Credit Card Closed But EMI Still Running? Here’s What Happens To Your Instalments And Reward Points

Mumbai: Closing a credit card may look simple, but an active EMI, unused reward points or pending refunds can complicate the process. Cardholders should check all outstanding obligations before submitting a closure request.

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Cancelling the card does not automatically cancel debt linked to it. The treatment of EMIs and other benefits depends on the lender’s terms and conditions.

What Happens To Your Active EMI?

An outstanding EMI remains payable even after a credit card is cancelled.

Cancelling the credit card does not necessarily lead to the cancellation of the pending EMI liability. The EMI will be payable as per the conditions of the EMI scheme irrespective of the closure of the card.

Depending on the lender, instalments may continue through an eNACH auto-debit mandate linked to the customer’s bank account.

Cardholders should confirm the repayment method with their issuer and maintain enough balance to avoid failed payments, late fees and possible damage to their credit score.

Could The Entire Amount Be Billed?

The pending EMI is treated as a due, and the remaining principal may be billed immediately. A foreclosure charge of around 3 per cent plus GST may also apply, he said.

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However, the process and charges vary across banks and EMI schemes. Customers should check the exact foreclosure amount before requesting closure.

What About Reward Points?

Unused reward points could be lost when the card is closed.

Binit said some programmes allow customers a limited period to redeem points after closure, while others may make them expire immediately. Redeeming available points beforehand can help prevent losing their value.

Don’t Forget Refunds And Auto-Payments

Cardholders should check pending refunds and disputes before closure. Refunds arriving after closure may require coordination with the issuer for transfer to a bank account.

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Recurring payments, including OTT subscriptions and insurance premiums, should also be shifted elsewhere.

Finally, customers should keep the last statement and card-closure confirmation as proof that the account has been closed.

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