Most Arizona consumers realize that credit card companies compete with each other for customers. This is why issuers offer incentives and rewards with credit cards. For this reason, it seems unlikely that credit card companies would close credit card accounts in Arizona unless it was absolutely necessary. However, credit card accounts are closed frequently and for several different reasons. The truth is that Arizona credit card holders cost their issuers money. So, unless accounts generate income in return, credit card companies may close them.
Seven Common Reasons Why Credit Card Accounts Belonging to Arizona Consumers are Closed
It may or may not surprise Arizona consumers if one of their credit card accounts is closed. This is because some reasons for the closings are more obvious than others. Many Arizonians are also inconvenienced by account closings because losing a credit card reduces their available credit. This can cause their credit scores to drop. So, if one of your credit cards is shut down and you don’t know why, here are six common reasons.
You somehow violated your account agreement.
When Arizona credit card accounts are closed for this reason, consumers typically see it coming. Arizonians who violate their account agreements typically do so by making a lot of late payments or repeatedly going over their spending limits. So, if you have missed several due dates with your credit card bills, you should stop. Even if your issuer leaves your account open, late payments can hurt your credit score.
You stopped using the card.
This happens to a lot of Arizona residents who keep a credit card around for emergencies only. Unfortunately, inactive accounts still cost issuers money. After all, credit card companies must maintain sufficient funds to cover all of their customers. Therefore, issuers routinely audit existing accounts and cut the ones that show no signs of recent activity.
You’ve made a series of “bad” payments.
If you “pay” your credit card bill with insufficient funds in your bank account, it costs the issuer money. Of course, you can always make up the payment later, and if you only do this once, it is likely that nothing will happen. Yet, if you make “bad” payments repeatedly, your credit card company may decide that keeping you as a customer is just too expensive.
You refused new account terms.
Normally, issuers must give their customers at least 45 days’ notice about changes to their account terms. Otherwise, they violate the Truth in Lending Act. The only way they don’t have to notify you about changes is if you have a card with a variable interest rate, and the prime rate changes. If Arizona consumers don’t, for whatever reason, accept new credit card terms, it is likely that their issuers will close their accounts.
Your credit score has dropped significantly.
During routine audits of credit card accounts, issuers often run “soft pulls” on their customers’ credit reports and credit scores. Then, if they see that you have lost your credit worthiness since your account was opened, the issuer may decide that you are too risky to keep as a customer. This is one of many reasons why Arizona credit card users should take measures to maintain or improve their credit scores.
It’s a store credit card, and the store went out of business.
This is one of the worst situations for Arizona credit card holders because there is literally nothing they can do to prevent it from happening. Lately, a lot of retailers have declared bankruptcy and closed their doors. This, unfortunately, can leave their credit card customers with one less account on their credit reports. However, if your favorite store goes out of business, check your options. The bank that underwrote the store credit card may offer you an alternative card to keep you as a customer.
Your issuer has discontinued your credit card.
It seems unfair, but, sometimes, a credit card company opts to eliminate a card altogether. Typically, when this happens, the issuer replaces the discontinued card with a new option. If this is the case, if you are a customer in good standing, your issuer may offer you the new credit card as a replacement. There’s even a chance that the new card will come with perks and bonuses to make the transition more enticing.
Why Arizona Consumers Should Check their Credit Reports When Credit Card Accounts are Closed
Again, if Arizona consumers suddenly lose a credit card account, their credit scores might drop. This is because part of your credit score reflects how much of your available credit is in use. Ideally, you should use no more than 30% of your available credit at any time. If, however, your utilization rate is too high, it makes you look too reliant on credit, and lenders will see you as a risky borrower.
Therefore, if an issuer closes one of your credit card accounts, you should check your credit reports to make sure that other factors aren’t working against your credit score. For example, mistakes and errors on your credit reports can unnecessarily cost you credit scores points. Also, these types of inaccuracies are common, not your fault, and entirely removable. In fact, the Fair Credit Reporting Act (FCRA) entitles consumers in Arizona and other states to error-free credit reports.
Another federal statute known as the Fair and Accurate Credit Transactions Act (FACTA) gives you free copies of your credit reports from each of the three major credit bureaus every 12 months. To easily take advantage of this right, go to www.annualcreditreport.com. Here, you can request credit reports from TransUnion, Experian, and Equifax all in one place.
If, while going over your credit reports, you find mistakes and errors, contact Credit Repair Lawyers of America in Arizona. When you call or email our firm an experienced credit attorney will handle the dispute process for you. We’ll get you clean credit reports, even if it means filing a lawsuit on your behalf, and all of our services are FREE to clients.
How Arizonians can Get a Free Credit Repair Lawyer
Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in settled cases. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (480) 771-6001 or contact us on our contact page.
For more information about Free Credit Repair, please visit https://creditrepairlawyersam.com/arizona/credit-repair/.