Would it help you to save on interest and fees if you got rid of a credit card? Whatever your reason for canceling a credit card, you will want to make sure your credit score is not damaged. Prepare to meet certain obstacles. Credit card issuers won't exactly be happy about it.

The first thing to do is to make sure that your credit card balance is zero. You may also close the account while it still has a balance, although you will still have to pay off the balance. Otherwise, make sure to stop using the card while you are paying it off. A lot of people find this step hard, so try to employ as much self-control as possible.

Next, call your card issuer. Confirm that the balance is zero and tell the representative that you are canceling the card. Be persistent - don't let the customer service spokesperson change your mind. They will try to talk you out of it by promising lower rates.

Thirdly, write a letter to card issuer. Apart from any information that is required by the card issuer, make sure to state that you want your credit report to reflect the fact that you have requested your account to be closed. You do not have to provide any reason for that. It's your right not to do any business with them. A wise thing to do here is to hand-in the letter personally. This way, you are sure that the card issuer has received the letter.

The final thing to do in this process is to check your credit report. Make sure that it doesn't say that your account has been closed by the creditor. This will reflect negatively on your score. In case there has been a mistake, contact your card issuer and follow up with another letter. Continue contacting your card issuer until your credit report clearly states that it was you who asked to close the account and not the credit company.

Another pitfall concerned with credit card cancellations is credit utilization ratio. Let's say you have 3 credit cards with 30'000 limit spread among them. Your current total balance on all cards is 3'000. This means that you have a credit utilization ratio of 10 percent. But if you cancel one of those cards, bringing your aggregate limit to 15'000, the ratio increases to 20 percent.

While we are on the subject, a credit card issuer may close your account even if you have been making all payments on time. It's up to the company to decide whether it's profitable to run the business.

Moreover, removing credit card accounts that don't have negative items isn't going to do you any good either. Such cards are useful when building credit history, especially if the card has been with you for some time.

If you are having a bad time keeping your spending managed, canceling a credit card might sometimes be much more important than your credit score. However, if you are not willing to damage your score, you may be willing to reduce your credit line. The card issuer will do this at your request.

Besides, narrowing down the number of credit cards allows for simple tracking of your funds. It gives you an overall sense of your balance. Large number of cards can result in excessive spending and difficulties paying off the debt.

Even though closed credit accounts can negatively reflect your credit score, certain card issuers are no longer taking this factor into consideration. They assume that in today's world of credit card deals, a customer may be willing to cancel a few cards to get another one with better rates.

In any case, whether you are canceling or applying for a credit card, it's a good practice to get a copy of your credit report. With so many cases of identity theft cases around, you may not always be aware of a change in your credit score.