Reasons Your Creditor May Close Your Credit Card Account

A credit card may be used for different things, you may be thinking that you can stash it away until a rainy day, or just use it as a financial security blanket and only take it out of your wallet when you really need it. Whether you use it regularly or not, there are a few things you may not know about this small piece of plastic.

Did you know that creditors reserve the right to close your credit card without warning? On top of this, did you know that they are not obligated to provide you with one? These facts may be surprising, but the fact is creditors have the right to close your credit card account. This blog post will shed some light on the most common reasons for the closure.

Reasons Your Creditor May Close Your Credit Card Account

You may have landed on this article because you found out that your credit card has been closed. This experience may come as an unpleasant surprise to anyone. Your creditors may not always provide an explanation for why they decided to close your account. Read on to find out the possible reasons why your account was closed.

1 – Inactivity

Believe it or not, your credit card can be closed whether or not you use it. If you have not used your credit card in quite some time, your account may be closed due to inactivity. The reason behind this is credit card companies can only afford to provide credit to a finite number of people. If they notice that you are not using your credit card (and thereby earning them a profit in transaction fees and interest charges), they may decide to close your account without so much as a warning.

2 – Red Flags on Your Credit Report

There may be some situations where you find yourself in need of extra funds and then the next moment, you have maxed out three of your credit cards within a short span of time. It may seem unlikely, but this type of situation does indeed happen. If you have unusual activity on your credit card, it may spark red flags on your credit report. Creditors look out for these red flags and may close your account because of them.

3 – Delinquency

If you have not paid at least the minimum amount due on your credit card bill, creditors will eventually close your account. Many accounts are closed for this specific reason. If you are a delinquent payer, it means that you have not held up your end of the bargain and the creditors will close the account. Keep in mind that just because your account has been closed, it doesn’t mean that they will not try and collect the money you owe them. 

Conclusion

If you have just found out that your credit card has been closed without so much as a warning, the reason for the closure may be listed above. At this point, you may think that reaching financial security is bleak. However, there are still ways to reach this financial goal. Working with a credit counsellor can help by reviewing your overall situation and provide recommendations based on their observations. These professionals are committed to helping you overcome your financial difficulties and reach your goals.

If you need help getting out of your financial rut, work with the debt professionals at DebtHelpers.ca! We offer a range of consulting services and debt solutions designed to help you reach your goal of becoming debt free. Get customized debt solutions today!