and closed your account. The bank will most likely hold your deposit for an additional 30 – 90 days after you close your account to ensure that no additional charges are incurred after you close your account. After this time period has passed, the bank will refund your deposit, less any fees or unpaid outstanding balance on your card.

You may need to bug your lender in order to get your deposit back as soon as possible. When you call to close your account, ask how long it will be before the bank returns your deposit and how they will do so. Check that the bank has an up-to-date address on file if you want to send a check, or instruct them to deposit the funds in your checking or savings account if you have one with that lender.

If the bank issues you a new card to use on your unsecured account, wait until you receive the deposit on your secured card before cutting it up and throwing it away. This will prevent you from inadvertently using the card.

4. Use your unsecured credit line with caution. It is just as important to make on-time payments and keep your spending in check on your new unsecured card as it was on your secured card. Remember to always make your payments on time and to never use more than one-third of the credit line amount you have been approved for. Your credit line is no longer secured by a deposit, so keep track of your spending to avoid accruing a large balance that you can’t pay off. This will ensure that your credit score continues to rise.

Method 3 Closing a Secured Card to Open an Unsecured Card

1. Select your new credit card. Choose the credit card that best meets your requirements. Because you are switching from a secured card, your options may be limited based on your credit score. If your credit score is above 700, you will most likely be approved for the majority of credit cards on the market. If your credit score is less than 700, you may need to look for a card that does not charge annual fees or has a high interest rate.

The best credit cards, in general, are those that earn cash rewards as you use them, also known as cash back cards. Cash back cards frequently offer options for redeeming your points, such as cash, but also gift cards or travel rewards. These cash back cards are generally more valuable than other reward cards.

Some department stores, such as WalMart, offer no-fee credit cards that can be used at other stores and will frequently lend to customers with poor credit. If you are still unable to qualify for general cash back cards, this may be a viable option.

Because your credit score is influenced in part by your approved credit limit, closing your secured card before opening a new one can lower your credit score and affect your ability to open the new card. Begin by selecting the unsecured credit card you want to use, and then close your secured account once the new one is open.

2. Fill out an application for a new card. Fill out an application for the credit card that you want to use. You will need your social security number, address, phone number, and date of birth to do so. Once approved, the new lender will mail you your card, which you should activate by calling the number provided with the new card. Before closing your secured card, make a purchase with your new card to ensure that it is functional.

If you apply for a card and are denied, the lender will send you information about why you were denied, including your credit score. Read this information carefully and consider whether you should continue to use your secured credit card until your credit score improves.

3. Close your secured credit card. Remember not to close your secured card until you have received and activated your new card and have been approved for it. After that, you can close your secured card by calling the phone number on the back of your secured credit card and requesting that your account be closed. If you have an outstanding balance on the card, you can request that the lender deduct the outstanding balance from your deposit before returning it to you.

You should consider staying if your secured card lender asks you to. If you want to improve your credit score, having two cards won’t hurt, and using only a portion of the amount for which you are approved will help. However, because you have already been approved for an unsecured card, notify your secured card bank that you no longer wish to use secured cards. Inquire about the options for converting your secured card to an unsecured card, and avoid switching to a card with annual fees.

When you close your secured card, the lender will most likely keep your deposit for an additional 30 – 90 days to ensure that no additional charges are added to your account. They will refund your deposit once the waiting period is over. When you close your card, make sure you ask about the timeline for receiving your deposit and provide up-to-date information on your address or bank account to ensure a smooth return of your deposit.

When you have received your deposit and are certain that your account has been closed, cut up your old credit card and throw it away. This ensures that you never use your closed credit card by accident, and that no one steals it and tries to reactivate your account.

4. Make use of your new card. You should continue to build your credit by using your new unsecured card responsibly, just as you did your secured card. Always make on-time payments and only use a small portion of your approved credit line. To avoid a drop in your credit score, aim to use about 20% of your approved credit limit, and never more than 13%.

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