When you attempt to use your credit card to complete a purchase, the last thing you expect is to find that it has declined. However, after looking into the matter, you may be shocked to find that your account has suddenly closed with no warning. Unfortunately, these matters can happen, so learning what circumstances can cause a card issuer to close your account and the impact this decision can have on your credit score is critical. You’ll also determine the importance of working with a San Diego consumer lawyer to assist you if you believe your rights were violated when your credit card was canceled.
Why Would a Credit Card Be Canceled Without Notice in CA?
There are several reasons your credit card account may be closed without prior notice. Familiarizing yourself with these matters can help you understand why your card has been canceled or prevent this from occurring. It’s also imperative to understand that while some card issuers will issue a notice before closing a card, they are not required to do so. As such, your card may close without notice.
The first major reason your account may be closed is due to inactivity. While the exact amount of time will vary based on the card issuer, most will close the account if it has not been used in a few months or a year. If you have a card that you do not use often but want to keep it open, you may want to use it to pay for a recurring bill to ensure it stays active.
Another reason your card may close without notice is that you have consistently exceeded your credit limit. While accidentally going over once or twice may not be an issue, repeatedly surpassing the limit in place can indicate to the issuer that you are unable to manage debts, making you a risky lender. As such, they can close your account to protect their best interest.
What Impact Can This Have On My Credit Score?
Generally, one of the most significant impacts a sudden credit card closure can have will impact the credit utilization aspect of your credit score. When one account closes, it can cause your utilization to drastically increase, which can result in your credit score dropping.
Another aspect of your credit score that can be impacted by the sudden closure of a card is your credit history. In order to understand your borrowing habits, creditors will look at how long you’ve borrowed. If your longest-standing card is closed, it can hurt your credit score, as it will reduce the age of your credit. Similarly, opening a new account to compensate for the closure will also bring the median age of your credit down further.
If you have reason to believe that your rights were violated by the card issuer, such as if they violated the Truth In Lending Act or Fair Credit Reporting Act when closing your card, connecting with an attorney is critical. At Barthel Legal, our firm understands how difficult these matters can be. That is why we are committed to guiding you through these difficult times. When you need assistance, our firm can help. Contact us today to learn how we can fight for you.
