How to Dispose of Credit Cards

You can dispose of a plastic credit card by cutting it up and throwing it away, while you can return a metal credit card to the issuer by mail or at a branch. You should dispose of a credit card if you need to switch to a new card because your old card is damaged, about to expire or being updated by the issuer.

One other reason to dispose of your credit card is to remove temptation if you have the tendency to spend more than you can afford. Cutting up your credit card does not close the account, however. If you decide to close your account entirely, you should still cut up your card afterward to prevent fraudsters from getting any identifying information from it.

How to Dispose of Credit Cards

The best way to dispose of a credit card is usually just to cut it up and throw it out with your trash. Whether you’re cutting up your credit card because you received a replacement card or you’re doing so as a way to prevent yourself from overspending and racking up debt, the steps are the mostly the same. In the latter situation, though, you may want to contact your issuer first.

Call Your Credit Card Company

If you’re not replacing your card with new plastic, confirm that you can access your account with just your Social Security number and not your account number in case you forget your password. This will enable you to properly manage your account and avoid complicating your financial situation unnecessarily – not being able to make a payment, for example.

Of course, you can always write down your card information and store it in a safe place before cutting the card up to avoid this issue.

Cut Up Your Plastic Card

Cutting up a piece of plastic is pretty straightforward. You just need to make sure you’re working with the right tools.

• Scissors: Choose a heavy-duty pair, not something out of your elementary-age child’s pencil box.

• Shredder: This will likely only work with industrial shredders and shouldn’t be your first choice. Make sure you have a shredder that will be able to cut through not only the plastic of the card but also the metal chip. If your shredder can cut CDs, it should be able to get through your card’s chip.

When cutting up your card, make cuts strategically. Cut so that important pieces of identifying information, like your name, expiration date or security code, are split into multiple pieces. Make sure to cut through your card’s chip to render it useless, too.

Dispose of It With Other Trash

This is probably the only time we’ll recommend this, but you actually shouldn’t recycle your cut up credit card. We typically have fewer items in our recycling bins than our trash cans, making it easier for opportunistic fraudsters to cobble together the pieces. Besides, experts say the impact on the environment from thrown out credit cards is negligible compared to things like plastic bags.

If you want to be extra safe, consider putting half of the pieces of your card in your trash can on trash pickup day and leaving the other half in a trash can in your home for the next week. That way, any dumpster-diving fraudsters can’t easily piece your card back together.

How to Dispose of Metal Credit Cards

The best way to dispose of a metal credit card is simply to return it to the issuer. With metal credit cards, such as the Chase Sapphire Preferred® Card, the issuer may mail you a special slip into which you are supposed to insert your card and return it for safe disposal. This typically occurs when you are closing your account or requesting a replacement card, or if the issuer initiates the return.

Other Ways to Dispose of a Metal Card

Return it to a branch: If your issuer has branch locations, you should also be able to return your card for disposal at any branch.

Destroy it yourself: We don’t recommend this method as you’ll need something like metal snips or heavy-duty shears in order to get through the material. Make sure to wear gloves and eye protection, as the card fragments are likely to be very sharp.

If you simply wish to remove the temptation to spend, you won’t be able to return your card to the issuer, and you might not want to fully destroy your card. In such instances, you may want to try:

• Freezing your card: You can always put your card in a container filled with water and then freeze it. In case of a future financial emergency, you may want to have an icepick on hand!

• Burying it: Follow your dog’s lead (or the Sopranos) and just bury your credit card. As long as you do it in your own yard, the card is unlikely to be found by a third party. Just make sure to dig a deep enough hole to discourage you from going after the card for frivolous purchases.

• Locking it away: Putting your credit card in a safe (that perhaps only your spouse has the combination to) or a bank safe deposit box can effectively remove temptation and allows for the support of a peer as you combat overspending.

Why Should You Destroy Old Credit Cards?

Since banks deactivate old cards right away once you activate a replacement or close your account, you might wonder why you need to bother cutting up cards that can’t be used anymore. You should destroy old credit cards because they contain personal information, including:

• Your name
• The bank you own(ed) a credit card with
• Your old card number
• Your old expiration date
• Your old security code
• Your signature
• All of the info stored on your card’s chip

Even if fraudsters can’t use your card directly, they may be able to use any of this info to aid them in committing identity theft. Therefore, it’s best not to give them anything to work with. It only takes a minute of your time to destroy your card and give yourself an extra layer of safety.

What to Do After Getting Rid of Your Credit Card

If you disposed of your credit card because you received a replacement card, you should make sure everything is all set with the new card. That includes:

• Making sure your card is activated: You should have already activated your new card before cutting up the old one, but it doesn’t hurt to check that it works by making a small purchase.
• Signing the card: Sign the back of your new credit card if you haven’t done so already and there’s an area for it. It’s not technically required, but in some cases merchants may refuse your card if it’s not signed. Over time, signature panels are becoming less common, though.
• Updating recurring payments: If you got a replacement because your card expired, you should have the same card number, but you’ll need to update your details with the new expiration date and security code anywhere you have your card saved as a payment method. If you got a replacement card because your card was lost, stolen, or hit by fraud, you’ll have to update the card number as well.

If you cut up your card simply to avoid spending more, it’s important to remember that we are in the digital age. That means if you really want to hamstring your spending capabilities, you’ll need to remove all saved credit card information from your favorite websites as well as clear your browsing history – just to be safe.

Finally, if you cut up your card because you closed your credit card account, you’ll still have to update any recurring transactions with an alternate payment method.

Cutting Up vs. Canceling a Credit Card

The first decision you need to make when it comes to cutting up and disposing of credit cards is whether or not you wish to actually close your account, as opposed to cutting up your card to remove spending temptation. We’ll lay out the pros and cons of each below.

Pros & Cons of Cutting Up a Credit Card

Pros

• Stops overspending: Without your plastic, you’ll likely find it much tougher to spend beyond your means. ATM withdrawals and cash purchases are harder to swallow because you can only use what’s in your bank account.
• Credit score benefits: Your credit card will continue reporting to the major credit bureaus on a monthly basis. It will also report positive information (as long as you continue making on-time payments on any existing balances), as not using your card still counts as responsible use.
• Easy to reverse: You can call your credit card issuer and request new plastic whenever you feel you’re ready. Replacement cards are typically free, too.

Cons

• May forget account number: Not knowing your card number off the top of your head can make emergency purchases even more difficult. It can also make it harder for you to request account records.
• Forgotten fees: With your card in pieces, you may forget about any annual fees it may have, resulting in a balance, missed payments and interest.
• No rewards: Cash purchases, unfortunately, produce no rewards (except in rare cases with certain debit cards). Put this in perspective, though. Continuing in your overspending ways will cost you a lot more than you would ever recoup in the form of rewards. Nevertheless, you’ll be effectively subsidizing the purchases of credit card users by paying exclusively with cash.

Pros & Cons of Cancelling a Credit Card

Pros

• Stops overspending: Not having an active credit card will prevent future spending problems.
• Save on fees & interest: If your credit card charges an annual fee or you routinely carry a balance, you will save money as a result of cancelling your card.

Cons

• No credit score benefit: Credit cards report information to the major credit bureaus every month, even when they’re in pieces. Closing your account will make it harder to improve your credit score and will effectively emphasize any negative information in your credit reports.
• Hurts credit utilization ratio: By closing your credit card account, you will be reducing the amount of available credit you have at your disposal, thereby increasing your overall credit utilization ratio.
• May shorten average account age: The average age of your open accounts and the age of your oldest account are both important factors in your credit score. If you’ve had your card for a long time, closing it can effectively shorten your credit history and cause a drop in your score.
• Less spending power: While less spending power does mitigate debt potential, it also means you may lack the financial firepower to deal with monetary emergencies.
• No rewards: A canceled credit card produces no rewards. You will also most likely lose the rewards you’ve earned but not redeemed when you close the account.

At the end of the day, it’s clear that the best strategy is to cut up your credit card while keeping your account open. This enables you to remove spending temptation while also retaining monthly credit-building benefits. The only time this is not advisable is if your card charges an annual fee. In that case, we recommend closing the card charging the fee and then opening a credit card with no annual fee that you immediately proceed to cut up.

It’s also important to understand that cutting up or canceling your credit card should be but one component of a larger plan to improve your financial performance. In order to see real results, you’ll also need to make a list of your monthly expenses, ranked in terms of importance, and then eliminate all discretionary spending until you are saving enough on a monthly basis to build an emergency fund, pay off your debts in a reasonable period of time and, ultimately, maximize retirement contributions. What results will be your budget.

To learn more about debt repayment strategies, check out our guides on the Best Way to Pay Off Debt and How to Stay Out of Debt.