What Is Happening?
Credit card companies around town are closing accounts so as not to expose themselves to the non-profitable risks they face due to Covid-19. Cardholders that have their credit accounts open, yet the card is hardly used, then banks are not interested to be exposed to the risk of leaving the card open when the account does not bring them any profit.
How It Came Down To This Point
Credit Card companies make their big bucks on interest. If people aren’t using their cards then there are no benefits for the company. They then fear that at a point when the cardholder will lose his/her job, they will then jump in and start maxing out their credit card and have no way of paying their bill. That is the biggest risk since those are not profitable to the companies.
Banks We’re Talking About
At HelpMeBuildCredit.com we got reports from account closures at the following banks: Chase, Barclays, Citi, and Capital One.
How To Avoid Your Account Being Closed
The number one thing for you to do in order to avoid having your account closed is to use your card monthly. It doesn’t have to be used for your everyday shopping or for a big purchase. Use it for auto pay on a bill or swipe it for a low amount. Do this so that your card looks used and gets to stay open.
Too Many Accounts To Use Monthly
If you can’t swipe all your cards monthly then rather reallocate the credit limits to cards that you do use so in case you get shutdown you at least saved the credit limit from being lost.
Also, be careful with your three oldest cards, as if they get closed down your credit score may be impacted.
Hoping you will have an inconvenience-free account!