Credit Card Companies Closing Accounts

Have you had a credit card company notify you they were cancelling or closing an account you had with them?

Many card issuers are doing just that. Credit-card companies lose money on dormant accounts, and as they feel the economic pinch, they’re more apt to close them. Unfortunately, closing a credit card account can lower your credit score. The length of time your accounts have been open is the third most heavily weighed factor in your FICO score (after timeliness of payments and the amount you owe). Plus, eliminating a card reduces your available credit, which could also lower your score.

Some card companies will consider reopening inactive accounts, especially if the account was recently closed and the customer had been with the bank for a long time.

Tip: If you have a lot of other cards and a credit score of 720 or higher, one closure won’t have much effect on your score. But if you have a slim credit history and few cards, it’s wise to make sure your oldest accounts stay active. So use your card at least once every three or four months. Then be sure to pay it off every month so you’re not racking up big interest charges.

What about you? Have you had a card canceled by your credit card company? Tell us about it. Were you able to get them to change their tune? Use the comment link below to sound off. Your email address will NOT be revealed when your comment is published here.