Has your credit cardÂ been declined when you tried toÂ pay something? Then you know how embarrassing it can be. Youâll probably assume that it was declined because of insufficientÂ funds. But what if yourÂ credit card issuer completely shut down your account and you donât have thatÂ credit limit?
Sure, this doesnât really happen that often. But itâs still important to be prepared. Donât worryâweâre here to help. While thereâs not a ton you can do if your credit card company closed your account, there are a few things you can do after. And there are some steps you can take to make sure it doesnât happen again.
Reasons Why Your Credit Card Was Closed
Before we go over what to do when your credit company closes your account, here are some reasons why it might have been closed:
- Youâre in default.Â Letâs say that you have aÂ payment thatâs 180 days old or more. Thatâs a pretty big reason for a credit card company to close your account. If they do, theyâll probably sell yourÂ debt to aÂ collection agencyÂ as well.
- You arenât using your account.Â Has anyone ever told you to use it or lose it? The same applies to your account. If you havenât used your credit card for in a while, yourÂ creditor might close it. When theyâre not making any money, theyâre probably not interested in keeping you around.
- Youâve changedâor they have.Â Has anything major happened to your finances? Maybe youâve filed for bankruptcyÂ or your credit has taken a hit. Or maybe yourÂ credit card issuer is making major changes. Either way, the company could use it as an excuse to shut down your account.
What You Can Do if Your Credit Card is Closed
Donât be discouraged by your account closure. Sure, itâs inconvenient. But there are a few things you can do that might help:
- Reach out to your credit card company.Â Itâs worth giving your credit card company a call. Try asking why your account was closedâyou can learn from your mistakes and make sure not to do the same thing again. Your conversation with yourÂ credit card issuer could even end in a newÂ account opening. You might even be able to get the credit card company to reopen your accountâif youâre convincing.
- Check onÂ yourÂ credit score andÂ credit report.Â A closed credit account couldÂ hurt your credit score. Make sure to check thatÂ yourÂ credit score didnât go down because your account was closed. It’s also worth checking yourÂ credit reportÂ to make sure that everything’s in order. If it was closed in error, you may be able to dispute the record on your credit report and repair your credit.
- Try transferringÂ yourÂ credit limit.Â If you have another credit card with the issuer, you might be able to transferÂ yourÂ credit limit to that card. It could even help yourÂ credit utilization ratio.Â Try giving them a call to find out.
- Take a look at your finances.Â If your card was closed due to inactivity or missed payments, itâs time to take a look at your finances. Will a closed credit account take a toll? Is there a reason why you never used that credit card or were unable to make payments? Go over your spending, just in case.
- Get a new credit card.Â This might sound like a no-brainer. But after getting your credit card account closed, you might not want to bother getting another credit card. Trust usâyou can and you should. Find the right card for you through Credit.com.
How to Prevent Your Credit Card from Closing
We get itâhaving aÂ credit account closed isnât great. Whether it hasnât happened yet or youâre worried itâll happen again, there are a few things you can do to prevent it:
- Use it toÂ pay off a subscription.Â We live in a world full of different subscriptions, so youâre bound to have one or two. If you have a Netflix or Hulu account, or another subscription service, use your credit card to make each monthlyÂ payment.
- Only use it for online shopping.Â If thereâs a website that you commonly shop, like Amazon or Wayfair, make your card the main card for that website. Itâs an easy, mindless way to use your credit card semi-regularly.
- Pay your bills on time.Â You might be tempted to put too many purchases on your credit card. But doing so will make it harder for you to pay your bills on time. Keep your purchases reasonable so you can pay your credit card bill on time every month.
- Keep your credit score up. Your credit score is the only reason why you got your credit card. Make sure to keep your score up. Or if itâs down, try to build it back up. If youâre credit scoreâs in good shape, your credit card issuer should have no reason to closer your account.
Start with a Credit Card Youâll Actually Use
Getting a credit card account closed doesnât happen very often. But still, better safe than sorry. Make sure to use your credit card every once in a whileâand always pay your bills on time. And if youâre ready for a new credit card, check out our credit card marketplace. Try finding a card that actually fits your lifestyle and financial needs, so youâll use it often and responsibly.
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