There are several reasons for a Credit Card Account cancellation. Before one closes his or her account there must be a tangible reason for doing so. Once you have made up your mind on the account closure, contact your credit card issuers. They are in the right position to close your credit card account. You may not get a warning or any notification on your credit card cancellation. Only realizes it is closed at the register. If you are imagining the reason for the credit card to be canceled here are a few possible reasons for such actions.
You stopped Making monthly Payments.
Generally, you are to make regular monthly payments of your credit card. While your credit card won’t be canceled after just one missed payments, but a more serious defaulting can lead to more greater problems.
Most credit card issuers will go ahead to suspend your charging privileges if you’re up to 60 or 90 days, past your due date and allow you start charging again you update your payment. However, your credit card issuer will be charged off and closed completely after 180 days or six months of non-payment.
Your Credit Score become Low
Under the Credit CARD Act of 2009 banned universal default. The practice where a credit card issuer would increase cardholders interest rate due to late payment with another credit card issuer. While creditors can’t increase your interest rate because of late payments on another account, unless the account us with that same credit card issuers. Such an account can be closed completely. However, if your credit score starts declining because you’re not lodging in your payment on time, your credit card issuers may close contemplating on closing your account
You stopped Using your Card
Credit card issuers are not permitted to charge any dormant or inactive fee to cardholders, for not using their credit cards for several months. While some card issuers charge an annual fee that can be waived if you use your credit card. Others skip the fee and totally cancel the credit card If you stop using the card.
Your credit card terms have outlined how to use your credit card more often in order to keep it open. To be on the safe side, use all your credit cards every three or four months to keep them active. Otherwise, an unsaved credit card may be canceled by a credit card company.
The Credit Card issuers Are shutting down the credit card
Credit card companies often do review their credit card portfolio and get rid of credit cards that are no longer relevant. In this case, the credit card issuers will give a general notification to all cardholders in advance on such issues and letting you know your options. You may be able to transfer your account to another credit card with the same credit card issuer.
If the Bank is Closing
More often, some credit card issuers are usually forced to shut down operations when they are no longer profitable. Many credit card issuers sell their credit card account to a new credit card issuer. The new account issuers may decide you shut down the old credit card account and open or apply for a new account if you like to do business with them.
If you reject a Rate Increase or Other Changes
Before a credit card issuer can introduce a change to your credit card, like increasing a fixed interest rate or annual fee, they must alert you and give you up to 45 days advance notice. During this time you can reject the new credit card terms and choose to pay off your account under the old terns. However many credit card issuers close your account if you decide to reject the new terms.
A credit card cancelation can drop your credit score especially if there is still a balance on the card account. Since it raises your credit card utilization. The good thing is that your cred score may improve over time if you clear off your balance payment. If your card is, canceled you’re still responsible for clearing off your card balances completely.