On February 27, Credit.com released the results of a survey designed to identify the percentage of credit card users who had suffered some sort of adverse treatment from their credit card issuer. 33.7% of those surveyed said at least one of their credit card companies had done at least one, and sometimes more, of the following less-than-friendly actions to their credit card accounts:
• Increased their interest rate
• Increased their minimum payment requirement
• Changed their payment due date
• Lowered their credit limit
• Reduced their rewards program benefits or
• Closed their accounts
That percentage is likely to be higher than 33.7% because many of the others weren’t certain one way or the other. This survey, the first of its kind, quantifies just how many consumers are seeing their access to capital dry up. In many of the cases the action taken by the credit card company had nothing to do with negative performance by the cardholder.
Many consumers have stated that they’ve received letters or other communication from their credit card issuer stating that the actions were taken for the following reasons:
• Not enough usage
• Lack of any activity
• Negative credit reporting
• A decrease in their credit scores
Many of the actions taken by credit card companies will result in lower credit scores and the results underscore the importance of having other options readily available. I’ve always told people that you should have several credit cards as options. And, to ensure that they are not closed for inactivity, you should use them all periodically. This will help to insure you from credit damage caused by unexpected closures.
John Ulzheimer is a nationally recognized credit expert, president of Consumer Education for Credit.com and contributor to On The Money. Learn more about him at CreditExpertWitness.com.