Woman in cafe using credit card for online payments
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Learning that your credit card account has been shut down by your issuer can be a tough blow and a major inconvenience. Losing access to a credit card means having to turn to other purchasing options and reconfiguring any automatic payment systems you’ve set up.

What’s more – issuers don’t have to give advance notice if they close your account for reasons like delinquent payments, default or inactivity, according to the Equal Credit Opportunity Act. In fact, they have up to 30 days after closing your account to notify you.

A closed account can be bad for your overall credit. It reduces the amount of credit you have available (raising your credit utilization ratio), shortens your average age of accounts and changes your credit mix — all factors that play into your credit score. A lower score can make it harder to open new credit accounts and qualify for competitive interest rates in the future.

Here are some reasons an issuer might close your credit card, how to prevent your account from getting shut down and what to do if you think your credit card was closed by mistake.

5 reasons credit card issuers close accounts

While some account closings come about due to your bad habits, a few happen for reasons beyond your control.

1. You don’t use the card

Every cardholder costs issuers money. Even if you don’t use your credit card, issuers have to make sure funds are available in case you need them, says Nessa Feddis, senior vice president and deputy chief counsel for consumer protection and payments at the American Bankers Association. This means that if you don’t regularly make purchases on your card, your issuer may close your account.

In some cases, issuers will send you an email or letter prior to shutting down your account, notifying you of your window of time to remain active. If you get one of those notifications, it’s a good idea to make a single purchase and pay it off immediately, so you can keep the credit account open.

2. You’ve breached the account terms

When you fail to adhere to the terms you agreed to upon opening your credit account—and yes, that includes making too many late payments—your issuer could cancel your account.

It’s important to read the fine print and understand your credit card account terms, but it’s also relatively easy to remain in good standing with your issuer if you practice responsible credit habits. Make your payments on time and avoid spending over your credit limit. Most people don’t mean to breach the terms of their credit card accounts – and while a single mistake shouldn’t hurt you, repeated mistakes could become an issue.

3. You don’t agree to new account terms

Thanks to the Truth in Lending Act, card issuers must give you a 45-day notice if they raise your interest rate or change certain terms of your consumer credit account (not including increasing the APR on variable rate cards due to Federal Reserve interest rate adjustments). While you aren’t obligated to accept the new terms, your card issuer may cancel your account if you refuse.

If you’re not willing to accept the credit card’s new terms, expect the account to be closed, Feddis explains. You still must pay any outstanding balance under the original credit card terms.

4. Your financial status has changed

You might have noticed the occasional reminder to update your income with your credit issuer. Lenders know that people’s financial circumstances can change, so they want to make sure they have the most accurate information. In some cases, they’ll use that updated information in your favor—to increase your credit limit, for example.

However, they also want to know when your financial situation has changed negatively. Card issuers periodically review your credit reports, explains Feddis. These reviews are “soft pulls” and don’t affect your credit score. However, if the review suggests that you may no longer have the ability to repay the debts—perhaps because of a record of late payments on another line of credit—the issuer may close the account.

5. The credit card is discontinued

Sometimes card issuers phase out particular credit cards, or a retailer goes out of business and closes its store credit card accounts.

You can’t control when credit card companies shut down their own cards, but you may get switched over to a new card automatically or your issuer may suggest another, comparable credit card.

How to keep your account open

The best way to avoid having your credit cards canceled is by keeping your accounts in good standing. Always make on-time payments and avoid maxing out your cards.

If there are several cards you want to keep open, use them at least once or twice per month, says credit expert, John Ulzheimer. “Make purchases you know you’re going to make anyway, like filling up your car or paying for your dry cleaning or auto-billing your cable bill against it,” he says.

If you’d rather use a rewards credit card to pay for gas, keeping those old credit cards open and active by using them on your cable bill or your Netflix subscription is a smart move. That way, you know they’ll stay active each month. Just don’t forget to pay them off.

You should also keep track of your credit report regularly to make sure it’s error-free. If you do find a mistake on your credit report, dispute it as quickly as possible. Credit report errors can lower your credit score and prevent you from getting credit in the future.

Lastly, keep your new credit applications to a minimum. Requesting several new lines of credit within a short time period can indicate risk to lenders, and they may decide to close your accounts as a safeguard.

How to reopen a credit card account that’s been cancelled

Using credit responsibly is usually all it takes to keep an account open. If you’ve done that and your credit card gets canceled anyway, there may have been a mistake somewhere.

Call your bank or credit card issuer immediately. Find out why your card was canceled and ask if it can be re-opened. If your credit card account was closed by accident, continue calling until the problem is resolved—and be ready to complain to the Consumer Financial Protection Bureau (CFPB) if necessary.