The credit card industry is in a state of upheaval right now due to several factors. First is the general economic downturn which affected gravely the credit industry, sending several major credit companies to the brink of bankruptcy.
The rise in delinquencies and write offs were primarily one of the major causes of the credit industry crisis and the situation is still continuing today, albeit there have been some improvements and the industry is getting back some of its confidence. Finally, the credit card industry is also currently in a state of overhaul to adapt itself to prepare for the upcoming activation of the credit card bill on the first quarter of next year.
As a result of all of these, credit card companies are now introducing several changes to their business model, many of which are hurting credit card holders. Currently, credit card holders are seeing their interest rates and their fees go sky high. New fees and charges are also being introduced. Credit card companies are also actively cutting down available credit for their credit card holders. However, the worst thing that can happen to any credit card holder is getting their credit card suddenly canceled.
If you have a credit card, this is probably something you ought to be aware of. Credit card cancellations are usually done by a credit card company for a number of reasons. The most common is when they consider a credit card holder as too high a risk for them to continue maintaining as a customer. However, they can also cite any other reason as well.
Credit card companies can cancel your credit card at anytime with but one condition: that they inform you ahead of time, usually thirty days, before they cut you off. The problem is that most notices are sent through snail mail, so you can just imagine your chances of getting their notice on time. Plus, you might have moved too and forgot to update your mailing address or you might be traveling when the notice arrived.
Getting your credit card canceled can be quit alarming. Many people have had the nasty surprise of paying with their card only to have the purchase rejected because the card has been canceled. What's even more worrying is that, right now, some credit card companies are cutting off the credit lines of people who are relatively low risk borrowers. So even if you are up to date with your payments, you might still get your credit cut.
So far, the practice is still not that widespread but there are indications that it may soon be. If you become a victim of this kind of practice, you should try calling up your credit company, though there is little hope that you'll get your credit line back.