Credit cards can be incredibly powerful financial tools, and they can also get you out of a bind now and then. Even online mega-platform, Amazon, has come out with its own credit card that allows you to shop on Amazon and anywhere else while earning rewards towards Amazon gift cards. This cash-back rewards card is great for many people, but when you need to cancel your account, there is little to no information on how to do it.
While the Amazon credit card can be managed online, it cannot be canceled on the internet. To cancel your Amazon credit card, you'll need to call Amazon customer service at 888-247-4080 and specifically request to cancel your account. If you have any remaining balance, you will need to pay it off.
Credit cards, and the Amazon credit card, in particular, can sometimes be difficult or confusing to cancel. While the process for canceling your Amazon credit card is relatively simple, there are some things to take into account when you do so, such as your balance and the potential impact on your credit. We're going to look at just how you can cancel your Amazon credit card, your Amazon store card, and what impact the cancelation may have on your credit score.
Canceling An Amazon Credit Card
The Amazon credit card and Amazon store card can be extremely useful for those who spend often and shop on the online platform; however, there may come a time when you'll need to cancel the account for one reason or another. Searching the Amazon site yields little in terms of online cancelation, which is likely to prevent instances of fraudulent activity but can make the process seem more complicated than it is.
If you need to cancel your Amazon credit card for any reason, it is a one-step process. Simply call the Amazon credit card customer service line at 888-247-4080, and request that your credit card account be canceled.
When you call and speak to a customer service representative, you will need to prove ownership of the account. The methods in which this is done and the questions they may ask you are going to change and will deal with confidential personal information. With this in mind, you must make a conscious decision to call them from an environment of privacy, where your answers and information are unlikely to be overheard.
Once you give the agent the needed information and have proven that you are the owner of the account or an authorized cardholder, you will need to verbally confirm your request to cancel at least once or twice to avoid accidental cancelations. If you are sure you want to cancel, reaffirm this with the representative, and they will promptly cancel your account.
Warnings Before Canceling Your Amazon Credit Card
There are two caveats to canceling your Amazon credit card. The first is that upon cancelation, any reward points that you had accumulated but are yet unused will be forfeited. So if you're planning on canceling the card, make sure you cash out any remaining benefits you have before finalizing the cancelation.
The other warning is that if you currently have a balance on your Amazon credit card, canceling the account will not relieve you of that balance or debt, and you will need to continue to make payments on the balance until paid. It's more common than you may think for someone to cancel a credit card thinking that they are going to be able to ignore the balance.
Does Canceling A Credit Card Hurt Your Credit?
While it's true that canceling a credit card can hurt your credit, the tangible impact on your credit can vary significantly and will depend on your particular credit circumstances and specifics. For example, closing the credit card you've had the longest will often have the biggest impact since it can make your credit history seem much shorter. Closing high-limit cards, whether old or new, will change your credit utilization is scored, which can also reduce your score.
The length of your credit history only accounts for about 15% of your score, so while the impact won't be huge, it will be there. The length of your credit history gives new potential creditors an idea of how long you've been given lines of credit or installment loans. This means that canceling a credit card that you've had for any length of time will have an impact on your score, but an older account that has been open for longer than others will have a greater negative impact on your score.
The limit on the credit card will have a much greater impact on your overall score when you close the account. Your credit utilization rate counts for nearly one-third of your credit score, and raising that rate by closing an account can bring your score down by anywhere from 20 to 50 points or more, depending on the specific changes in your ratio. The utilization rate is a metric that shows potential lenders or creditors how much you use of your available credit limits, with higher rates indicating a borrower that may potentially have difficulties with living within their means.
The Best Way To Cancel A Credit Card
The best way to cancel and credit card account is to first understand how the loss of that account will impact your credit rating. This will help guide you to choose the card that will either have the least negative impact or potentially a positive impact on your score. This means knowing how to figure out your credit utilization rate, as well as knowing the reason behind your account cancellation.
Understand How Credit Utilization Works
One major concern before canceling any credit card account is how it will end up affecting your overall credit utilization rate. This is a ratio represented by a percentage of the total amount of credit you've been extended which is being used. That may sound complicated, but it's much simpler than it seems. Let's take a look.
For our first example, suppose there is a consumer that is just starting to build their credit history and currently have a single credit card. This is common when starting since cards for limited to no credit are relatively rare, and often require a security deposit to secure against default. If this consumer's single secured credit card has a $200 limit, and they have charged $50 this month their credit utilization rate is 25%, which is relatively good.
For someone else who has a more established credit history, they may have 4 total credit cards, each with a limit of $1,000, for our example. They have one maxed out, and another with a $500 balance, with the other two at a $0 balance. They have total credit of $4,000, with $1,500 of that utilized, putting them at a 37.5% utilization rate which, while not terrible, is north of the optimal 30% benchmark.
Know Your Reasons For Canceling
The reasons for canceling a credit card can be fairly diverse, so we're only going to cover the most common here. Most people cancel a credit card either because they want to eliminate the temptation to use it when it's not needed, because it has high annual fees or higher interest than their other cards, or because the joint owners are becoming legally separated or divorced.
One of the largest reasons that people cancel is that one of the cards they have just costs too much to maintain. This can be from either annual fees or the interest on balances that aren't paid off each month. If it's a rewards card, be sure you weigh the costs of the card in the context of the benefits you receive.
Temptation For Irresponsible Spending
In some cases, even with managed spending and the most rigorous budgeting, consumers decide that having a credit card is simply too large of a temptation. The urge to spend when they know beforehand that they don't have the money to make the purchase might just be too great. If this sounds like your habits, there are alternatives to try before canceling the account. Try leaving the card at home and deleting the payment information from your smartphone to avoid impulse buys.
Divorce Or Separation
Usually, in separation or divorce proceedings, there will be an order to close all joint accounts, and even if there isn't, it's a smart move. Vindictive exes have been known to run up credit cards, knowing that their partner will be legally responsible for any potential debt incurred.
Understand How To Cancel Your Amazon Credit Card & How It Affects Your Credit
While the process for canceling your Amazon credit card is relatively simple and quick, it can have lasting effects on your credit score. It's important to understand how these effects will change your score before you cancel your Amazon credit card or any other credit card before you follow through with the cancelation. Knowing the details before you commit to canceling can save you significant work rebuilding your credit later.
Also read: Closing Date on Credit Cards – What You Need to Know
Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author. He's been featured on Forbes, The Consults Corner on TAE Radio, The Writing Biz, What's Your Story, and more.