People who have many credit cards are often concerned about whether their cards will be canceled if they don』t use them frequently. What kind of negative effects will occur as credit cards are canceled? And do canceled credit cards influence your scores or make you appear on the blacklist?
According to laws, banks indeed have the right to cancel your credit cards based on your inactive account activities, and they don』t need to inform you about it in advance. Therefore, many people do worry about whether certain credit card will be canceled as it isn』t used for a long time, which in turn has effects on credit history or scores,etc.
I have to admit that this problem discussed is hard to make a conclusion as most people actually don』t have so many credit cards. In fact, those credit cards can be used to a large degree. There are few people, like us, who have ten or twenty credit cards. However, there is still a rule for us to follow.
In a whole, the problem discussed often occurs to credit cards without annual fees. Banks are very welcome you to pay annual fees, though you have a credit card with annual fees. Certainly, credit cards providing various benefits through annual fees don』t belong to this category. For example, Chase credit card provides accommodation in hotels for free on the condition of annual fees.
Policies of Various Banks
Few reports show that Chase will cancel your non-commonly used credit card on its own. IHG/Marriott/Hyatt issue three credit cards for free accommodation in hotels on the condition of annual fees respectively. After searching their respective offer terms on their application pages, I find that only IHG clearly demonstrates that 「Chase may close your account due to inactivity」. Thus, I prefer that Chase may cancel non-commonly used credit cards which are applied for only to make free accommodations in hotels. As to other credit cards, Chase should count money in your account if you pay annual fees.
2. American Express
Amex has classified on its official website that non-commonly used credit cards will be canceled, yet which is opposite in practice actually. At present, Amex makes a limit on the number of credit card held by each person as being four, which is easy for people to use those four credit cards. As to Charge Card, it will charge you annual fee of at least 95 dollars every year whether you use it or not.
Several years ago, Citi seemed to cancel a number of inactive credit cards. But generally speaking, Citi doesn』t do such things frequently.
4. Bank of America
It seems that BoA often does such things, as some credit cards which are not used even in several months are canceled. However, BoA is an entry card for many people. Concerning such situation, people have to use credit cards of BoA sometime in order not to make their cards canceled.
5. Other Banks
Many people say that Store Credit Card, such as Macy』s, will be canceled directly by banks one or two years after you only use the card for several times and then forget to use it for a long time.
Probable Negative Effects
There is one thing you should know that your canceled credit card due to your inactive account activities is not the same as being added into the blacklist, about which you should not worry. What you really should worry about are the results as following:
- Credit length shortened;
- Credit limit reduced;
- Utilization Ratio rose;
- Mark left
I want to introduce the last point to you in general. After your credit card is canceled, account closed by customer or closed by creditor will be written clearly on your credit report. Normally speaking, the latter may bring a little bigger influence on you. Account closed by creditor means that your credit card is canceled by banks, while account closed due to inactive activity is probably marked as 「closed by customer」. I remembered BoA did like that.
As a whole, all the effects discussed above are not destructive. Only serious negative effects on your account, such as money-defaulting, public collection or personal information being stolen, will greatly reduce your credit scores. Even the first three problems have serious effects, but they still can be saved. For example, if you owe a large amount of money, you should pay back all and then maintain a low Utilization ratio. Thus your credit scores will rise again.
Besides, if your credit cards are closed, you can try to phone the customer service of the bank through the number on the back of your credit card about whether you can re-open this card. There are two points that you should notice as following:
- You』d better figure out whether you need another hard pull to re-open your card. If you need another one, I think you should apply for a new credit card;
- You』d better figure out whether you can still have you account history to re-open you card. If the answer is no, I think you should also apply for a new credit card.
If you don』t get satisfying answers about the issue of re-opening your card, you can hang up for a while, then phone several other customer services. Just remember to be polite. If it still doesn』t work, you』d better think you have canceled your credit card by yourself.
How to Avoid Credit Card Being Canceled?
To keep your account active is a natural way to forbid your card from being canceled due to inactive account activities. You』d better use your credit card in three or six months and then promise to pay back money in time.