Maybe you are switching banks, maybe you no longer need the account, or maybe things just aren’t working out with your current bank. There are many reasons as to why you might make the decision to close your bank account. While opening an account may have been quite easy, unfortunately closing your account will probably be a bit more difficult than anticipated.
The closure process is different with each bank. Some banks will accept secure messages from their online portals, others will require a phone call to prove you are the account holder and ask you an endless amount of questions to try to get you to stay, and some banks even require you to physically go into the location to get the account closed.
Wells Fargo, for example, has a few options available to customers. You can choose from the following: completing their “Account Closure or Partial Withdrawal Request Form” and then mailing it back requesting a Cashier’s check. You can go into the branch in person and request to switch banks and have them wire the money to your new bank. You can also send them an email to request account closure, then they will give you a call.
Open a New Account First
The first thing you want to do before closing an account at your old bank is to open an account at a new bank. Having a checking account at another financial institution is extremely helpful and will make closing your account a lot easier because the money can simply be wired to your new account.
Pay Your Owed Balance
Remember that if your account is overdrawn, you won’t be able to close your account until you pay the bank the amount you over-drafted by plus the penalty fee. It’s also important to request a confirmation letter in the mail stating that you paid off your balance and the account has been closed. It’s essential to have your own paper trail in case they try to claim that you still owe them money. For extra security, once the account is closed make sure that you shred all of your checkbooks and dispose of your credit or debit cards previously associated with this account.
Be Prepared to Be Without Checks and a Debit Card For a Few Days
When you open a new account, it will take them a few days up to a few weeks to send you a new checkbook and debit card. Because of this, it’s important you carry around cash with you during this period of time so you can still pay for you basic needs such as groceries and transportation.
Change Your Automatic Bill Payments
If you have been paying bills with auto-pay, or if you have any services that are set up on auto-pay with your old bank account, you will need to change the information to your new account. If you fail to change the information in time, the payments won’t go through which usually results in a penalty fee. So if you forget to change your auto payments, this could end up costing you a lot of money.
What About My Credit Score?
One question we often get asked is whether or not credit score will be affected by closing a checking account. The answer to this question is no… with one condition.
That condition is that when closing the account, you do not have any outstanding fees and the bank account is not overdrawn. In this case, there is no negative impact on your credit score.
With that said, if you had a line of credit (such as a credit card) with that bank and cancelled the credit card along with the checking account, it could have a negative impact on your credit score because you are lowering your overall credit limit which will automatically increase your credit utilization percentage.
In the end, closing a bank account can end up being a lot easier or a lot more difficult than you anticipated. If you just walk in and request cancellation, things might end up being difficult. However, if you first open up a checking account with a new bank, pay off any balance owed to your old bank, change your automatic payments, and are prepared to live with just cash for a few days or weeks, closing an account and switching banks will be a breeze.