4 Pillars Explains Reasons Your Credit Card Company May Close Your Account
After you receive a credit card, you probably assume you’ll have it as long as you want. Whether you use it regularly or stick it away for an emergency, a creditor is capable of closing your account at any time and for any reason. However, there are a few reasons that are more common than others. Today, 4 Pillars will be sharing why creditors may choose to close your account.
Delinquent Payments
One of the most common reasons to have your credit card closed is a simple one: not paying the bill. Part of signing up for a credit card involves promising to make payments, so if you do not do so, your creditor may choose to close the card down. This can be a horrible situation as it can significantly drop your credit score. The best way to avoid this problem is by paying your bill, even if all you can manage is the minimum payments. Even being late month after month can lead to the closure of your account.
Not Being Active
This might seem like an odd reason to close a credit card, but credit card companies prefer to have customers who use the card regularly since that means they get the benefits of interest charges and transaction fees. That means that if you never use the card, it’s possible that the card will be closed. If this does occur, you’ll see a note saying “account closed by creditor” on your credit report. However, this won’t affect your score in itself. It can affect the length of your credit history, credit utilization ratio, and credit diversity, however.
Credit Report Red Flags
Credit card companies sometimes monitor credit reports to see if red flags are present. For instance, even if you aren’t using this specific card in a problematic way, a creditor might notice you have other cards that are maxed out and not being paid. That’s one example of a red flag that can turn off the creditor, who might choose to lower your limit or close your account altogether.
If you have questions about your finances, the experts at 4 Pillars in Victoria are here to help. Our debt consultants are trained and experienced with situations just like yours and are happy to help.
For more information and a no hassle free consult, contact us at 866-690-3328 today!