Reasons To Close Your Credit Card Account

Nov 14, 2022 By Triston Martin

When you no longer wish to use your credit card, you, as well as the credit card issuer, has the option of canceling it. Your credit card may be canceled without prior notice, and you may only find out when a purchase is unexpectedly refused. Credit card companies have the right to terminate your account for the reasons listed below.

Credit Card Cancellation And Its Consequences

Eliminating a credit card usually results in negative consequences. If you continue to carry a balance on an open credit card, it could lower your credit score because of the increased utilization of your available credit. When you pay down your credit card amounts, your credit score should rise over time. You must continue making at least the minimum payment on your balance each month until it is paid in whole, even if your credit card has been canceled.

You No Longer Use The Card

Issuers lose money on credit cards that go unused. And credit card issuers can't tack on an "inactivity" or "dormancy" fee if a customer doesn't use their card for a while. For the benefit of both the cardholder and the issuer, credit cards are sometimes closed.

Credit card companies are not required to terminate inactive cards after a certain period. Use each of your credit cards once every three to four months to be on the safe side. To keep your credit card active without lifting a finger, consider signing up for a streaming service that charges you regularly and then setting up automatic payments. Just remember to send in your monthly payment on time.

You Have Cease All Payments

Your credit card agreement stipulates that you must make at least the minimum payment due each billing cycle. While a single late payment is unlikely to result in the cancellation of your credit card account, a pattern of delinquency can put you at odds with your card issuer.

If you fall 60 or 90 days behind on payments, some credit card companies will temporarily disable your card and only activate it again once you've paid off your balance in full. Your credit card will be charged off and closed if you don't pay for 180 days.

Your Credit Rating Has Fallen

Creditors can't raise your interest rate for being late on another account (unless it's also with that credit card provider), but they can shut your account entirely if you look like you might default. With a declining credit score as a result of missed payments, credit card companies may begin canceling your accounts.

Refusing A Price Hike Or Other Modification

Your credit card issuer is required to give you 45 days' notice before making any type of pricing change, including increases to your fixed interest rate or annual fee. Within that grace period, you can either accept the revised conditions or cancel your card and return to the original terms. However, if you reject the revised terms, many credit card companies will cancel your account.

The Credit Card Company Is Cancelling My Account

When credit card issuers review their portfolio, they may cancel cards that no longer meet the criteria. Your credit card company will most likely notify you in writing before closing your account, allowing you to make other payment arrangements. It's possible that you can switch your account over to a different credit card issued by the same company.

Due To Bank Closure

When credit card companies cannot turn a profit, they sometimes have little choice but to cease operations and close their doors. Credit card accounts are a valuable commodity. Thus it's not uncommon for issuers to sell their customer data to competing companies. You may need to reapply for a credit card if the new issuer decides to cancel your account and you want to continue using their services after they've done so.

When Should Old Credit Cards Be Canceled?

A credit card that is no longer being used may be better left active. It's impossible to say with certainty how a cancellation would affect your credit score, but it won't be good. Suppose you cannot control your spending or have trouble maintaining good credit. In that case, it may be advisable to cut up one or more of your credit cards.

To Boost Your Credit, Responsibly Use Credit Cards

You may assist your credit by continuing to use your card properly and paying it off each month. Maintaining high credit standing is advantageous, even if you only use your credit card occasionally for little purchases to keep it active. This is because on-time payments, the lifetime of accounts, credit utilization, and credit mix affect your credit score. To examine where you stand and make sure your credit card accounts are still active, you can also monitor your credit for free.


Credit card companies have the right to cancel your account for reasons that may or may not be related to you. If you wish to keep a card, you should use it at least occasionally and follow the guidelines for doing so.

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