Is It True That Credit Card Grantors Can Close An Individuals Accounts Without Notice?

Many of us have found ourselves in a position over the past 5-7 years where one or more of our credit cards were surprisingly closed by the creditors. It is usually a shock and never seems to come at a good time. Even those with excellent credit and no need for the extra credit card feel slighted when they find out they have been rejected for continuing use of a credit card. Some even try to fight the creditor to re-open it with no success. The worst is when a creditor closes a credit card on us right before we are applying for a mortgage, causing our score to plummet. When balance to limit ratio's change due to a reduction in the aggregate limit, it could drop scores substantially, depending on the current balance.

For example, if we have $50,000 of credit card debt with a $25,000 balance and a card closes that has a $25,000 limit we have gone from 50% balance to limit ratio to 100%. This action could drop our scores 50-100 points depending on our current FICO scores. This drop could cause a rejection for a mortgage or a much higher interest rate, costing us hundreds of thousands of dollars over the term of the mortgage.

How could this be that creditors are allowed to just close credit cards on us without notifying us in advance?  Isn't this wrong and illegal?  Unfortunately, the answer is that it may be wrong to us but it is completely legal. Since the Credit Card Act of 2009, many changes were made to protect the consumers interest but not regarding creditor's closing credit cards.

Creditors can close accounts for many reasons and some seem quite legitimate, like late payments occurring, going over the limit, and filing a bankruptcy. Creditors can also watch your credit reports and assess your spending, payment patterns, and management habits. If they feel you are carrying balances with other creditors that might make you a riskier bet they can shut you down without warning. Inactivity of credit is a common reason creditors close accounts as well, so if you don't use your credit card accounts at all they may pull the plug. Also, if you open too many accounts in a short time your ability to manage all of that new credit at once may be questionable.  

A creditor can close a credit card account for a delinquency, inactivity, or default without informing the consumer.  When creditors close accounts due to poor credit they have to notify the card holder 30 days after the closing. Although it may seem wrong to take this action against the consumer without warning, there are valid reasons. Although many consumers would not take a negative action some would spitefully rack up charges once they know the account is closing, having no intention to pay them back.   

So how can consumers protect themselves from credit cards closing by the grantor?     

1. First keeping low to moderate balances is a great help. Trying to stay at 20 - 30% aggregate and individual balance to limit ratios on credit cards is a good way to keep the credit risk alarms from going off. 
2. Making sure all credit cards are active a few months out of the year is a great idea. Consumers don't have to charge a lot of money in those few months they just need to make a small purchase.
3. For those who have many cards and only carry a few with them they can put recurring auto pay memberships on the cards they don't carry like EZ pass, gym memberships, etc. 
4. Making sure your credit is excellent and keeping it that way will also insure you look your best for those watching. Those with poor credit should search out an excellent credit repair company and get a free assessment of what can be done. 
5. Many credit monitoring products help you daily, weekly, monthly to evaluate your credit standing while watching your balances. This is a great way to stay on track of your credit activity.
6. Only opening new accounts when you have strategically decided it is the right time and the right credit account. Randomly opening credit is never a good thing.

Some consumers are under the false impression that if credit is closed by the consumer it impacts them less than when the creditor closes the account. This is totally false. The scores can drop just as much depending on many factors including the balance to limit ratios on revolving credit.  

Call us with any questions or feedback on credit challenged clients or credit in general!

     

Making sure credit is analyzed with future financial goals in mind is a MUST before taking an action that can foil those plans and limit a consumers options for a better quality financial life.  

It's NOT that complicated.

People are always looking for the magic pill to success and accomplishments.  Things aren't nearly as complicated as we make them seem sometimes; however it does require work and dedication.  If you want to lose weight you take in less calories with your food and burn calories working out.  It's a simple formula yet we tend to make it harder than it needs to be.  It's all about dedication.  The same goes for your credit status! If you want it to grow, you learn how. If you want higher limit credit cards, you learn the strategies to attract them. If you want to get approved for a low APR interest rate car loan, you learn what type of criteria they are looking for and strive to achieve it. If you want excellent credit you seek a credit repair consultant who knows how to achieve great results and who will walk you through the steps to get there.

If you want to achieve excellent credit, then move with speed, keep quiet and stick to your guns. You don't need validation from unqualified people about your credit status.  Think really hard about who you are sharing and seeking input from! Are they successful themselves? Are they go-getters? Are they positive uplifting people? I'm pretty sure the answer is NO in most cases.  And then the next question is WHY in the world are you wasting your time trying to get validation from THEM of all people?  They may have their own reasons for the reservations but they should not become yours.

Here's the deal. Nobody is in the trenches with you working on your finances. Nobody has the vision you have better than you and nobody is making the monetary and time investments that you are.  And with that being said, nobody's unqualified opinion should be entertained. Seek EMPOWERMENT from those who are willing to help you achieve your goals and who have expertise in that area, seek EDUCATION on your credit rights and things the credit bureaus don't want you to know, and seek ways to ELEVATE your credit scores to new heights.

No matter what your credit challenges are, the GREAT part is that there is a solution for them.  But YOU have to WANT the solution. You have to take action on getting what you want.  Nobody can do that for you...except you!  Don't let other people's opinion affect your decisions because at the end of the day how is their opinion helping you?
 
To join motivated, progressive individuals and business owners looking to solve their challenges, contact The Credit Repair Queen for a FREE consultation at 877-292-0656.  
 
Don't miss a chance to use my NO EXCUSES plan that allows ANY individual serious about their credit, to get what he or she needs!
 
Cheers to A+ Credit
 
Stephanie "The Credit Repair" Lawrence

Get Your Time Back!

Procrastination is killing consumers everywhere! Having working with hundreds and hundreds of individuals, I know first-hand how a lack of focus and discipline is hindering their success.  When I get down to the core of what is going on, I always hear the same excuse.: "I just don't have enough time."  I know people stay busy, juggling many, many things in life nobody and knows that better than me because I am in the same boat!

But there is a way to ensure that you put the effort you need into your financial worthiness so that it can grow and expand and so can your lifestyle. First off, most of us have a way of avoiding doing the important things in our life that we either don't like to do, or we don't know how to do!  We distract ourselves by doing meaningless work and fooling ourselves into thinking we are really doing something - NOT!  So in order to get real with ourselves, it requires being honest and taking inventory of just where we are putting our time and attention in life. 

What about your budget, what about cleaning up your credit, what about paying off old debt? Pay attention to your daily habits.  How much time are you spending on the phone talking about unimportant things with your friends...how much time are you spending on text message conversations about much of nothing? How many favorite TV shows do you just HAVE to watch that are sucking precious hours out of your life and taking away from your business... a lot of reality shows, right?

If you walk around with a journal for a few days and log the hours you are engaging in such activities, you will find the time you swore you didn't have to put into your financial status to take it to the next level.

It starts with some deep soul-searching and evaluation.  As crazy as it sounds, if you just go through this simple exercise, you will uncover the MUCH needed precious time you didn't think existed.

Seriously - what's more important?  Your credit or the Housewives? LOL

Until next time...

Cheers to Excellent Credit,

Stephanie "The Credit Repair Queen" Lawrence

P.S.  Contact The Credit Repair Queen for a FREE consultation at 877-292-0656 to discover how we can revamp your credit rating and improve your quality of life. You have nothing to lose and everything to gain!