Sudden Credit Card Cancellations And What You Need To Know

Like most American consumers nowadays, you have probably realized how important it  is to have a credit card these days. The continuing unemployment and economic slowdown means that you have lesser expendable income to rely on. Thus, in case of emergencies or if you really need to buy something very badly, you don’t actually have to have cash for it. You can just use your credit card. Of course, that is not exactly a smart move, considering the times but at least you have some kind of financial buffer, right?

If you are relying on your credit card to give you something to fall back on in the current financial climate, then the worst thing that can happen to you is when you find out that your credit card has been canceled.

Unfortunately for some credit card holders, credit card companies are currently on a campaign of trimming away risky credit card holders and credit card holders who don’t seem to be earning for them. Credit card companies can easily track card holder purchasing patterns and can, of course check credit scores very easily. Thus, if you have a bad credit score, you are liable to get cut. If your spending pattern shows some kind of financial problem, you are also liable to get cut. In fact, there are many details that credit card companies are looking into to consider if they should cut a credit card line or not. Even credit card holders who have excellent credit scores are still at risk of losing their plastic, depending on what alarming details the credit company sees.

Cutting credit card accounts are just one of the many moves that credit card companies are doing to prepare themselves for the upcoming credit card bill which will activate in the first quarter of 2010. While the credit card bill will protect credit card holders from these practices when it activates, unfortunately for credit card holders, that is still several months away. For now, credit card companies have practically free reign over the situation.

There is a bill called the Equal Credit Opportunity Act which offers some clarity to the matter. According to the bill, a credit card account can be canceled at anytime, without giving any notice, if your credit card account becomes delinquent, defaults or has not been used for more than one year. If, however your credit card account is in good standing and is active, then you have the right to ask why your credit card line was closed.