Opening your mailbox to find another pre-approved credit card offer can be tempting. The promotional low-interest rate or enticing reward points may convince you to fill out an application on the spot.
But what if you have a change of heart shortly after applying? Or you may realize you can't responsibly manage another credit card right now. An important question comes to your mind, Can I cancel a credit card I just applied for?
The good news is that you can cancel it quickly; otherwise, it may have downfalls. Continue reading to learn more about how to cancel it.
Can You Cancel a Credit Card After Applying?
Yes, it is usually possible to cancel a credit card within 30 days of opening the account. To cancel, call the card issuer and request closure.
Be aware this may negatively impact your credit score in the short term and cause you to forfeit any sign-up bonuses or rewards you earned.
Cancellation should be a last resort if the card no longer fits your needs, as doing so can hurt your standing with the issuer.
How To Cancel The Application?
If you have a change of heart after applying for a new credit card, you can request to cancel it as long as the card has yet to be issued.
The fastest way is to call the bank's application status line or customer service number and explicitly state you want to withdraw the application and cancel it. Ask the representative to confirm your cancellation in writing by providing a letter, email, or other documentation for your records.
Follow up and verify the application shows as canceled in the bank's systems. Then check your credit report to confirm no account was opened. Acting quickly gives you the best shot at canceling successfully before the card is produced and the account is opened.
While a canceled application will still result in a hard credit check, this is better than having an unwanted credit card you must close immediately.
Does Withdrawing A Credit Card Application Have Impacts On Credit Score?
Canceling the recently submitted application for your new credit card or closing a newly obtained card account can impact your credit score, though usually temporarily.
When you first apply for a card, the issuer's hard inquiry may slightly lower your score. Even if you withdraw the application, this inquiry stays on your report for up to two years.
If approved, a new card raises your total available credit, which helps lower your credit utilization ratio if you keep balances low. But if you close the account, your overall credit limit decreases, potentially increasing the ratio and lowering your score.
Impacts Of Canceling A Credit Card Application
Closing a credit card account may sometimes be the right money move. But it can have a few potential downsides to be aware of:
Hard Inquiry on Credit Report
When you submitted the credit card application, the bank performed a hard credit check to check your credit history. This inquiry will continue to appear on your report even if you close the account soon after opening it. The hard inquiry could slightly impact your credit score for up to one year.
Impact on Relationship with Issuer
Frequently closing accounts with a bank may damage your relationship with them. If you think you may want to open another product with them, closing a new card too fast could jeopardize that.
May Not Qualify for the Same Offer Again
If you cancel a card shortly after opening, you may need to wait sometime before that issuer will approve you for the same or similar card again right away. Each bank has its guidelines.
The main takeaway is that while closing a credit card is often fine, doing so quickly after opening it can minimally impact your credit, standing with the bank, and ability to obtain the same card again soon.
What If You Can’t Cancel A Credit Card You Applied For?
Being stuck with a credit card you don't want can be frustrating. However, if the issuer doesn't allow you to cancel the application, you still have some options to minimize negative impacts.
Accept Delivery But Don't Activate
If your unwanted credit card application is approved, the issuer will mail the physical card. You can accept delivery of the card when it arrives but refrain from calling the number on the back to activate it.
No activation also means you won't risk raising fees or interest charges on the card.
Use the Card Minimally
If you went ahead and activated the credit card, proceed to use it sparingly. Put a small recurring charge on it, like a monthly subscription. Pay off the balance each month to avoid finance charges.
This builds a minimal but active history with the account. It pleases the issuer by showing you are using their product. It prevents the credit score impacts of rapid closure while generating little cost to you.
Apply for a Different Card
Rather than accepting an unwanted credit account, apply for a card at a different issuer that better suits your needs. This gives you a new revolving account on your credit report to help compensate for being unable to withdraw the initial application.
Research thoroughly and only apply for a card you are confident you want. Be strategic - seek a card with benefits that offset the loss of perks from the card you're stuck with.
Conclusion
Applying for a credit card is an important financial decision that should not be made lightly or impulsively. While it is often possible to withdraw your application if you quickly change your mind, doing so is not without consequences.
A canceled application will still generate a hard inquiry on your credit file that can mildly impact your score for up to a year. Before submitting any application, thoroughly research your options and ensure the card aligns with your spending needs and financial goals.
