Closing an American Express credit card is a straightforward process, but it's important to approach it strategically to avoid any potential pitfalls. Ready to learn how? Let's dive in!
Step 1: Before You Close - The Pre-Closure Checklist
Before you even think about picking up the phone or logging online, there are a few crucial steps to take. This isn't just about closing a card; it's about making a smart financial move.
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| How Do You Close An American Express Credit Card |
1.1 Settle Your Balance
This is paramount. You must pay off your entire outstanding balance before closing your American Express card. Even a small remaining balance can complicate the closure process and potentially incur interest or fees.
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Why it's important: American Express won't typically close an account with an active balance. Furthermore, closing an account with a balance can negatively impact your credit utilization, a key factor in your credit score.
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How to do it: You can make a payment through your Amex online account, via the mobile app, or by calling customer service. Ensure the payment clears before proceeding to the next steps.
1.2 Redeem Rewards Points
Don't let your hard-earned rewards go to waste! American Express Membership Rewards points are valuable. Once you close your account, you generally forfeit any unredeemed points.
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What to do: Log into your Amex account and check your points balance. Redeem them for statement credits, gift cards, travel, or transfer them to a loyalty program. Do this before you initiate the closure.
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Consider this: If you have multiple Amex cards, you might be able to combine points across accounts. Check with Amex customer service for options.
1.3 Transfer Automatic Payments and Subscriptions
Many people link their credit cards to automatic bill payments for utilities, streaming services, or subscriptions. Forgetting to update these can lead to missed payments and late fees.
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Make a list: Go through your recent statements (physical or online) and identify all recurring charges.
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Update them: Contact each service provider individually and update your payment method to a different card or bank account. Do this well in advance of closing your Amex card.
1.4 Review Annual Fees
Be mindful of your card's annual fee. If it's about to post, and you're planning to close your card, you might want to time your closure just after the fee posts and before its due date. American Express often offers a pro-rated refund on annual fees if you close your card within a certain period after the fee posts (often 30-60 days). Always confirm this directly with Amex.
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Step 2: Choosing Your Closure Method
American Express offers a couple of ways to close your credit card. While online options are convenient for many things, calling is often the most direct and recommended method for card closures.
2.1 Call American Express Customer Service (Recommended)
This is generally the most efficient way to close your card. You'll speak directly with a representative who can guide you through the process and answer any questions.
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Find the number: The customer service number is usually on the back of your card or on your monthly statement. You can also find it on the official American Express website.
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What to expect:
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Verification: You'll need to verify your identity.
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Retention offers: Be prepared for a retention offer. Amex might try to persuade you to keep your card open by offering bonus points, statement credits, or a waived annual fee. Politely decline if you're set on closing.
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Confirmation: The representative will confirm the closure and often provide a confirmation number. Write this down!
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Timeframe: The closure is usually immediate, but it might take a billing cycle or two for your account to reflect as closed on your credit report.
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2.2 Online Closure (If Available)
While not always explicitly advertised for card closures, some Amex accounts might offer an option to close online via your account management portal. However, for a definitive closure, a phone call is generally preferred.
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Check your account: Log in to your American Express online account. Look for options related to "Account Services," "Manage My Card," or similar.
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Proceed with caution: If you find an online closure option, ensure you receive clear confirmation of the closure.
Step 3: The Follow-Up and Confirmation ✅
Closing your card isn't just about making the request; it's about ensuring the closure is properly processed and doesn't negatively impact your credit.
3.1 Get Confirmation in Writing ✉️
Always ask for written confirmation of your account closure. This can be an email or a letter sent to your mailing address.
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Why it's important: This serves as proof in case of any discrepancies or issues down the line.
3.2 Monitor Your Credit Report
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After a month or two, check your credit report (from all three major bureaus: Equifax, Experian, and TransUnion) to ensure the American Express account is reported as "closed by grantor" or "closed at consumer's request."
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Free credit reports: You're entitled to a free credit report from each bureau once a year via AnnualCreditReport.com.
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Dispute inaccuracies: If you find any inaccuracies, dispute them immediately with the credit bureau.
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3.3 What to Do with the Physical Card ✂️
Once the account is officially closed, you should destroy the physical card.
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Shred it: Use a paper shredder to shred the card, ensuring the magnetic stripe and chip are also destroyed.
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Cut it up: If you don't have a shredder, use scissors to cut through the card number, your name, the security code (CVV), and the magnetic stripe. Make multiple cuts.
Step 4: Understanding the Credit Score Impact
Closing a credit card can have both immediate and long-term effects on your credit score. It's crucial to understand these to make an informed decision.
4.1 Credit Utilization Ratio ⚖️
This is the most significant factor. Your credit utilization ratio is the amount of credit you're using compared to your total available credit. Closing a card reduces your total available credit, which can increase your utilization ratio if you carry balances on other cards.
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Example: If you have two cards, one with a $5,000 limit and one with a $10,000 limit, your total available credit is $15,000. If you owe $1,000 on the $5,000 card, your utilization is 6.67% ($1,000/$15,000). If you close the $10,000 card, your total available credit drops to $5,000, and your utilization jumps to 20% ($1,000/$5,000), which can negatively impact your score.
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Mitigation: Pay down balances on other cards before closing an Amex card to keep your utilization low.
4.2 Average Age of Accounts (AAoA) ️
Closing an older credit card can reduce your average age of accounts, especially if it's one of your oldest credit lines. A longer credit history generally looks better to lenders.
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Consider this: If the Amex card is one of your newest cards and you have several older accounts, the impact on your AAoA might be minimal. If it's your oldest card, the impact could be more significant. Closed accounts can remain on your credit report for up to 10 years and continue to contribute to your AAoA during that time.
4.3 Number of Accounts
Closing a card also reduces the total number of open credit accounts you have. While not as impactful as utilization or AAoA, having a healthy mix of credit (credit cards, loans, etc.) can be beneficial.
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Frequently Asked Questions (FAQs) About Closing an American Express Credit Card ♀️
How to check my American Express credit card balance?
You can check your American Express credit card balance by logging into your online account on the Amex website or through the American Express mobile app. Your balance is usually prominently displayed on the dashboard.
How to redeem American Express Membership Rewards points?
To redeem American Express Membership Rewards points, log into your Amex online account, navigate to the "Rewards" section, and explore the various redemption options such as statement credits, gift cards, travel bookings, or transfers to airline/hotel partners.
How to find the customer service number for American Express?
The American Express customer service number is typically printed on the back of your physical credit card. You can also find it on your monthly Amex statement or by visiting the official American Express website and navigating to their "Contact Us" section.
How to transfer automatic payments from a credit card?
To transfer automatic payments, you'll need to contact each service provider (e.g., utility company, streaming service, subscription box) directly. Log into their respective websites or call their customer service to update your payment method to a different credit card or bank account.
How to confirm an American Express card closure?
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When closing your American Express card over the phone, request a confirmation number from the representative. Additionally, ask for written confirmation (via email or mail) of the account closure for your records.
How to destroy a closed credit card safely?
To safely destroy a closed credit card, use a cross-cut shredder to shred the entire card, ensuring the chip and magnetic stripe are destroyed. If you don't have a shredder, use scissors to cut through the card number, your name, the security code (CVV), and the magnetic stripe multiple times.
How to check my credit report for closed accounts?
You can check your credit report for closed accounts by visiting AnnualCreditReport.com. This website allows you to obtain a free copy of your credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) once every 12 months.
How to dispute an inaccuracy on my credit report?
If you find an inaccuracy on your credit report, you can dispute it directly with the credit bureau (Equifax, Experian, or TransUnion) that is reporting the incorrect information. Most bureaus have an online dispute process, or you can send a dispute letter via mail.
How to mitigate the credit score impact of closing a credit card?
To mitigate the credit score impact of closing a credit card, try to pay down balances on your other credit cards to keep your credit utilization low. Also, consider the age of the account you're closing; closing your oldest account generally has a larger impact on your average age of accounts.
How to avoid annual fees when closing an American Express card?
To potentially avoid or get a refund for an annual fee when closing an American Express card, try to time your closure shortly after the annual fee posts but before its due date. American Express often offers a pro-rated refund if you close your account within a specific timeframe (e.g., 30-60 days) after the fee posts. Always confirm this policy with Amex customer service.
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