Consumer Alert: Did your credit card issuer close your account? Here’s what you can do about it!
ROCHESTER, N.Y. (WHEC) — Today’s consumer alert takes a hard look at credit card cancellations. The first months of the pandemic were scary. The lockdown led to an economic meltdown. And you and I weren’t the only ones reeling from pandemic panic. Your banker was terrified.
When times are good, getting credit is easy, and money is flowing. Consumers and their cards have a cozy relationship, and for card issuers, all is right with the world. But when the economy collapsed and unemployment skyrocketed, bankers had no idea who was working and who wasn’t. And for those folks in the business of loaning money, that’s the stuff of nightmares. So they took this approach. They closed your credit card and lowered your limit, without asking you. According to research done by LendingTree, that happened to one in three consumers. And it’s more likely to have happened if you used the card little or rarely.
"And the reason is basically that if you weren’t using that card during good times, they’re a little nervous about you using it when things go bad, because they’re concerned that you’re using it kind of as an emergency fund essentially and you might not be able to pay it back,” said Mark Schultz, Chief Credit Analyst at LendingTree. “So it’s really a way of banks minimizing their risk in a really difficult financial time."
And if your card was closed or your limit was slashed, that can slash your credit score as well. And you did nothing wrong. So if this happened to you, call your credit card issuer and ask to have your account reopened or your limit raised.
So with the help of LendingTree, Here’s Deanna’s Do List.
- Look for specific contact information in the notification you received. Don’t simply call the number on the back of the card. The folks at that number are most likely to work with you.
- Update your income level and other relevant information, if necessary. Did you get a raise since you opened the card? And don’t forget your spouse’s income. You can count that too.
- Make sure you get a reopened account, not a new one. You need to make sure that your history will appear unbroken on your credit report.
And this is perhaps most important. Be nice. Smile when you’re talking to them so your voice smiles. And yes, I know it’s infuriating when your card issuer damages your credit and you did nothing to deserve it. But you’re more likely to get your way if, as the song says,” you just smile.”
And that’s your consumer alert.