Can a CC company close an account without any reason?

Submitted by Anonymous (not verified) on Wed, 06/24/2009 - 10:43

I have a card that I did not use for about 5 months. A few days back I tried to purchase some furniture using the card and it was denied. I called the company representative and they said the card was closed a month back as it had not been used for a long time. Can they do this? I have not been late in making payments and have enough credit limit still remaining. I understand it is not an act of penalty. Can anyone explain? How will this affect my credit score?

They could, it is not a usual practice, however, they want your business/money. More than likely they will add a fee(s) for non-use. or they can if it contains a balance. if they charged it off and gave you a zero balance and a pay off letter then they cannot. If they closed the account and reduced the amount you owe you are still responsible for the payments including late fees and interest. Credit card companies can pretty much do what they want regarding your account.

Wed, 06/24/2009 - 11:05 Permalink

Hi lily,

In response to the recent economic crisis the whole world is facing, credit card companies have chosen to close accounts that show no signs of activity for a long time. And worst still, the CC company can close the inactive accounts without any prior notice to the cardholder.

If you have had good credit records related to the card that was closed by the CC company, it will have a negative impact on your score. But if you haven't at all used the card for any kind of purchases, it will not affect you credit score.

Wed, 06/24/2009 - 11:10 Permalink
jonathan (not verified)

Hi lily,

Generally, CC companies close the accounts of those who have been delinquent a number of times. They see a lot of risk involved, in allowing such cardholders to use there services. But in your case, as your card was inactive for a long time, the CC company did not make any profit from your accounts. So they chose to close it.

You can request the CC company to reopen the accounts. It will be better if you able to talk to the company manager. You can assure him that you will use the card, at least for a few purchases every month.

Wed, 06/24/2009 - 11:24 Permalink

There have been a lot of issues in the news concerning what Jonathan is talking about. Some credit card companies have even offered a one time cash pay out for a person to close their card. The best way to see what is going on is to call.

Wed, 06/24/2009 - 13:08 Permalink