6 Reasons for a Credit Card Account Cancellation

You Stopped Using the Card

Unused credit cards aren't profitable for credit card issuers. And card issuers aren't allowed to charge a dormancy or inactivity fee to cardholders who don't use their credit cards for several months. Sometimes closing a credit card is the better option for credit card issuers.

There's no standard timeframe for credit card issuers to cancel unused credit cards. To be on the safe side, use all your credit cards every three or four months to keep them open and active. Setting up a recurring payment, like a streaming service can be an effortless way to keep your credit card open. Just make be sure to make your payment every month.

You Stopped Making Payments

If you have an outstanding balance, the terms of your credit card require you to make regular minimum payments. While your credit card probably won't be cancelled after just one missed payment, a more serious delinquency can lead to a strained relationship with your credit card issuer.

Some credit card issuers will suspend your charging privileges if you're 60 or 90 days past due and let you start charging again once you bring your account current. However, your credit card will be charged-off and closed completely after 180 days or six months of non-payment.

Your Credit Score Dropped

While creditors can't increase your interest rate because of late payments on other accounts (unless the account is with that same credit card issuer), they can close your account completely if you appear at risk of defaulting. If your credit score starts slipping because you're falling behind on your payments, your credit card issuers might start closing your credit cards.

You Rejected a Rate Increase or Other Change

Before a credit card issuer can make a pricing change to your credit card, like raising a fixed interest rate or annual fee, they must give you a 45-day advance notice. During that time period, you can reject the new credit card terms and choose to pay off your account under the old terms. However, many credit card issuers close your account if you decide to reject the new terms.

The Credit Card Issuer Is Getting Rid of the Credit Card

Credit card issuers continuously review their credit card portfolio and get rid of credit cards that no longer fit. In this case, your credit card issuer will likely send advance notice before closing your credit card and let you know your options. You may be able to transfer your account to another credit card with the same credit card issuer.

The Bank Is Closing

Unfortunately, some credit card issuers are forced to shut down operations when they are no longer profitable. Many credit card issuers sell their credit card accounts to a new credit card issuer. The new card issuer may close the credit card and require you to apply for a new account if you want to do business with them.