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Can I freeze my credit card?

Information verified correct on December 11th, 2016

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

There are a few reasons as to 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 relieve yourself from debt. This guide will go through the steps you need to take to freeze your credit card and get a handle on your finances.

How to freeze a credit card

For lost or stolen cards

If your card has been lost, 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 them 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, you shouldn't be liable for these costs. Instead, you'll usually be covered by a no liability agreement such as Mastercard's Zero Liability Agreement and Visa's Zero Liability Policy. For a full list of the contact details you'll need to contact any of the major Australian banks, please see our guide on what to do if your credit card has been stolen.

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 in 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 and they 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. For further information, see our guide to reducing your credit card debts.

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 to transfer or redeem any points if it's a rewards card and move any direct debits 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 they've 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. See our guide on how to cancel a credit card for more tips on closing your account without hurting your credit score.

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

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