Credit card canceled without warning?
Has your credit card been canceled without warning or for no apparent reason?
The Associated Press is reporting that consumers across the country have been reporting such problems, specifically with bank MasterCards that are co-branded with oil companies.
Citibank confirmed the practice, AP reports. Citi said in a statement it “decided to close a limited number of oil partner co-branded MasterCard accounts.” That includes Shell, Citgo, ExxonMobil and Phillips 66-Conoco cards.
No law, AP said, prevents banks from closing down credit accounts without warning. Credit card issuers all maintain the right, typically listed in the fine print on credit card agreements.
Have you experienced this? Should the law be changed?
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140 comments Add your comment
Misa
October 20th, 2009
5:23 pm
AMEX closed my account…I was a good customer that pif my charges before the statement was generated. The past 2 years I could only make minimum payments or every other month due to my employment situation. A letter was sent to me before raising my rate disgustingly high. I did not receive a warning or letter when the account was closed. I should be able to pay off the balance beginning of next year because my employment situation has changed. I still can’t believe they closed the account without consideration of my previous pay history.
ugaaccountant
October 20th, 2009
5:23 pm
The biggest issue here is how credit scores are determined. An account in good standing being closed should have no impact on your score. But it will.
Credit Rules
October 20th, 2009
5:24 pm
I’m going to run up huge balances on 3 new credit cards, then file for bankruptcy!!! I lost my job and have few assets, rent a house, so it’s no big deal to me!!!! Let the banks suffer for loaning me all that money! Besides, they can just get more bailouts from taxpayers!!!!! Money—it’s a nice thing to use, when you don’t have to pay it back! Big screen TV, new furniture—here I come!!
Millard
October 20th, 2009
5:24 pm
Hard to believe I am old enough to remember when there were no credit cards save for gas and department stores. The original “mastercharge” card was designed to be the ultimate get cash thingy. Prior to that you took out a loan at a finance co.or bank, and you paid cash at restaurants. I consider myself pretty savy having been in the consumer finance business, but I can tell you I have never read all the fine print. I don’t know anyone who has. Who has the time?
Most of my Parent’s generation never used a credit card their entire life. Several of them died millionaires. No surprise there.
Millard
October 20th, 2009
5:26 pm
Nard – Nothing wrong with Jennifer’s comments. If you love government regulation, keep voting for Democrats and you may get your wish.
Nique
October 20th, 2009
5:28 pm
We have one credit card and once a month we charge ONE gallon of milk on it to keep the card active and acount open and we pay for it immediately. You can have EXCELLENT credit SCORES WITHOUT credit CARDS. My DH and I both carry between a 750 and an 800 credit score. This keep premiums on insurance low. The only debt we carry is our mortgage which is being paid down as quickly as it can possibly be paid down.
ugaaccountant
October 20th, 2009
5:28 pm
Jose and others – This all comes back to the one thing 99% of people can’t afford to pay cash for, houses. If people have their credit scores lowered for no fault of their own, as this article clearly states, then they will have unreasonably high mortgage rates. Homes are a huge part of any economy, and if people can’t gain access to loans to purchase them then we will just sink further into recession.
ugaaccountant
October 20th, 2009
5:30 pm
Well “nique” it sounds like your credit score in part is determined by your credit card. Otherwise, why would you be playing games with it like you do?
itsme
October 20th, 2009
5:30 pm
I never wanted my gas card to be a bank card in the first place. I use my gas card as a gas card (pay balance in full every month), but I never use it as a bank card. When I want a bank card, I’ll get a bank card. However, I certainly do not want the company to cancel and affect my credit rating. That’s not right.
Derek
October 20th, 2009
5:30 pm
The banks have the right to cancel credit cards at any time, but after most of them received the Federal Bailout then it’s a disgrace that they took Americans money for their gain and now telling regular Joe to go you know where. In light of this, the major companies should be fined penalties so high that they all go out of business. I’m sick of companies using the goverments money for personal gain and killing off consumers.
Bill
October 20th, 2009
5:32 pm
As Dave Ramsey says, keeping credit cards is like playing with snakes – you are going to get bitten! Cut ‘em up, act your wage and tune into Dave – it will change your life! It changed ours!
Chris
October 20th, 2009
5:45 pm
Paid off Discover card 2 weeks before vacation. Got letter in mail one week later that card was canceled. Took 4 more weeks to get an explanation. They stated that they closed a number of accounts due to a shortage of cash flow. Really ticked me off. Not enough time to get another card. Had to overnight a payoff on my visa before vacation. No warning, no phone call, no boo, dad gum ya, or nothing!
contractor
October 20th, 2009
5:47 pm
I have a Citi MC/Home Depot Business Rewards card that will be cancelled at the end of this month.Citi explained that they will no longer have it for Home Depot. I will sorely miss my 3 points for every dollar spent at Home Depot.
Bud Flu
October 20th, 2009
5:47 pm
F— Dave Ramsey, Clark Howard, etc. Go watch one of Byron Dale’s lectures on youtube.
maybe
October 20th, 2009
5:50 pm
I was contacted by Chase about one year ago stating they were going to close my acct if I didn’t use card w/in 45 days. Apparently I hadn’t used it since ‘97. I bought some shoes, paid it off and have been doing this with all 3 of my cc since using one of them each month. I did get a letter about the interest rate going up but as long as I pay it off every time I use it the interest rate doesn’t really matter to me. But in the event of an emergency I like to know that I have it and sometimes a credit card is needed for hotel reservations, etc. I know that cc are better to have if there is a dispute versus debit cards. I’m not sure if the statement made about every time someone (even without your permission) checks your credit that it hurts your credit score. We froze our credit about one year ago and unless we already have credit with a company no one can check our credit and it has dropped all solicitations in the mail.
Not for the Ignorant
October 20th, 2009
6:05 pm
What’s funny is that those of you touting “Cash is King” don’t apparently realize that even the most wealthy a)carry debt, and b)have a line of credit.
Having credit requires that you be a grown up. If you don’t know how to manage money, you are right, stick to nickels and dimes.
Anyone who thinks that credit is not necessary must obviously reside in the Third World. We, in America, live in a capitalist society, a society home to entrepreneurship and ingenuity. No capitalistic free market system would ever make it without credit.
ihorizon
October 20th, 2009
6:06 pm
WOW!!!! Darn if I do, darn if I don’t is what I am feeling about banks and credit cards nowadays….it was nice to have to be able to borrow loans to buy a home and cars but it is about credit scores this and that!!! America was blessed with the gains of its nation, but now it is sadly going the opposite direction!!! I think the nation needs a revolution!!!!! And pray to the LORD above for more blessings as we will all need it more than ever to support our tithes!!!
Elliot Garcia
October 20th, 2009
6:09 pm
What a bunch of condescending punks on here. I travel overnight for my job 3 days a week. Do you think I should just pay thousands of dollars in cash out of my own money to pay for hotels and rent a cars and then wait 2 or 3 weeks for my company to reimburse me? It would be a lot better to put those charges on a credit card and then pay the bill in full when my expense check arrives….
Yo
October 20th, 2009
6:10 pm
They can cancel mine & and cash is a way to go.
Stat Man
October 20th, 2009
6:10 pm
It’s not the most economical way to go, but pay the annual fee and get an American Express card if you qualify.
So many of the pains I hear about bank cards, I never have a problem with. My payments are posted IMMEDIATELY – and I get an e-mail when they have received the check. I have no worries about getting cancelled and like most of the posters, I pay off every month. The benefits are well worth the small annual expense – at least to me.
Yo
October 20th, 2009
6:11 pm
Let the banks come to me and beg for money and I will cancel them.
Jose
October 20th, 2009
6:13 pm
To be truthful, the economy started to tank in 2000 from the inflated tech stocks. Housing prices started to go through the roof then and kept going up. In neighborhoods that value were only $50K start selling for $100+. Up until this time, banks were very tight on housing and their values in the communities. When the war came along, the only thing that was going good for the economy was the housing market. Go back and listen to the news of that time. Everything was over rated and over priced but people were so in to the price rather than the value of what they were buying. Banks had a major role in this picture. When you saw people from the hood to purchase a big home, you knew something was wrong with that picture. They didn’t pay their power bills on time and you wondered how in the world would they be able to pay a mortgage on time. This scheme was successful for the banks and they moved forward to Main Street. They flooded your neighborhoods with bad loans with inflated values. You sitting there thinking that your value in your home was high and here you go out and get loans on the equity. What a mastermind plan. They lobbied Congress to get into real estate but fail. When they failed, this was their answer in getting into real estate. Now, they have the money and property and they are calling their own rules. Also during this time since everything was going up, people didn’t count on their local governments in raising their taxes, power companies raising rates, school taxes increasing, homeowners insurance increasing, cost of materials to maintain the property, etc. Everybody had their hands in your pockets. Banks gave you the money to buy the homes and a credit cards to fill them up with junk. Life was good. Or was it? You all lost your sense of reason with your finances. It doesn’t take a highly educated person to know that the banks were doing you wrong. Banks were doing this before the beginning of time. It’s just a different day with a different fool to fool in taking their money. At this point, hold on to what you feel is important to you and your family and hell with the rest. Life will be much easier for you. The people that purchased their homes prior to this period and didn’t refinance after refinancing to refinance again, gotten equity line of credit, put unsecured debt onto secured debt, or used their home as a cash cow are the ones that are sitting mighty pretty today in this economy. This is what home ownership was meant to be. I enjoy the title of being cheap but I enjoy the free and clear title better.
ihorizon
October 20th, 2009
6:28 pm
I agree with Jose, I remembered on my first home right after I married that I was giving a loan 30-yr fixed at 8% and noticed that by the time the loan would be paid in 30 years the bank would have received a gain about doubled or triple my home value whereas I then understood I could have had another house or two by giving the princinpal rather than the interest to the banks. Fortunately I sold the house to move into a better neighborhood and school district and my loan is now more in line with the value of the home with low interest rate due to refinancing.
Fine Print
October 20th, 2009
6:38 pm
If the credit card issuer (company) cancels your card, it DOES NOT affect your credit score. Only when YOU cancel the card does it change your score.
mitzymy
October 20th, 2009
6:39 pm
The credit card companies are crooks from the heart. They play with your mind. My cards have not been canceled, but they did lower the amount I can get with cash, although the credit limit remains the same. You cannot rent a car, reserve a hotel room, and sometimes get an airline ticket online, without a credit card. I try to use my debit card as much as possible, and make sure the money is there. Long ago, you could deduct the intrest on your tax return, but that was stopped, so now it is all yours. My highest intrest rate is 19.99, and my lowest of the 2 is 12%. I am working on the lowest which has a balance of 1900, with the highest balance being 4000. They can do whatever they want to do as long as they give you a notice. I am getting out of their pocket.
GA Girl
October 20th, 2009
6:45 pm
Noah, just because you file bankruptcy doesn’t mean you lose your house. Most houses don’t have an equity now that the market has tanked and therefore the trustee won’t take it. You file bankruptcy to get rid of unsecured debt. With the companies that received a taxpayer funded bailout, it’s like you are paying them twice; once with your taxes for the bailout and again in your regular payments. No thanks!
Bigrue
October 20th, 2009
6:47 pm
Each person that has mentioned the credit to debt ratio is absolutely correct as it does affect your credit score. It is not that they did it in as much as how they did it. I think it would have been a good practice to a loyal/faithful, paid as agreed consumer to at least let us know. This is what I think we are forgeting. BofA will loose me as soon as my mortgage is done. If they had told me they were reducing thier credit exposure I would have apprecited the call but the CSR rep lied and said they tried to call me after I asked how they made the decision on who to cut. They even reduced a credit limit on one of my cards saying I did not use it anyway….WOW
Ben
October 20th, 2009
6:51 pm
Typical. The government makes a new regulation, and in order to both comply with the regulation and make a profit, credit card companies have to make some cuts. And you blame the credit card companies instead of the new laws and their unintended consequences. This is another case of politicians nosing around and messing up everything for the very people they claim they are trying to help.
Let me clue you in. Corporations exist to make a profit, not to serve you. If politicians make laws that raise the cost of doing business for those companies, those companies will pass that increased cost on to consumers, not just decide to take a loss so they can keep serving you.
The only unfair thing in all this is that the credit card companies get the blame for something the government caused.
Sleepy
October 20th, 2009
6:57 pm
The more CCs canceled, the better – for both the bank and the consumer. The heck with religion, credit is the opiate of the modern American masses. (OK, credit AND “reality” TV.)
Spend less than you have, save the rest. America will become a true economic power again. The debt society is sinking us in a hurry – I want it NOW and I don’t WANT anything out of my pocket. Bloody spoiled brats dragging us all down.
Jose
October 20th, 2009
6:59 pm
The shorter the mortgage period that you take will be better. I wouldn’t take a 30 year note even if it was at 1% rate of interest. The quicker you get them out of your pockets, the better that you will be. Credit card companies fear that consumers will run up debt and not pay. This is the reason why they are closing accounts. Their stocks have taken a dive since of their high default rates are being posted. You may not be in default but it will cost you still if you are doing business with them. You are better off getting another credit card with a bank that is performing according to the Feds. You can check your bank’s rating. Do business with people that are going to treat you with respect no matter what. Tough times doesn’t last forever but how you treat your consumers doing tough times will determine rather or not you will be around when better times come back. I always say that if you have to treat somebody wrong, it’s a matter of time that you will treat me the same way. Just like this economy, it ran out of people to fool or they couldn’t play the game any longer of taking people’s money. Before it’s all over with, the credit card companies will have to come back to being reasonable or they will be out of almost everybody’s pockets. Trust is priceless and when you don’t trust your bank any longer, you won’t do business with them even if they gave you a gold bar.
Martin
October 20th, 2009
7:05 pm
If this scares you, it’s a sign that you have got money problems.
NewsFlash: Available credit is not the same as cash on hand.
Katie
October 20th, 2009
7:19 pm
If it saves me from paying a high interest rate on my cards then I have no problem with it. They should also look at spouses of people who have claimed Bankruptcy and have had foreclosures. It will only be a matter of time before those people go bad as well.
Larry
October 20th, 2009
7:22 pm
Credit is not a good thing…it means you are in debt!
If you can’t buy it, don’t get it!
Ever thought how much a house would cost if there was no such thing as a mortgage? A whole lot less!
Free yourself and live debt free!
Donna P.
October 20th, 2009
7:24 pm
Like “Chuck” above, my Providian/WaMu/Chase card were canceled for no reason. I called them and asked why since I was never late and I had no balance on them (both cards had $5,000 and $6,000 limits respectively), they said I was a credit risk since I could run up my balance to the limit(s) at any time. None of my other cards are even close to my limits and I have a credit score average of 790. It looks bad on my credit report which I have had since 1987 with my first car loan that they closed my accounts. It sucks when others ruin their credit and it affects people like me with good credit!
Michael
October 20th, 2009
7:28 pm
All credit cards should be canceled but the bloodsucking banks won’t do it. If there were no credit cards people would think before they buy and prices would stop going up since there would be a natural ceiling on how much we could buy. Anyone heard of the real estate bubble built on easy credit? (Disclosure — I’m a bankruptcy lawyer who loves sticking it back to the banks Call 1800-screwbanks).
Jose
October 20th, 2009
7:37 pm
This generation of bankers, CEOs, CFOs, investment bankers, and Wall Street were more evil than the character named Mr. Potter. They really knew who hands to gease, who to keep quiet, and who to destroy at the expense of the American people. If you have money problems, then I have them too because I am going have to kick in and pay the increase difference. Just because somebody is in default doesn’t make it okay for me. Chase call this market conditions to raise the rates. Forget having lower balances, no balances, paying as agreed, paid in full status, or a high FICO score. It doesn’t matter to them. As long as FICO exist, we all will need credit scores to function in this financial market. You need them from water bills to housing. For the ones that are on the wrong side of the eight ball, there are sunnier days ahead. Just hold on. Mind over matter and it doesn’t matters anymore, just hold on to what’s important to you and your family.
dan
October 20th, 2009
7:54 pm
Yes, my Bank Of America card was canceled. They said that I had too much credit. I used the card every day, never late, and paid my balance off monthly. I guess they were not making much money off of me.
rdh
October 20th, 2009
7:59 pm
Here’s the problem: When banks cancel your cards, they are no due immediately. What it does do is to raise your debt to credit ratio and reduces your credit score. Let’s say it is your only CC. Suddenly, you have debt but no credit. This whacks your credit score and prevents you from getting more credit… all no fault of your own, Then… you can’t buy anything, you can’t rent a car, you can’t reserve a hotel room, you can’t do a myriad of things that REQUIRE a credit card…. all no fault of your own,. So NO, Credit companies should not be allowed to cancel your card. They should not be allowed to indirectly hurt your credit if you have been following the rules that were set by THEM.
rdh
October 20th, 2009
8:06 pm
p.s. for those who thing that all credit should be canceled…. no cars will be bought, no hotels will be reserved, no cars can be rented. There are a LOT of things that rely on credit in our society. Without credit cards, our economy grinds to a halt, and we truly would go into a Depression. Is that what you guys want?
Even if you plan on paying CASH for your airplane ticket, hotel and rental car, how are you going to make reservations? The entire tourism industry would die. The entire car industry would die. The entire hospitality industries would die. Tens of millions of people would lose jobs without credit cards… even if all of those tabs were ultimately paid for in full each month. So the next time you think credit cards are a huge evil, think of all the people that you come in contact everyday that would lose their jobs without the ability of a customer to use his card and pay it off at the end of the month.
Drew
October 20th, 2009
8:09 pm
I’m sorry, but my two credit cards (which I pay in full every month, spending far less than my take-home pay) are nine and ten years old, respectively. Do you think I really remember the fine print that I agreed to in 1999? Every word of it? Come on. Thankfully it hasn’t been an issue for me, but hopefully I won’t have my cards mysteriously cancelled before my vacation later this week… speaking of which…
Do these “no credit card” rubes on here ever travel? Like “Not For The Ignorant” said — credit is for grown-ups. If you know how to budget, you can use credit cards to your advantage — they sure beat carrying wads of cash around, and they offer consumer protections that debit cards and cash do not. And though I’ve never tried, I imagine it’d be pretty inconvenient to attempt air travel without a credit card.
Ben is right – “Corporations exist to make a profit, not serve you.” That’s why we have a *government* – to SERVE US. Time for it to do a better job. Usurious, exploitative “contracts” are a disservice to the public, and frankly, a scourge on “capitalism” – capitalism works better on a level playing field than when the rules are skewed to favor one side or the other. Requiring advance notice of credit card cancellation is not that much to ask.
And one last point – “free markets” are a joke – without binding rules, there are no “markets” as we know them – there is predominantly chaos. Let’s see what kind of “market” system America would have with all the laws and infrastructure (courtesy “evil” government) removed. (Somalia, anyone?)
Erik
October 20th, 2009
8:20 pm
To the people who are saying that the government should stay out of their business, I want to point out that bad business is exactly the kind of regulation in which the government should be involved. Any capitalist system demands it.
If a bank allows you to build up and carry a large revolving balance that is still within your limits, and you’re performing your responsibilities by making timely payments, then the bank has an equal responsibility not to suddenly call the entire balance due. Doing otherwise is bad business; bad for the consumer and bad for the country.
After all, could you imagine the consequences to yourself (and the entire economy) if your bank could suddenly demand full payment of your mortgage, just because it suddenly had a bad feeling about you? Such outlandishness is not something that happens in a true capitalist society because there is no “free enterprise” in any system that just assumes the most powerful players always to be right.
bama313
October 20th, 2009
8:30 pm
In my opinion, there is a major drawback for me due to my current situation-I’m a recent college grad with only a few years of credit history. The longer you have a credit card open that shows you have paid your bills on time, the better credit score you have. (Well in my case anyways) For people like me and my fiance, (saving every last penny because we are trying to buy a house) having my credit card showing that I have had it for a long time with great payment history is really, really helpful. I am praying that my two credit cards do not get canceled bc I have really worked my ass off for many, many years to make sure they are paid on time w/ no revolving debt. (when you are in college working for practically nothing and then living off of an entry-wage salary while trying to pay off student loans this is quiet a hard task!)
Jose
October 20th, 2009
8:38 pm
In a bad economy, eveybody is worrying about a FICO score. The hell with it. If a business needs your business to stay open, they will accept your cash or any other method of payment. Here’s the problem. Credit card companies force businesses to do business this way. They only way that they would accept your payment is through a credit card. I simple refuse to do business with those types of business and I am not broke or high in credit card debt. It’s your choice in the way you are going to spend your money. If they won’t take your method of payment, then that’s more money in your pockets. Hotels and car rentals are hurting for business. We fail by letting big business tell us how they are going to take our money for their under valued services and faulty products. No, you tell them how you are going to pay or let them take the highway for a change. Business doors are opening and closing everyday, just pick the ones that are going to do right by you and your family. Just because you have an account with them doesn’t mean that they own you. They allowed credit card companies to dictate how they do business for their consumers, now it’s time for the consumers to dictate how they are going to do business with them without the credit card companies. If this game doesn’t change, our kid’s kids will be in the same situation like we are in today with big credit card business. FICO doesn’t want you to have no debt. You are unknown and not credit worthy without FICO scoring. Been there, got rid of credit cards debt when we couldn’t add the interest to income tax return. So for those ones that are thinking debt free, well you are fooling yourself because you will pay more without a score. Had to work back to a score after decades of freedom. A little old school. Save and pay for what you need and finance the big things like a house and a car. They weren’t making money this way off people like me so that’s why the credit cards were push so hard into our financial world. This is a money game and if you can’t keep up, then you will be jack.
Fine Print
October 20th, 2009
8:40 pm
You people can’t seem to listen so I will yell … A CREDIT CARD COMPANY CANCELLING YOUR CARD DOES NOT AFFECT YOUR CREDIT SCORE. There is something else that is causing your credit score to be lowered but that credit card being cancelled is NOT the problem!
BravesFan79
October 20th, 2009
8:43 pm
I did a focus group for a credit card company a month ago… and they said in the future… there will be NO cards that dont make you pay a annual fee.
They are trying to instead offer gimics and promotions like frequent flier miles…travelers rewards… etc.. I think this is a TERRIBLE thing! Screw all the free promos that im not going to use anyways!
Especially for someone like me that just uses them for emergencies like if im going a few weeks bt pay checks.
BCATL
October 20th, 2009
8:49 pm
I think someone needs to remind Jennifer that business involved ITSELF with government first, and Citi was one of the worst offenders.
How soon we forget. About a year ago now, these banks cam CRYING to our government (meaning us) for a bailout, and we were stupid enough to give it to them.
So, since we saved these banks, we certainly have the right to regulate them to the hilt, and we should. They’ve wrecked our economy.
Boycott Chase!!
October 20th, 2009
8:49 pm
I had a WaMu card for a long time. Shortly after Chase bought WaMu, they cancelled my card. I had just refinanced my house, and completely paid off the card. I had always made my payments on time, and I always paid a lot more than the minimum payment. They gave me No notice. I went to use the card one day and it was declined. I was furious! When I called to find out why my purchase was declined is when I found out my card was cancelled. They tried to tell me they had recieved a bad credit report for me. This was a flat out lie! I had just refinanced my house so I knew what my credit score was at the time. It made absolutely no sense. I will never do business with Chase…EVER!!!
Nard
October 20th, 2009
8:54 pm
Fine Print: you are totally uninformed on this. A CREDIT CARD COMPANY CANCELLING YOUR CARD DOES AFFECT YOUR CREDIT SCORE. It increases the percentage of credit you are using (i.e. total balances/total available credit). Try reading this article to learn something before you post an ignorant comment: http://money.cnn.com/2009/08/24/pf/credit_score.moneymag/index.htm
Jay
October 20th, 2009
8:59 pm
I received a letter from citi yesterday stating that they are changing the rate on my plat. MC. The current rate is 5.9% they are changing it to 29.99%. Citi was kind to give me the choice to opt out of this change but if I opt out I will no longer be able to use the card. If I choose to remain in the program, I will receive 10% credit each month I make a min payment at 29.99% (for the record its not a gas card, I have never been late, I have always paid more than the min, and I received the card 3yrs ago).
GO CITI….I!!!
Glen
October 20th, 2009
9:00 pm
We canceled all our credit cards and sent them into Dave Ramsey’s show for destruction! We will NEVER have a credit card again. They were poison to our finances, and given the way the banks are behaving now, we are SO glad to be credit card free!