Identify Reasons for a Credit Card Account Cancellation

Credit card issuers aren't allowed to charge a dormancy or inactivity fee to cardholders who don't use 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 just cancel your credit card if you stop using it.

Your credit card terms may outline how often you need to use your credit card to keep it open. To be on the safe side, use all your credit cards every three or four months to keep them open and active.

Regular minimum payments are a requirement of your credit card agreement. Not many creditors cancel your credit card after only one missed payment. Some will suspend simply 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.

A recent change in credit card law banned universal default—the practice where a credit card issuer would increase your interest rate because of a late payment with another credit card issuer.​

While creditors can't increase your interest rate because of late payments on other accounts (unless the account is with that credit card issuer), they can close your account completely. If your credit score starts slipping, don't be surprised if your credit card issuers start closing your credit cards.

Before a credit card issuer can raise your rate or annual fee, they must give you a 45-day advance notice. During that window, you can reject the 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.

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 under the card issuer's offerings.

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.