While cardholders can close their own credit card accounts, card issuers can too. Fortunately, you might have some recourse if your issuer closes your card unexpectedly.
If you’re dealing with an unexpected credit card closure, here’s what to know about reopening a closed credit card, avoiding future closures, and more.
As mentioned, there’s no guarantee your card issuer will reopen your closed account. If you’re trying to reopen a Discover card, for example, you’re probably out of luck — Discover’s policy states it won’t reopen a closed account. But trying to reopen a closed card with another issuer is fairly straightforward.
Before calling your card issuer, try to determine why your card was closed. Common reasons for account closures include:
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Inactivity: Many issuers require you to use your card during a certain time frame for it to remain active. So if you don’t spend on a particular card for several months, you could find your issuer has closed it.
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Fraud: Unfortunately, credit card fraud is a persistent problem. Your card issuer may close your card if you have suspicious charges on your account, such as large expenses or charges made in another part of the world. However, chances are you’ll get an alert before the closure.
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History of non-payment: Your issuer may also decide to close your card if you’ve struggled to keep up with your payments.
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Exceeding your credit limit: Spending beyond your card limit may not result in a card closure, but it could prevent you from using your card until you’ve paid it down.
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Changes to your credit score: If your credit score declines and ends up lower than the score your issuer requires for your card, it’s possible your account could be closed.
Related: How to boost your credit score with a credit card
Once you’ve researched potential reasons your card was closed, contact your card issuer. Ensure you have your old card and past credit card statements, and expect to provide personal information like your name, email, Social Security number, and other contact details.
Call your credit card issuer’s customer service team to discuss your card closure. Discuss the suspected reason for the closure, and make your case for reopening your card. There’s no guarantee your card issuer will reopen your old account, but it’s a possibility.
While it’s impossible to avoid credit card closures in some cases, such as in instances of fraud, taking the following steps can help reduce the chances your issuer will close your account.
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Keep up with payments: Ensure you make your monthly credit card payments on time, and ideally, in full. If you can’t pay your full balance one month, focus on putting aside some money to pay it off the next month. Consider setting up autopay on your credit card accounts to make sure your monthly bills are paid.
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Use your card periodically: Card issuers often close credit card accounts due to inactivity. To avoid this pitfall, use your card to pay for a monthly subscription or another low-cost, regular expense.
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Track your credit score: Some issuers may close your card if your credit score dips below the required score for a particular card. Tracking your credit score through your credit card account or bank and maintaining good financial habits can help keep your credit scores healthy.
An unexpected card closure can hurt your credit scores in a few different ways. Popular credit scoring models consider your credit utilization (or the credit you’re using relative to your total amount), the length of your credit history, and your credit mix when calculating your credit scores. All of these things can be affected when you — or your issuer — closes a card.
For instance, if you had a high credit limit but no balance on the card your issuer closed, the closure could increase your credit utilization — the amount of credit you’re using relative to the total available to you. Since credit scoring models favor low credit utilization, higher utilization could mean lower credit scores.
Credit scoring models also favor a longer credit history and a solid mix of different accounts. If your credit card company closes an older account, it could negatively impact the age of your credit history, potentially causing your scores to decline. And if you have few loans or credit lines, an unexpected card closure could impact your credit mix, harming your credit scores.
If your credit card issuer doesn’t agree to reopen your card, it may be possible to apply for the same card again. But the rules for reapplying for the same card vary by card and issuer, so it’s best to discuss this option with your credit card company.
Also, be aware that you might not be eligible for certain card benefits, such as welcome bonuses, if you apply for the same card again. With the Chase Sapphire Preferred and Chase Sapphire Reserved cards, for example, you can’t earn a welcome offer again if you’ve earned one in the past four years.
This article was edited by Rebecca McCracken
Editorial Disclosure: The information in this article has not been reviewed or approved by any advertiser. All opinions belong solely to Yahoo Finance and are not those of any other entity. The details on financial products, including card rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the bank’s website for the most current information. This site doesn’t include all currently available offers. Credit score alone does not guarantee or imply approval for any financial product.
