Can you reopen a closed credit card?

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Dear Business Banter,

I put my food truck in the garage but I’m starting it back up. I thought it was all over so I closed my Chase Ink card. Now I want to start my truck up again. Should I go back to Chase and ask if they will reinstate my card? It has a $750 bonus so can I get that even if I had the card before? – Sam

Dear Sam,

Let’s get you rolling again!

So you’re wondering, “can I reopen a closed credit card?” Unfortunately, the answer isn’t a simple yes. If the issuer revoked the account because you were behind on payments or it went into default, that option won’t be available. There are other factors to consider, too, so here’s what you need to know.

How to reopen a closed credit card account

Not all credit card issuers will allow cardholders to reopen credit card accounts that they closed, but Chase does. The general rule is that it can be reopened within 30 days of when you closed it. Even if that timeframe has passed, it’s still worth a try.

Call the customer service number and explain that you want to reinstate the account you had before. Be prepared with the account numbers and your personal information, such as your name, Social Security number and address. (The representative can pull it up as well, but it’s better to be prepared). You may need to authorize a hard credit pull to confirm that you’re still qualified.

I’m afraid that big welcome bonus won’t be available, though, because you’re already a cardholder.

Stick with the old issuer but get a new account

An alternative is to apply for a new account with Chase. I’m not sure which card you previously had, but the welcome bonus you mention is currently available for two of the issuer’s credit cards: Ink Business Cash® Credit Card and Ink Business Unlimited® Credit Card. Both are cash back cards and share a number of similarities, such as no annual fee and a 0 percent intro APR on purchases in the first 12 months. To claim the $750 welcome bonus for either card you’d have to spend $7,500 within three months of opening your account.

The main difference between the two cards relates to the rewards rate. For the Ink Business Cash card, the rate is tiered. Depending on what you purchase, it will be 1 percent, 2 percent or 5 percent back. On the other hand, the Ink Business Unlimited offers a flat 1.5 percent cash back on all purchases.

If you qualify (each requires good to excellent credit) and like the sound of whichever card you didn’t have before, you may want to apply for that one instead. Be aware of Chase’s 5/24 rule: if you opened five or more personal credit cards from any issuer within the last 24 months, you will likely be denied, regardless of your credit score.

Consider a new credit card issuer with new cards

I recommend that you explore the wide world of business credit cards before deciding on reopening the old card or even sticking with the same issuer. If your credit rating is attractive and you have the financial means to support the credit line, there are plenty of other issuers and credit cards. Some may be more appropriate for your needs. You don’t have to choose just one. Very often a few accounts in rotation are the right way to go.

It sounds like you want a rewards credit card that comes with a welcome bonus. Some are cash back, while others let you accrue miles or points. The amount you have to spend within the fixed timeframe is usually higher when the bonus is bigger, so think about how you can meet it with purchases you would need to make anyway. You don’t want to be in a position where you can’t hit the minimum payment and then lose out on this reward. Nor do you want to overspend to make the minimum and then not be able to pay the debt off quickly. The interest charged on carrying debt over time will likely outweigh any rewards benefit from the spending.

Another compelling factor when shopping for a business card is flexibility. You may want a period of time to charge and pay less than the entire balance without interest being added. Check out the best 0 percent APR cards that also offer a welcome bonus.

After that, review the rewards and perks that are built into the different cards. For example, if you’ll be spending a lot on fuel, one that gives the highest reward rate at the pump may be particularly compelling.

Next steps

So can you reinstate a credit card that you prematurely canceled? Maybe, and if you do there could be a credit reporting boost in your future. The account would show up as the same trade line on your credit reports as it did before, without a break in the data stream. That shows longevity, which other lenders find appealing.

On the other hand, a new account will affect the length of your credit history, which will reduce the average age of your total accounts. That can lower your credit scores in the beginning. Then again, it can increase your scores by diversifying your credit mix and showing that you can manage different kinds of credit.

In the end, the most important consideration is that you have the best credit cards for you and your venture and that you charge responsibly. Over time your credit scores will rise, and by maximizing the rewards programs you’ll pave the way to a profitable food truck future!