Stories
Credit Card Closure Rules: Do Not Make This Mistake Or Face Heavy Debt
- •Closing a credit card does not automatically clear active EMIs, and paying the remaining outstanding amount remains mandatory.
- •Banks may recover remaining EMI amounts through internal policies, often auto-deducting future installments via eNACH.
- •Clearing all dues or paying foreclosure charges of approximately 3 percent plus GST may be required before card closure depending on the bank.
- •Accumulated reward points may expire once the card is closed, so checking redemption policies beforehand is essential.
- •Ensure any pending refunds or disputed transactions are resolved and credited to your bank account before closing the card.
Key Questions Answered
No, closing a credit card does not automatically relieve you of the responsibility of paying remaining EMIs or outstanding balances. Card cancellation and paying off EMI dues are two separate processes, and the repayment obligation continues until fully paid.
Once a credit card is closed, accumulated reward points may expire under many reward programs. While some issuers offer a limited period to redeem them post-closure, this depends entirely on the specific bank's policy.
The bank determines the recovery method based on internal policies, which may include automatic deductions via eNACH if the auto-debit facility is active. Alternatively, you may be required to clear all outstanding dues in a lump sum, which could include foreclosure charges.
