Stories
Cancelled Credit Card? Your EMI and Rewards Might Still Be Active!
- •Closing a credit card does not automatically cancel outstanding EMIs or other dues; customers must repay as per the EMI scheme.
- •Unused reward points may lapse upon card closure, depending on the issuer's rewards policy.
- •Lenders may set up eNACH mandates for continued EMI auto-debit even after card closure, requiring customers to maintain sufficient bank balance.
- •Banks often require all dues, including pending EMIs, to be cleared before full card closure, potentially billing the remaining principal at once with foreclosure charges.
- •Customers should redeem reward points, check for pending refunds, and move recurring payments before closing a credit card to avoid issues.
Key Questions Answered
Closing a credit card does not automatically cancel any running EMIs linked to it, and your repayment obligation will continue as per the scheme conditions. Lenders may collect the remaining instalments via auto-debit mandates or bill the entire remaining principal at once with foreclosure charges.
Yes, unused reward points may lapse or be forfeited once you close your credit card, depending on the issuer's rewards policy. Experts advise checking the policy and redeeming or using accumulated points before requesting an account closure.
Closing a credit card reduces your overall credit limit, which can increase your credit utilization ratio and negatively impact your credit score. Shutting down your oldest credit account is considered the most harmful since it removes a long-standing positive repayment history.
