How to safely dispose of an old credit card

By Benjamin Salisbury

If you have an old credit card that you no longer use, make sure you get rid of it the right way. After all, a credit card is not like normal rubbish, you can't simply throw it into the bin where anyone could recover it.

Fraud figures from the UK Cards Association show that in 2014 there were almost 134,000 cases of fraud on lost or stolen UK-issued cards, totalling £60 million in losses.

"If you have a credit card that you no longer wish to use, it's a good idea to contact the card company and close the account," Richard Koch, head of policy at The UK Cards Association said in an emailed response to questions. "You should then cut up the card and dispose of it securely. By cancelling your card, you will ensure that no one else can use it, protecting yourself from any potentially fraudulent activity."dispose-card

Here are some simple guidelines to safely get rid of an old or expired credit card:

Pay off the balance, then inform the issuer
First, pay off the balance on the card. You won't be able to close the account if there is a balance. You can still destroy the card, of course, but simply destroying the card does not close the account. If you fail to close the account, you could end up with inactivity fees, plus it leaves you more susceptible to fraud because you won't be paying as close attention to the account.

Then, tell your credit card provider that you would like to close your credit card account. This ensures that financial companies and credit rating agencies have the correct and current financial information about you.

The card provider will then close the record attached to the card. This will reduce the amount of credit that agencies believe you have access to, which will have implications for your credit score.

"For each card, tell the provider that you wish to close the account and get them to confirm in writing once this has been done," James Jones, head of consumer affairs at Experian, said in an emailed response to questions. "You should also make a note to check your credit report around six weeks later just to make sure the record of the card has been updated to ‘settled'."

Keep an eye out for signs of fraud, such as: unexpected call charges on your mobile phone bill, delivery of expensive new electrical equipment that you haven't ordered or paid for, a surprise post, letter or phone call from a debt collector or bailiff, or a court summons.

Ways to destroy your card
Here are five ways you can ensure your card is useless to anyone once you throw it out, according to Koch and the UK Cards Association:

  1. Cut it up.
    Use a pair of scissors to cut up the card carefully. Don't just cut it in half; cut it into separate strips, focusing on the stripe on the back, which contains your personal data.  Ideally, you should cut up each block of four numbers into two bits and then cut the signature, magnetic stripe and security code into very small pieces.

  2. Demagnetise it.
    Run a magnet along the magnetic stripe for about a minute to demagnetise the card. The stripe contains all of your personal data; demagnetising it makes your credit card unusable. However, this requires a particularly strong magnet.

    "Cards are resistant to magnetic interference, so it would need to be a strong magnet to demagnetise the stripe, and that might not include a fridge one," said Koch.

    If you cut up the card, you shouldn't need to demagnetise it; doing so is just an extra step you can take before you cut it up if you want to be extra cautious.

  3. Smash the chip.
    If you are unable to cut up the card to destroy the chip, you could smash the chip into small pieces using a hammer. The embedded chip contains sensitive cardholder data, so it is important to destroy the chip as well as the magnetic strip.

  4. Destroy related documents.
    After destroying the card, shred related documents with a cross-cutting shredder to avoid leaving behind a paper trail. Your credit card statements and other documents contain valuable information, too.

  5. Discard carefully.
    Pay attention to how and where you put the plastic credit card shards and shredded documents. Don't put everything in the same bag, split it into separate bags or even toss different pieces on different collection days.

Use common sense and be aware of behaviour that reduces fraud prevention. By following these steps to destroy unused or expired credit cards, you can greatly reduce the likelihood of fraudsters or identity thieves getting hold of your personal information.

See related: How to cancel a credit card, Keep only the cards you need

Published: 3 August 2016