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  • Bob Brooks

Can a Credit Card Company Close My Account?

Dear Bob,

Can credit card companies decrease your credit line and even close your account? Also, if they do that, how will that affect my credit score?

The devil is in the details, as they say. The problem is that most consumers don't read the details. This is how the process occurs. You sign up for a credit card, and you read a few paragraphs of disclosures mainly about interest rates. The real disclosures come in the cardmember agreement, which is anywhere from 12 to 18 pages. You typically don't receive this in the mail until after you use your card. The irony is that by using your card in most cases, you agree to the cardmember agreement that you haven't even read yet.

If you took the time to read the agreement, you would conclude that a credit card agreement is the worst consumer contract of all time. Here is a sample of what you would find:

ACCOUNT CLOSURE At any time, for any reason, we may take any of these actions subject to applicable law: a) close your Account; b) suspend your access to new credit; c) reduce your credit limit; and/or d) not renew your Card. If we close your Account, you agree to destroy your Card(s) and any unused credit card checks. If your Account is closed for any reason, the terms of this Agreement still apply to Account balances until your Account is paid in full.

Account closure at any time, for any reason.... that pretty much sums it up. Yes, they can do pretty much what they want. So keep a close on your credit card. If the credit card industry starts to see a wave of defaults coming because of this pandemic, they will more than likely exercise their right to reduce their risk by closing accounts, reducing credit limits, etc.

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