Credit cardholders look to their cards as a convenient and ready source of financing. You might be surprised to learn a credit card issuer can close your account without notification for a variety of reasons.
Reader Susan, for one, writes that her credit card was canceled with no notification. She says, “My husband died in April. I thought we were co-account holders on the card. My husband was deaf and I always managed the card. Well, eight months later they canceled my card and didn’t notify me. I always pay off my balance every month as a rule, which is what I always did. I know there were charges on the card. I can’t talk to anyone that will tell me anything. I had several hundred miles on the card. What can I do?”
Banks don’t need to notify about credit card account closings
The Truth in Lending Act requires your card issuer to notify you of certain significant changes to the terms of your card account. For instance, it must notify you at least 45 days in advance before raising some fees and also before raising your card interest rate.
However, if your variable interest rate is based on an index, such as the prime rate, and the index goes up, your issuer does not have to notify you that your interest rate will go up too. The issuer also doesn’t have to give you advance notice when your promotional interest period ends and your interest rate goes up as a result. (You should have already been aware of that from the terms of the promotional offer.)
Issuers also don’t have to notify you in advance if they decide to close your credit card account.
Reasons for an issuer to close a card account
If you are not on board with any change that your card issuer notifies you about in the terms of your credit card account, it could go ahead and close your account.
If you violated the terms of your card agreement in some fashion, that could also cause the bank to shut down your account. Another cause could be that you haven’t used your credit card in a while. Card issuers would then not be making any money off you and they would prefer to extend credit to someone else who makes them money.
Issuers also tend to review your financial situation from time to time. They could look into your creditworthiness and decide whether to continue doing business with you. They could consider input such as the number of late payments on your account, if you have any liens against you, how many new credit accounts you have, and if you have overextended yourself. If they find your financial situation has deteriorated since they first approved you for their card, they could well decide to cancel it.
Talk to your card issuer
Whatever the reason, if you did not like this surprise and want to hold on to your card, your best bet is to negotiate with the issuer. Tell your bank representative that you want to continue using your card and see what they can do for you.
Susan, it must have been an unpleasant experience to have your credit card shut down, curtailing your finances, following the loss of your husband. If you are a joint account holder on your card with your ex-husband, your issuer cannot close the account or modify its terms just on account of his death. However, it might want to see if you continue to qualify for the card on your own strength to decide whether to continue to extend credit to you.
As for the miles you have on the card, whether you can retain them after a card’s closing depends on what type of miles these are. If they’re made out by your card issuer itself, most likely you will not have access to them following a card’s closing. However, if the miles are issued by another entity, such as an airline, in a tie-up with the issuer, you will likely be able to hold on to those miles since they will post with the airline itself and not the issuer.
The bottom line
A card issuer can close your credit card without advance notification. If you haven’t been using your card or if you violated the terms of your card account, that could lead the issuer to close it. It can periodically review your account and in case you appear less creditworthy than when you opened the account, that could be another cause for an issuer to close your account. In any event, if you want to hold on to the account, you should negotiate with the issuer. Susan, I hope you can make a good case to keep your account.
Contact me at with your credit card-related questions.
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As your banking needs change, you may find yourself in a situation where you need to close a bank account. It could be that you’re moving and need to find a new bank or want to switch banks to take advantage of better interest rates. Whatever the reason, you’ll likely want to close your old bank account.
Closing a bank account isn’t complicated, but there are actions you can take to ensure the account is closed correctly—and all of your money accounted for. Follow these steps when closing a bank account.
Reasons for Closing a Bank Account
You don’t need a reason to close a bank account. However, there are numerous reasons you might want to. Here are some of the more common reasons to move on from your current account:
- You’re moving to a new city or state
- You can get better interest rates
- You’re switching to an online bank
- You qualify for a bank bonus offer
- You want to escape poor customer service
- You’re being charged expensive fees
- You can get better features and services elsewhere
- You’re opening a joint account
- You’re consolidating your bank accounts
- You’re switching from a child account to an adult account
Whatever the reason, consider the decision carefully to ensure you’re making the right moves for your financial situation.
How to Close a Bank Account
Closing a bank account involves more than contacting your bank. You’ll want to do some advance work to ensure a successful transition. The specifics for closing an account vary by bank and credit union. Be sure to check your banking institution for special requirements. Generally, follow the steps below.
1. Open a New Account
The first thing you need to do is open a new bank account. Having an account in place ensures you have a place to transfer direct deposits and payments or debits.
Many factors go into choosing a new bank, including savings rates, fees and account offerings. Whether you decide on a traditional brick-and-mortar bank or an online bank, ensure you’ve established your new account before moving forward.
2. Switch Your Existing Scheduled Payments and Deposits
If you have any direct deposits or automatic payments set up, move them to the new account. Check with your employer regarding any forms you need to fill out for direct deposit so your paycheck can be rerouted to the new account.
Do yourself a favor and make a list of your monthly recurring payments. This could include:
- Car payments
- Mortgage payments
- Insurance payments
- Student or personal loans
- Credit card payments
- Gym memberships
- Streaming services
- Utilities and other household bills
Having a list helps ensure you’ve canceled all of the payments attached to your old account, but you’ll also be prepared when you need to set them up for your new bank account.
3. Transfer Your Money
Before you move money out of your account, let outstanding transactions clear. Failure to do so could result in having to pay overdraft fees. If you still have money in the account after everything clears, withdraw the money or transfer it to your new account.
If your bank account has a minimum balance requirement, only transfer money out of the account when you’re ready to close it so that you’re not charged a monthly maintenance fee.
4. Contact Your Bank
Cancel your bank account. Many financial institutions allow you to do this online, but it could require a phone call to customer service or a visit to a local bank branch. Some banks and credit unions may require you to fill out an account closure request form or submit a written request. Follow your bank’s guidance on the proper contact method to start the closure process.
The bank will check your account to ensure it’s in good standing and that you’ve resolved any outstanding issues before it marks the account as closed. If there are any remaining funds in the account, you should be able to request a transfer to your new account or receive a check by mail.
5. If Required, Send a Letter to Close Your Bank Account
You can write a letter to your bank to close an account. To do so, you can use the template below or a similar format.
Date
To whom it may concern,
Please close the following bank account(s):
- List account name and account number for each closing request
Please send a check for any remaining funds in those accounts to the address below. Please follow up with written confirmation to verify the previously mentioned accounts have been closed.
Please contact me if you have any questions.
Thank you,
Signature
Full name (Printed)
Mailing address
Phone number
6. Get Written Confirmation
Don’t assume that the account is closed. The Consumer Financial Protection Bureau recommends getting written confirmation when you close a bank account. This protects you if the bank doesn’t follow through or some issue arises.
How to Close Certain Types of Bank Accounts
Not all account closures are handled the same. Other scenarios may pop up that require extra steps to close a bank account. Here’s a look at a few examples that might require extra attention.
Joint Account
Your bank may require an account closure request with both account holders’ signatures if you’re closing a joint account. Many banks, however, only require one account holder’s authorization. Canceling a joint account online could require both parties to request an account closure.
Child’s Account
Some bank accounts are automatically converted into regular accounts when a child turns 18. If you’re of your state’s legal age to take complete control of your custodial account, you can close the account the same as any other bank account.
Inactive Account
If your account has been marked “Inactive,” you’ll need to reactivate it before it can be closed by the bank. Contact your bank’s customer service to reactivate your bank account. There might also be an option to do this through your online or mobile banking.
Overdrawn Account
Having an overdrawn account could prevent you from closing an account. You’ll need to get your account to a zero balance or higher before the bank will process your closure request.
Deceased Person’s Account
Closing the bank account of a loved one who has passed away can be more complicated than closing other accounts. How the account is handled depends mainly on how the deceased structured their finances, including whether they listed a beneficiary or had a will. Requirements and documentation may depend on state law. Your best bet is to seek legal counsel before proceeding.
Can You Close a Bank Account Online?
Many banks allow you to close an account online. It’s especially common among online banks. Some enable you to close an account via online messaging or email. Others offer chat features that let you close an account through customer support.
Contact your bank to figure out options. Ensure your account is in good standing and has a zero balance before you try to close it.
How Much Does It Cost to Close a Bank Account?
Typically, it doesn’t cost anything to close a checking, savings or money market account. Time-deposit accounts, such as certificates of deposit (CDs), may issue a penalty. Most banks and credit unions charge an early withdrawal penalty if you close a CD account before its maturity date.
How Long Does It Take to Close a Bank Account?
Closing a bank account can be a quick process, especially if you’ve already transferred funds from the account and accounted for any lingering transactions. If you’ve already withdrawn or transferred funds to another account, the closing process may only take a few minutes.
Tips When Closing a Bank Account
If you’re planning on closing a bank account soon, here are a few extra tips that will benefit you in the long run:
- Open a new account first. Opening a new account ahead of time gives you a chance to transfer funds out of the old account. It also gives you a place to make transactions during the transition.
- Document everything. Closing a bank account should be smooth. But keep records of communication with bank staff and save communication from your bank.
- Destroy the remnants of your old account. Destroy any checkbooks or debit cards tied to your old account. This keeps them from getting lost, stolen or used accidentally.
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Bottom Line
If you need to close a bank account for any reason, you can speed up the process by following the steps above. Keep records of all transactions and correspondence with your bank to ensure that your account has been closed properly.
Frequently Asked Questions (FAQs)
Does closing a bank account hurt your credit?
Bank accounts are different from credit card accounts and aren’t part of your credit report. Closing a bank account doesn’t affect your credit score or history. Although financial institutions report account closures to ChexSystems, opting to close a bank account doesn’t impact your ChexSystems report.
How do you get money from a closed bank account?
If you close a bank account but still have funds in the account, you should receive a check from the bank for the remaining funds. If your local bank branch closes, you still have access to your account and funds at other bank branches or online. When a bank shuts down all of its operations, you can contact the FDIC directly to inquire about outstanding funds.
Can a bank close your account without notice?
Your bank account could be closed by your bank for many reasons, including inactivity or low usage. Banks aren’t required to give notice when they close an account. Consult your bank’s deposit account agreement for guidelines on when an account might be closed.
Can a closed bank account be reopened?
You can reopen a closed bank account in some instances, depending on your bank’s policies. If allowed, typically, you can do this by making a request either in person, by phone or online. If not, you can simply open a new account.
Can I close my bank account and open a new one with the same bank?
Yes, banks allow you to close one account and open another one. The process to close the old account is the same, although you’ll find your bank much happier to keep your business.
How long can my bank account be negative before it closes?
Typically, banks will keep accounts with negative balances open until they are brought up to a zero balance or higher. Bank policy dictates how accounts are handled. Your bank may close your bank account and report you to a debit bureau like ChexSystems, which could hurt your chances of opening another bank account.
How long do banks keep records of old accounts?
Banks are required to keep records of old checking and savings accounts for at least five years.
If my bank account is closed, what happens to my direct deposit?
If an employer sends direct deposit funds to a closed bank account, they are returned to the original sender. If this happens, contact the sender immediately with alternative account information so they can send the funds to a new account. You can avoid this by updating your direct deposit information with your employer.