11-01-2013 10:06 PM - edited 11-03-2013 07:27 PM
Thought it makes for some interesting reading. Sorry if this was posted before.
"Maybe you've experienced this before: You get to the cash register, pull out your credit card, swipe it and are told it's declined. You try again. Same result. So you call the issuer and find out the account has been closed, despite the fact that you've never been late with a payment. "What even?"
If you're confused, you're not alone. This kind of thing happens -- and it's perfectly legal. New regulations do nothing to help in this situation. The Credit CARD Act of 2009 helped to increase protection against interest rate hikes and overlimit fees. But credit cancellation policies remain largely unchanged.
"Sometimes we close accounts based not on your actions or inactions, but on our business needs," the Chase Freedom agreement reads."
12-19-2013 10:43 AM
I see this happen frequently with my clients! If a lender doesn't feel they are paying down a balance quickly enough, they will close the card (balance still on it!) and then the client gets stuck paying it back for months while it hurts their credit. Sometimes if you haggle with their underwriters they can re-open the account, but more times than not they'll tell you tough luck.
For any other forum readers - if this happens to you, pay off any remaining balance as quickly as possible so it doesn't hurt your FICOs!
myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.>> About myFICO