The advent of credit card has made life a little bit easy for individuals. Unlike a debit card, the money associated with credit card transactions is borrowed from the card issuer or bank to be paid back at the end of the month. In simple terms, it means that if you make a purchase using your credit card, the card issuer will be responsible for the charges and not you. Credit cardholders can close their credit card for urgent and specific reasons. If you are a credit cardholder, you may want to know if cancelling your credit card will end an awaiting payment.
Cancelling a credit card will not stop a pending payment. If you end up cancelling a credit card that has a pending payment, you will still be responsible for the charges when they finally post.
When you make a purchase using your credit card, the money associated with the transaction doesn’t automatically post to the merchant’s account. Instead, it is held until the merchant does the necessary checks and approval. After a few days (usually around 5 days), the funds will post to the merchant’s account. If, for instance, you have an awaiting payment on your credit card, and you end up cancelling it, what will happen to the awaiting charge? Will it disappear? In this article, I’ll provide you with an answer to that question.
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If You Cancel Your Credit Card, Will It Stop a Pending Payment?
Pending charges on a credit card are prevalent; often, when you use your credit card to purchase a product at the mall, boutique or what have you, it may take some days for the transaction to post ( be complete). This simply means that the charge you made is awaiting authorization from the credit card issuer, leaving it in the “pending charges” limbo. Such authorization is usually replaced with the completed transaction amount within a few days, and your card is charged.
If peradventure, you have awaiting charges from a transaction you made, and you want to close your credit card, the issuer may not allow you to close the card. If the issuer ends up closing the card either on its own or on your request, you will still be liable for the charges. There is no escaping from credit card charges!
Understating What a Pending Charge Is:
A pending charge is an authorization of a purchase requested by a merchant to ensure that you have an active account and that the money in your account is enough to cover the purchase. Pending charges affect your available balance. However, they are not final until the merchant accepts the transaction. While in its pending state, the amount of the authorization may be modified.
Below are examples of when a charge will be pending:
- Restaurants: when a tip is being included to your authorization
- Gas Stations: a pay-at-the-pump service center charging a little authorization
- Travel: a hotel or car rental agency approving an estimated amount for incidentals
Generally, it takes a pending charge about 5 days to clear off. However, it could be longer as there are several factors that affect how long the charge can appear on your credit card. These factors include: when you made the transaction and how it takes for the merchant to process it.
Card pre-authorization may also be displayed on your account for longer. If you use your credit card to book a hotel, the hold may last 24 hours after check-out.
Cancelling a Credit Card:
Cancelling a credit card can damage your credit score. However, there are safe ways to go about it without hurting your credit score.
Good reasons why you may want to close your credit card are:
- Separation or divorce
- High annual fees
- Too much temptation
If you want to close your credit card, ensure you speak with an expert before you do so. Canceling your credit card without seeking the advice of an expert may ruin your credit score. I bet that is not something you would like. So, please do the needful, so you don’t end up regretting it.
Having known the repercussions surrounding cancelling a credit card, I think it’s high time we revisited the main reason for this article. If you close your credit card, will it stop an awaiting payment?
You see, the answer is a big no. If it were possible to end a pending payment by canceling our credit card, I bet we would see many people close their credit card each day. Sometimes, you may not be allowed to close your credit card if it has an awaiting charge. In fact, most credit card issuer wouldn’t allow you to voluntarily close your account if you have awaiting charges. However, if you default in your payment, the credit card issuer may close your credit card independently.
Mind you, even if you are allowed to close the credit card, or if the issuer closes it, you are still responsible for any charges made to the card, irrespective of when those charges finally post. Therefore, as long as your account has a balance, you will keep receiving statements and be required to settle the balance.
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What Happens If You Cancel a Credit Card With a Pending Transaction?
Cancelling a credit card is bad for your credit score. Thus, it is advised that you don’t close your credit card even if you aren’t using it. However, some urgent situations may warrant that you shut your credit card. If you end up in one of these unfortunate situations and you eventually close your credit card (one that has an awaiting transaction), what will happen? Will the transaction post? Or will it be cancelled?
If you cancel a credit card with a pending transaction, you will be liable for the charges when the transaction posts eventually. It doesn’t matter who canceled the credit card, be it you or the card issuer. When the transaction post, you will be liable for it.
You cannot escape from an awaiting charge by canceling your credit card. If you wish to cancel an awaiting charge, contact the merchant or the card issuer if the merchant is not responding rather than closing your credit card.
