Can I freeze my credit card?

How to cancel or freeze your credit card to get your finances under control.

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By

Emily Herring

Reviewed by

Izzy Thomas

Updated

Fact checked

Overview

There are a few reasons why you might want to freeze your credit card. If your credit card is lost or stolen or used for a fraudulent transaction, freezing your card could help protect your finances. Another reason you might want to freeze your card is if you’re trying to curb your spending if you’re in debt.

How to freeze a credit card

For lost or stolen cards

If your card has been lost or stolen, or you suspect it has been used to make a fraudulent transaction, you should contact your credit card issuer immediately. Be prepared to give as much information about your account as possible and to answer a list of questions to verify your identity.

If your card has been used fraudulently, your provider should refund you for any transactions that take place after your card is reported missing. If you didn’t realise your card was stolen for a number of days, you still should be able to get your money back.

However, you could be liable for the first £50 of any sum spent in transactions before you reported your card was stolen. Some providers may waive these fee so it’s worth checking the terms and conditions of your card.

Pros and cons of credit cards

For getting out of debt

If you’re struggling to repay a growing debt or want to curb your temptation to spend on plastic to get your finances under control, you can contact your card issuer to freeze your access to your funds. You might need to provide some information about your account, including how long you’d like your account frozen for; it will not allow you to unfreeze the account until that date. Once the account is frozen, you can spend time making repayments to pay down your debt without the temptation to keep spending. Not only will this help get you out of debt, it’ll also help improve your credit score as your debt-to-income ratio starts to decrease.

If you’re having trouble paying down your debt because of high interest rates, you can also consider a 0% balance transfer credit card. You can use this type of card to transfer your balance to the new card with a 0% interest rate on balance transfers for a promotional period. This will mean you can repay your debt without the burden of interest while the promotion is in place. It’s important to be aware that these cards can sometimes come with fees.

Everything you need to know about debt

Cancel your credit card

If you’ve repaid all of your debts and want to avoid spending on plastic, you can also cancel your credit card. Once you’ve paid any outstanding balances, make sure you transfer or redeem any points if it’s a rewards card, and move any regular payments to another account to ensure your bills are still being paid. You can then contact your bank over the phone or in writing to request a credit card closure. Be mindful that you might be put through to a customer service representative whose job it is to try and convince you to keep the account open. However, if you’re determined to keep your finances in control, remain firm on your decision and insist that you’d prefer that the account is closed. Once the provider has confirmed that the account is cancelled, check any future statements to ensure that the account is well and truly closed and you aren’t being charged any maintenance fees.

Be aware, cancelling your credit card could affect your credit score, but that depends on your lender. Credit reference agencies determine your creditworthiness by looking at your payment history and the age of your credit. But they also look at how much credit is available to you compared with how much you’re using – known as a credit utilisation ratio. Credit utilisation is the percentage you use of your credit limit. For example, if you have an overall credit limit of £3,000 and you use £1,500 of it, your credit utilisation is 50%. But if you cancel a card and your total limit is reduced to £2,250, you’ll be using 75% of it. Closing a card with a high spending limit and £0 balance can temporarily increase your ratio, resulting in potential creditors seeing you as a higher risk. In general, lenders like to see a credit utilisation ratio below 25% after you’ve cancelled your credit card. If you’re looking to get control of your finances, it may help you to keep your £0 balance card open and just stop using it. Just make sure there are no annual or dormancy fees.

Bottom line

If your credit card is lost or stolen, you want to freeze your card to get out of debt, or you want to cancel your credit card, you should first contact your card issuer.

As there are a few different reasons as to why you might want to freeze or cancel your credit card, the right strategy to use will largely depend on your situation and financial goal. Regardless of whether you decide to freeze your card, transfer its balance or cancel your credit card altogether, make sure you do some research beforehand to determine which option is best for you.

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