In Episode 24 of Miles Ahead: The Canadian Points Podcast, Daniel, Jeff, and Josh from FrugalFlyer.ca break down when it makes sense to cancel a credit card, and when it doesn’t. They share insider tips on avoiding long hold times for customer service, obtaining retention offers, and protecting your points and credit score.
Whether you’re trimming down your wallet or managing your credit strategically, this episode of Miles Ahead covers the best practices for closing (or not closing) your cards in Canada and the United States.
(01:04) Reasons to Cancel a Credit Card
There is no shortage of reasons as to why you might want to close a credit card, including changing personal finance needs, if the annual fee you are paying outweighs the benefits received, or changes in lifestyle or travel patterns.
(3:34) How to Cancel Credit Cards Efficiently (Bank-Specific Tips)
There are several tips and tricks that allow cardholders to close their credit cards more efficiently and save time, whether that is using a priority line skip via a mobile app, secure messaging, or live chat.
(7:28) Tips for Canceling Amex Cards in Canada & The United States
Closing an American Express card is a bit different, as you need to be aware of dates to avoid point clawbacks in addition to maintaining your Membership Rewards points balance. Plus, since you can close US American Express cards via live chat, the team shares a few tips as to how you can make that process smoother.
(10:15) Alternatives to Canceling: Retention Offers & Product Switching
Before you cancel a credit card, its worth seeing if there are any retention offers available to provide you additional value in holding the card for another year (usually only offered by American Express). Similarly, perhaps product switching or downgrading a card is a better fit, depending on your needs.
- Learn More: American Express Retention Offers
- Learn More: TD Product Switching, CIBC Product Switching, & RBC Product Switching
(16:41) Don’t Cancel Yet: Use Your Credits and Benefits First
If you are going to cancel a card, you’ll need to double-check that you have gotten the most value possible out of the benefits and perks before closing. Whether you have paid for a trip and were planning to utilize the travel insurance, or have yet to use a hefty travel credit, ensure you aren’t leaving anything on the table before cancelling.
(22:38) How Canceling a Card Affects Your Credit Score
While cancelling a credit card has a short-term impact on your credit report and score, the impact is minimal in the long term. Provided you think ahead and are keeping your oldest credit cards open forever, and are practicing good financial habits including making payments on time and keeping utilization low, you should be able to maintain a good credit score even when closing cards.
- Learn More: Credit Score Guide & How to Build or Repair Your Credit Score
(26:38) Conclusion
If you have any episode-specific questions, leave a comment below. If you have any questions you would like us to answer on Miles Ahead, submit them here.
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Join us for the next episode, where the Frugal Flyer team recaps all of the recent miles and points news, in addition to answering a few readers’ questions.
Listen to Miles Ahead: Episode 25 – Miles & Points News + Listener Questions.
Hey guys,
Great episode and I appreciate the topics. I was really excited to use secure messaging to close a P2 CIBC card, but I couldn’t find it on the site and when I reached out I was told that they don’t offer secure messaging except when applying for a new card. Is that how you were able to close old cards?
Thanks!
Hi Brams,
Glad you enjoy the podcast! After chatting with Jeff, it looks like this might not be a thing anymore. Your best play with CIBC is to request a callback via live chat if you are looking to cancel a card.
Hello, great information and channel, I just discovered that I can ask question’s here. You mentioned there’s a certain amount of rng involved in getting a retention offer. Do you know how likely it would be to get a full or partial refund on credit cards, assuming you charge a decently significant amount each year?
Hey Mike – that will likely depend on the bank. For example, I’d say with CIBC or Scotiabank you have a decent chance, vs. Amex will probably not just waive an AF because you ask nicely. But it never hurts to ask!