The new year marks the beginning of new possibilities and opportunities. But what if I told you that those plastic cards in your wallet are quietly stealing your hard-earned money? This new year, let’s talk about the real cost of credit cards and learn how to close credit card. It might be your best financial decision in years.
The Silent Money Eater in Your Wallet
Credit cards promise convenience and rewards. But behind the flashy cashback offers lies a trap that millions fall into every year. Let’s understand how these cards drain your finances without you even realizing it.
The Hidden Costs That Add Up
Most people think they’re smart credit card users. They believe they’ll pay on time and avoid charges. Reality tells a different story.
Annual fees are just the beginning. Even cards marketed as “free” often come with renewal charges after the first year. Multiply this by three or four cards, and you’re paying thousands annually for the privilege of spending your own money.
Interest charges are the real killer. Miss one payment deadline, and you’re hit with interest rates between 36% to 42% per year. That’s higher than most personal loans. Even a small outstanding amount of Rs 10,000 can cost you Rs 3,600 in interest charges annually.
But the damage goes deeper.
Also Read: Best Savings Account Interest Rates 2025: Govt and Private Bank ComparisonA Real Example: Rajesh’s Credit Card Trap
Rajesh, a 32-year-old marketing professional from Mumbai, had four credit cards. He thought he was being smart by maximizing rewards across different cards.
His monthly credit card usage looked like this:
- Card 1: Rs 15,000 (groceries and fuel)
- Card 2: Rs 20,000 (online shopping)
- Card 3: Rs 12,000 (dining and entertainment)
- Card 4: Rs 8,000 (miscellaneous)
Total monthly spending: Rs 55,000
Rajesh earned Rs 1.2 lakh per month. He always planned to pay his bills on time. But managing four different due dates became overwhelming. He missed payments twice in six months.
The damage:
- Late payment fees: Rs 2,400 (Rs 600 per card, twice)
- Interest charges on unpaid amounts: Rs 4,500
- Annual fees for four cards: Rs 3,000
- GST on all fees and charges: Rs 1,800
- Total annual loss: Rs 11,700
And this doesn’t include the mental stress of tracking multiple statements, due dates, and reward points that eventually expired unused.
The rewards he earned? Approximately Rs 6,600 worth of cashback annually. His net loss: Rs 5,100 plus countless hours of stress.
Why You Don’t Need Multiple Credit Cards
The credit card industry thrives on one simple truth: more cards mean more chances to spend impulsively and more opportunities for you to make mistakes. This is why it is important to know how to close credit card.
The Psychological Trap
Credit cards disconnect you from real money. When you swipe a card, your brain doesn’t register the pain of payment like it does with cash. Studies show people spend 12% to 18% more when using credit cards compared to cash or debit cards.
With multiple cards, this effect multiplies. You lose track of your actual spending. Each card feels like a separate pool of money, not part of your overall budget. Get out of this trap and learn how to close credit card.
The Tracking Nightmare
Managing one credit card requires discipline. Managing three or four becomes a part-time job:
- Multiple bill payment dates
- Different reward structures to remember
- Various credit utilization ratios to maintain
- Several statements to review
- Multiple customer service numbers to call
Is this complexity worth the marginal extra rewards?
Also Read: Looking for Monthly Income? Try Post Office Monthly Income Scheme (Calculator Inside)Why One Credit Card Is More Than Enough
If you absolutely must have a credit card, one is sufficient. Here’s why:
Simplified tracking: One due date, one statement, one set of reward rules. Your financial life becomes instantly clearer.
Better credit utilization: Instead of small balances across multiple cards, you can focus on maintaining healthy usage on one card, which actually improves your credit score more effectively.
Easier rewards redemption: You accumulate points faster on one card rather than scattering them across multiple cards where they often expire unused.
Single annual fee: Why pay fees for four cards when one serves the purpose?
Most importantly, having just one card acts as a natural spending limit. You think twice before maxing it out.
The Debit Card Advantage: Your Real Financial Friend
Let’s be honest: do you really need a credit card at all? Debit cards offer almost everything credit cards do, with none of the downsides.
Debit Cards Keep You Grounded
With a debit card, you can only spend what you have. This single feature prevents overspending, debt accumulation, and financial stress. You develop better money habits because every transaction reflects immediately in your account.
No Interest, No Fees, No Traps
Debit cards don’t charge interest because you’re spending your own money. Most banks offer free debit cards or charge minimal annual fees. There are no late payment charges, no minimum payment confusions, no revolving credit nightmares.
You Still Get Convenience
Modern debit cards offer:
- Online shopping capabilities
- Contactless payments
- International transactions
- EMI options at point of sale
- Reward programs (yes, many debit cards now offer cashback)
- UPI integration for instant payments
The difference? You’re not borrowing money at exorbitant rates to get these features.
Building Real Wealth
The money you save on credit card fees and interest can be invested. Even Rs 10,000 saved annually, when invested in a mutual fund earning 12% returns, grows to Rs 3.5 lakhs in 20 years. Credit cards don’t build wealth. They build debt.
Also Read: Best Large Cap Mutual Funds to Invest in 2025How to Close Credit Card in Simple Steps
Ready to free yourself from credit card stress this New year? Here’s your straightforward guide on how to close credit card accounts properly.
Step 1: Clear All Outstanding Dues
Before initiating closure, pay off your entire credit card balance. Check your latest statement and add a buffer amount to cover any pending transactions or interest charges.
Step 2: Redeem Rewards Points
Don’t let your accumulated rewards go to waste. Log in to your credit card portal and redeem all available points before closing the account.
Step 3: Remove Linked Auto-Payments
Cancel all automatic payments, EMI plans, and recurring subscriptions linked to your credit card. Transfer them to your debit card or set up alternative payment methods.
Step 4: Call Customer Care
Contact your credit card’s customer service number. Clearly state that I want to close your credit card account permanently and tell me the way how to close credit card once and for all. Don’t let them convince you with retention offers unless genuinely valuable.
Step 5: Send Written Confirmation
Email a formal closure request to your credit card company. Keep the email simple:
“I request the permanent closure of my credit card number ending with [last 4 digits]. All dues have been cleared. Please confirm closure and send written confirmation.”
Step 6: Destroy Your Card
Once you receive closure confirmation (usually within 7-10 days), cut your credit card into pieces, ensuring the chip and magnetic strip are destroyed.
Step 7: Verify Closure
After 30-45 days, check your credit report to ensure the card shows as “closed by customer.” This protects your credit score.
Your New Year’s Resolution
True prosperity comes not from spending power, but from financial wisdom and freedom.
This new year, gift yourself financial peace. Evaluate your credit cards honestly. Close the unnecessary ones using the steps on how to close credit card accounts we’ve outlined above. If possible, transition completely to debit cards.
The money you save on fees and interest is real wealth. The stress you eliminate is priceless. The financial discipline you build is your true asset. Your future self will thank you for this decision. Make this new year the beginning of your debt-free, financially peaceful life.
The answer to how to close credit card lies in this: Real wealth isn’t about how much you can borrow. It’s about how wisely you manage what you have.
Learn more about Money management through ‘Rich Dad, Poor Dad’ by Robert Kiyosaki.
Also Read: 10 Best Platforms to Sell Furniture Online (& Earn Money)
