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Credit Tips: What to do When an Issuer Closes Your Credit Card

Written by Equifax Experts on December 9, 2013 in Credit  |   48 comments

Few things are more humiliating than trying to pay for an item with your credit card only to be told the card is declined. But in addition to the embarrassment this can cause you in a crowded store, the closed account can also impact your…

information on my credit reportFew things are more humiliating than trying to pay for an item with your credit card only to be told the card is declined. But in addition to the embarrassment this can cause you in a crowded store, the closed account can also impact your credit score.

A creditor may close an account because:

  • The card is inactive with no outstanding balance.
  • The creditor no longer offers the terms of the account.
  • The creditor has reasons that may go undisclosed but that can include an issuer terminating the account based on information in your credit report.

Learning that your account has been closed can be startling because card issuers aren’t required to warn you when they plan to deactivate a card or sever your line of credit. Creditors are able to close an account for delinquency, inactivity, or default with no advance notice. And when the account is closed for some other reason, it’s only necessary for creditors to inform the cardholder 30 days after the account is closed.

How does having this information on my credit report affect my credit score?

Even when an issuer closes an account, the closed account can still affect your credit score in a couple of ways. The closure affects the average length of your credit history, which factors into your credit score. If the closed account was a longstanding one, it could negatively affect your score.

Your credit score could also be affected if your credit utilization rate—how much of your available credit you are using—is too high as a result of the closure. For example, let’s say you have two credit cards, and each card has a $1,000 limit. One has no balance, and the other has a balance of $500.

If the creditor closes the inactive card with no balance, your credit utilization rate jumps from 25 percent to 50 percent. Depending on your full credit profile, this can negatively impact your credit score because approximately 30 percent of your score is based on how much of your total credit line is being used (with a high percentage being a red flag to some lenders).

What can I do if an issuer closes my credit card?

Once a creditor closes your card, there are a few steps you can take.

1. Get a copy of your credit report. Check and make sure the account is accurately reported as “closed” or “closed at lender’s request.” Also scan your report for outstanding balances, and take steps to pay down these outstanding debts. This can help decrease your credit utilization rate and positively impact your score.

Keep in mind that closed accounts do not simply fall off your credit report, and you should periodically check your report to ensure that closed account information has fallen off your report after a certain amount of time:

  • Closed accounts paid as agreed can remain on your report for up to 10 years.
  • Closed accounts that have been charged off can remain on your report for seven years plus 180 days from the start of the delinquency that led to the charge off.
  • Closed accounts in collections can remain on your credit report for seven years plus 180 days from the date the account first became past due.

2. Contact the credit card company. Ask for an explanation of why the card was canceled. Sometimes talking it over with a creditor can be enough to restore the account; other times the decision will stand.

Either way, by contacting the issuer directly you may be able to find out why the creditor closed your account—and you may also learn of any mistakes you made with this account that you should avoid in the future.

3. Take time to reassess your finances after the card is canceled. Whether your card was closed due to inactivity or because of late payments, it’s time to assess how you’re currently using credit. Should you be putting small purchases on your credit card and paying them off immediately? Or should you stop using your credit card entirely until you’ve paid down your outstanding balances?

After your credit account is closed, concentrate on adding positive information to your credit file. You can do that by paying your credit card bills on time, keeping your credit utilization rate below 30 percent, and making periodic purchases to prevent your credit card from lapsing into inactivity.

The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.


  1. Jennifer Keller says:

    Reducing your credit limit as you pay down your debt can help keep you from using your card on any more purchases while also reducing your credit score but is a good idea if it helps you to stay on the path to financial freedom.

  2. Kristy B. says:

    What happens when a creditor closes the account due a violation to the user agreement…it was not due to non payment or low/high usage. It was a small fine print in regards to where i was charging.

    • Rick says:

      This just happened to me on12/1/15 with Amex, does anyone know how this will show with Fico.

      • Heidi says:

        Yes, I have the exact same question. Amex just closed an account because I only had 14 calendar days to confirm my income, which just passed, I got busy and forgot to send the form in. But, of course my income is high enough, so they are idiots to lose me as a customer, as I always pay off my balance each month, but I want to know if this will affect my credit score negatively, since the issuer was the one who canceled it. The card does not even have a balance on them now, as I returned something and Amex now owes ME money since the closure??!! I’ll just take my business elsewhere but I’m going to be furious if my credit is affected. Anyone know?

  3. Anonymous says:

    what about when they close the account saying you hve some kind of legal action pending against and you get a copy of your credit report and go to your circuit clerk and the accusation is unfounded you have no balace and always paid on time and there is no legal action can you sue the credit card company for saying false information and ruining your credit score?

    • Anonymous says:

      Hi did you ever find out any information regarding what to do? this happened to me as well.

    • Autumn says:

      This just happen to my husband, when we call they refuse to give us a reason. he pays his balances in full on each statement, never a late payment. we have no idea why they closed the account. I could care less & never do business with them again just want to know why tho. The company is Chase, who was your cr crd issuer?

      • Tommy says:

        Chase just closed two of my credit card accounts and my savings and checking accounts and they won’t tell me why. I just paid off my mortgage that I had through them two months ago and have never been late or carried a balance on my credit cards. I was actually a Chase Private Client.

        Thanks Chase.

  4. Angela T. says:

    I think your Credit Utilization for closed account is incorrect…Either Equifax MUST only factor in the balance owed on the closed account in Credit Utilization or you must consider the original balance with available credit (which makes no sense)…My credit utilization is being affected by 16% because you are using the original balance to determine my credit utilizatioon rather than the balance owed….How will this be fixed.

  5. Amber Smith says:

    So what happens when your card has been cancelled out???is my money still in the bank is it that the card is cancelled bit and still can go inside the bank to get my money..

  6. nnnej says:

    I never used my card, and found out they closed it two weeks ago.
    Crazy thing is I just set up a appointment to go see a plastic surgeon thinking I was going to use my care credit card and they just closed it. Will this have negative effects on my credit? I also want to open it back up … will this be considered a hard inquiry or will it just open back up with no effects on my credit?

    • Eve says:


      Did you ever get a answer to your question? Care credit just did the same thing to me.

    • Craig says:

      For those of you with Care Credit, the interest rate on that card is so high that closing the acct due to inactivity really was a favor. Yes your credit will take a hit, but it’s much better than paying exorbitant interest rates. The mistake was opening an account with Care Credit. We live and we learn.

  7. J Sanchez says:

    My card got cancelled because I was delinquent on my payments. I’ve started paying off my card to the point where it is current, but the account is still closed. Is there a chance it can be reopened again?

  8. Patty says:

    My credit card was closed due to inactivity. What can I can I do to have it not affect my credit score?

  9. Kay says:

    I have a card that will be closed soon for inactivity. It’s a department store credit card that I don’t use or want. I only opened it when I got a nice discount for buying a riding lawn mower. When I got the first statement, I paid it off completely. Haven’t used it since. I received a letter from the company giving me the opportunity to use it or my account will be closed. If I don’t use the card and let it close, will my credit be affected?

    • Anonymous says:

      Yes, your credit will be affected. You should consider keeping all your accounts open so your score is not reduced. Make a small purchase every few months and pay it off right away. The only time I would suggest closing it is if you are not disciplined enough to pay of what you charge. In that case, it is better not to have open credit lines. It sounds like you do not have that problem though. Keep it open!

  10. Anonymous says:

    I have a card that was closed because I couldn’t pay the minimum. I asked for a deal in writing and not by phone. I have like 9,000 to pay and can only afford 20-30/month.

    What is the worst thing that could happen in this situation???

  11. Denise says:

    If my credit card was closed by the company, but I still have a balance, do I need to keep making payments on this closed account that ill never use again.

    • Josh says:

      Yes you need to keep making your payments

    • sandran says:

      just learned this afternoon that my credit card with chase was cancelled because after a review of my checking account the bank is closing my checking account and therefore they will closed my credit card also. i still owe some money. will this affect my credit as they closed and not me

  12. Esmine says:

    My account was closed and I paid off the remaining balance. This was the only card I possessed. I am a young adult attempting to build my credit back up. How long should I wait to open a new account?

  13. wendy says:

    My credit card was closed due to inactivity. What can I can I do to have it not affect my credit score?

  14. Jen says:

    I have a credit card and unfortunately missed payments and now it is closed. What is my best advise as I can’t afford to pay the entire thing off at the moment.

  15. Laura says:

    My Capital One account was closed because my husband died, he was the primary cardholder; I was an authorized user. I notified the bank when he died and they made me the primary. Three years later they say that they made a mistake, my account was closed and I should notify any regularly scheduled payments. Because Capital One said it was their fault, I should have not been able to use the card after my husbands death, they forgave the debt. I was told me it would be closed with paid in full pays, as agreed and NO 1099. They have written off part of the balance and now sent me a 1099. They cannot explain how they arrived at the amount on the 1099. After several calls I am told that I was not responsible for the debt but because I used the card they are reporting it as income to the IRS.
    How can I not be responsible for the balance on the account and get a 1009 for the amount that they have written off?

    • Lauren says:

      I once got a 1099 for receiving an ipod for opening a new account at a bank. Other than specific exemptions, any money, goods or services you receive are tax liable.

      My guess is they forgave whatever charges you had accrued on the account since your husband’s passing. It’s probably reported kind of like a gift from the company. The debt that was there before he died was erased and not included on the 1099 because it was technically his debt and you’re not liable for that, so that’s why the amount on the 1099 might not match the total balance they wrote off when they closed the account.

  16. Anonymous says:

    JcPenny closed my account after only 4 months and I only used the card one time. My limit was set at $200. I revieved my first statement 2 weeks after my first payment was due. When i called to pay. JcPenny wouldn’t accept my payment until I spoke to the fraud dept. Im like WHAT!!! So I was transferred. They would not accept my payment till I provided them proof of my identity: so I did. It wasn’t until the 2nd week of February that my payment was received for January and February. For the next two months I was still receiving a hassle to make payments. Payments we’re being drafted from my checking acct by the merchant. However, not one payment was being applied towards my balance. I finally wrote a letter to JcPenny and GE MONEY. I received a letter at the end of April that my card is to be cancelled, also my Old Navy and American Eagle. My May credit report showed “closed-Never late with a balance of $235. So I contactef JcPenny to pay this balance off. I was told by an associate that they no longer have my account. To contact GE Money. I did and received the same run around. I uploaded my July report and what do I see? JcPenny placed under negative with a balance of $375. As of today, the balance has risen to $503. Im likecwhat is their problem. I will pay the $235 and get it over with; as long as JcPenny & GE Money remove off all reporting credit bureaus.

  17. jwright says:

    My account was closed and I have one payment left to make. Do I need to call the creditor and have them report that I have made my payments. The payment status on my report says “No payment history has been reported by this creditor”

  18. dmary says:

    If the creditor closes the card with a balance remaining, and I continue to pay off the balance, my payment history won’t be reported to the bureaus? And will they still charge interest?

    • Anonymous says:

      Yes interest will still be charged and it will be reported on every 30 days. This happened to me because of delinquent payments. I have recently paid it off and they are still reporting on it. Just continue to make the payments as it is going to effect your credit score regardless.

      • A. N. says:

        I just had a credit card cancelled 2 months ago. They didn’t notify me and when I looked at my statement I noticed it said I had no credit available. This card I pay on time every month. I called and was so annoyed it was because of my credit history. I’m working to get everything paid off within the next year. I’m never opening another Citibank credit card again though.

  19. Moe says:

    I closed up my secure credit card and got a new one from the same bank, there was 0 balance while I closed the secure credit card. I started using the new one: cash reward credit card. Will this affect my score? Thanks

  20. Michelle says:

    How long is a credit card issuer required to wait before reporting closed accounts to the credit bureau?

  21. Merri says:

    We have a home improvement card with Wells Fargo. My payments are automatically taken out of my bank account. We have not missed a payment, nor not paid. We got a letter day ng they were closing our card. When we called, they said that decision was made in Dec. of last year. In January we used the card, and our payment went from 91.40 to 119.25. NO payment has ever been missed or late. What can we do, they have no reason to close the card, payments are automatically taken from Bank account. And they are hurting our credit score! That is unacceptable

  22. Julie says:

    No there is almost no chance your credit card will be re opened once closed you will have to reapply and if you have bad credit you won’t get a credit card. It’s really is sad people need to resort to credit cards. I have a college education and work full time and a 2.00 coffee is a luxury for me and I save but it always gets drained do to keeping up maintenance on my used car, I buy furniture and even buying a new toilet would be a whole years worth of savings. Don’t feel bad about yourself in any way everyone in my workplace has the same issues. Again in most cases it is not a matter of being an overspender but on my budget a 2.00 coffee a day is a luxury it is emergency money I need and sometimes I don’t even drive my car no gas money and I work as hard as anyone. So don’t feel bad in any way eventually the economy will stop functioning this is for sure

  23. Nicole says:

    Dell closed my account and I have an outstanding balance that I’m paying on. Once it’s paid off will it drop off of my credit and my credit score get better?

  24. Brian says:

    I never understood why people choose to use “anonymous” for their title. its such a long and ugly word. There is also a big chance of screwing up the spelling and having to correct it… All just a big waste of time. it also seems as if you’re hiding or something. its very unsettling. Here is an idea, since technically you are already anonymous and don’t really need to broadcast your desire to be, just use a short name like bob or phil. it serves exactly the same purpose, its not as creepy and much easier to spell. I think its time we put “anonymous” to bed. For good. thanks and you’re welcome.

  25. Eduardo says:

    Do I have the right to get an explanation from the credit card company about the reasons for the unexpected and apparently without motivation closing of my account? If not, how can I know that it has been closed without violation of USA laws, such as the equal opportunity and no discrimination laws? Has the bank the obligation to answer a request in this regard, as recommended in the article?

    “2. Contact the credit card company. Ask for an explanation of why the card was canceled. Sometimes talking it over with a creditor can be enough to restore the account; other times the decision will stand.

    Either way, by contacting the issuer directly you may be able to find out why the creditor closed your account—and you may also learn of any mistakes you made with this account that you should avoid in the future.”

    Thanks for your help,

  26. Jay says:

    I opened a Store card at Rooms to Go furniture store and made one very small purchase. Less than $1000 on a card w/$8000 dollar limit. 30 days after my purchase, I received my statement and the store is going with G.E as the card older and my current card will be closed. I’ve continued to make payments to pay the balance off and I just pulled my credit report and the card is reflected as closed on my credit report. How will this impact my credit rating?

  27. Ravi Kumar R says:


    Need ur help in assisting me with reopening of my credit card procedure….

    My credit card was cancelled by the issuer due to non payment, now I have made the complete payment and it’s Zero due..

    Is there any way I can re activate my credit card and improve my credit ratings.

    Thanks in advance.
    Ravi Kumar R.

  28. Amin says:

    I recently got approved for an amazon credit card. I received my first statement and paid it off. I tried to use the card tonight for a purchase of $60 and it got declined. I called the issuer and they told me that based on my credit history (my score is really low and have three derogatory in the file) they had to close my account. Can they do that?

  29. nick says:

    co said I requested closed – NOT true!

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