How to Cancel a Credit Card: The Safe Way to Cancel a Credit Card in Canada

Why Cancel a Credit Card?

There are several legitimate reasons to close a credit card:

• High annual fees: some cards cost $150 or more per year, which isn’t justified if you rarely use it.
• Unused cards: an open but rarely used card can increase fraud risk and complicate your financial management.
• New, more advantageous card: some cards offer welcome bonuses, lower rates, or more attractive points programs.
• Financial simplification: fewer cards make it easier to track expenses, pay balances, and plan your budget.

Before taking action, it’s important to understand the consequences and properly prepare for the closure.

Before jumping straight to cancellation, check whether a few simple adjustments would do the trick: our guide on how to avoid credit card fees in Canada breaks down how to reduce or eliminate several of these costs without closing your account.

Checks Before Canceling a Card

Before closing your account, you need to verify several elements to avoid costly mistakes.

Check Your Card Balance

Make sure the total balance is paid, including any interest and fees. An unpaid balance can block the closure and result in additional fees. Also check the billing date to avoid any future charges.

Use or Transfer Your Points

If your card offers points or miles, use them or transfer them before closing. Otherwise, you risk losing them. For Amex cards, consult our guide on Membership Rewards points transfer to avoid losing anything.

Cancel Automatic Payments

Check all your automatic payments: bills, subscriptions, insurance, Netflix, or cell phone. Move them to another card to avoid payment refusals and fees.

Points Programs to Check

Before closing a credit card, it’s important to check the rewards associated with your account. Depending on the loyalty program, points may be lost when the card is canceled. In some cases, they can be transferred to a partner program, used for travel, or redeemed for statement credits.

Here’s how to manage your points according to the main rewards programs associated with credit cards in Canada.

Aeroplan

With Aeroplan, points accumulated with a credit card are automatically transferred to your Aeroplan account with each monthly statement.

Thus, once the points are deposited in your Aeroplan account, they no longer depend on your credit card. You can therefore cancel your Aeroplan credit card without losing the points already accumulated.

Subsequently, you could decide to apply for another Aeroplan credit card, taking into account the rules related to welcome bonuses. You could also choose a card that allows you to transfer points to Aeroplan, such as certain cards from the American Express Membership Rewards program.

For example, if you held the TD^® Aeroplan^® Visa Infinite* Card, you could switch to a premium card, such as the TD^® Aeroplan^® Visa Infinite Privilege* Card or the American Express^® Aeroplan^® Reserve Card.

To compare the different options, consult the best Aeroplan credit cards currently available.

American Express Membership Rewards Points

If you hold a card associated with the American Express Membership Rewards program, it’s possible to keep your points even after canceling a card. Points are linked to the Membership Rewards account, not to a specific card, and can be combined if you have multiple eligible cards. This allows you to close a card without losing your points, provided you keep at least one other card in the program.

Many cardholders start with a premium card offering a high welcome bonus, such as the American Express Platinum Card^®. After some time, some choose to cancel it if the benefits are no longer used regularly, such as unlimited airport lounge access, the $200 annual travel credit, and the $200 annual dining credit.

If you want to reduce annual fees, you can opt for a card with lower fees, such as the American Express^® Gold Rewards Card or the American Express Cobalt^® Card. You can also keep your points with the American Express^® Green Card, which has no annual fee.

Before canceling a card, make sure to check if you can transfer or keep your points in your Membership Rewards account. For more details, consult our complete tutorial on Membership Rewards points transfer.

BMO Rewards

If you hold a card associated with the BMO Rewards program, it’s possible to keep your points even after canceling a card. However, it’s recommended to plan this step before closing your account.

For example, if you’ve accumulated points with the BMO Ascend^™ World Elite^®* Mastercard^®*, you could consider applying for another BMO Rewards program card before canceling your current card.

Points can be combined in the same BMO Rewards account when multiple eligible cards are associated with the same profile. By contacting customer service, you can request that your cards be assigned to the same account, which allows you to keep your points. This process is generally done by phone and the representative will confirm that your cards share the same rewards account.

Several cards participate in the BMO Rewards program, including:

Before canceling a BMO card, make sure to keep at least one eligible card active to avoid losing accumulated points.

Marriott Bonvoy

With Marriott Bonvoy, points accumulated with your credit card are automatically transferred to your Marriott Bonvoy account with each monthly statement.

Thus, they no longer depend on your card and you can cancel your Marriott Bonvoy credit card without losing your points.

Subsequently, you can apply for another Marriott Bonvoy card to continue accumulating points, or choose a card that allows you to transfer points to Marriott Bonvoy, such as certain cards from the American Express Membership Rewards program.

To compare options, consult the best Marriott Bonvoy credit cards currently available.

How to Cancel a Credit Card

Here are the steps to follow to cancel a card safely:

1. Pay the full balance to avoid any additional fees or interest. Otherwise, use the balance transfer technique with, for example, a CIBC Select Visa* Card or a Scotia Momentum^® Visa Card.
2. Contact your card issuer by phone. Generally, this is the official channel to close an account.
3. Request account closure and confirm the cancellation date.
4. Obtain written confirmation by email or letter. This serves as proof in case of future problems.
5. Destroy your card to prevent any accidental or fraudulent use.

Does Canceling a Card Affect Your Score?

Closing a card can impact your score if you don’t plan properly. Three elements should be considered:

1. Credit history: the older your card, the more it contributes positively to your file. Closing the oldest one can reduce your average account age.
2. Credit utilization ratio: available credit decreases, and if you have other balances, your utilization ratio increases. Ideally, stay below 30%.
3. Total credit limit: losing a card reduces your total limit, which can affect your borrowing capacity and your score.

To minimize the impact:

• Don’t close your oldest card.
• Keep your total credit utilization low.
• Check your file via Equifax or TransUnion.

Alternatives to Canceling a Card

Before closing, consider these options:

• Downgrade your card: some cards allow you to reduce annual fees while maintaining your history.
• Keep a no-fee card to maintain your score and available credit.
• Use the card occasionally to keep your history active.

These alternatives are ideal for cards offering loyalty points or benefits. They allow you to maximize your rewards and protect your financial strategy.

Bottom Line

Canceling a credit card is simple if you follow the key steps: pay the balance, transfer points, contact the issuer, obtain confirmation, and destroy the card. Plan each step to protect your credit score and optimize your rewards. With these tips, you avoid unnecessary fees and maintain control of your personal finances.

How to Cancel a Credit Card – FAQ