Credit: Use it or lose it?
March 31, 2009
Consumers must feel like they just can’t win when it comes to credit cards right now.
Those who engaged in the overuse of credit cards and reckless spending with credit have been blasted for their irresponsible financial behavior. Many people have found themselves digging out of a mountain of credit card debt as a result. Now they’re scaling back their spending and trying to avoid plastic.
I always recommend people really consider how they use credit, especially if they are in debt. The best advice to someone who is struggling to get out of credit card debt is to pay down their balances and quit using the plastic.
Now, consumers who have cut back their card use are seeing a backlash from the credit card companies. There’s a good chance if you haven’t used your card lately, your credit issuer will close your account.
MSN Money recently posted this story.
If your reaction to this is anything like mine, it’s probably something along the lines of “What? Huh?”
We know that those who have been deemed risky customers are seeing their credit lines lowered and interest rates increased. But, now it seems if you’re what one might call a “good” customer who rarely uses credit and pays bills on time, you might not be able to keep your account at all.
The message the credit card companies are sending is basically one of use ‘em or lose ‘em. And a closed account will lower your credit score.
So what is a credit card holder to do?
Please keep in mind that there are no guarantees. The best thing to do is use your plastic wisely and cautiously. If you have a card that you want to keep and you haven’t used it in awhile, dust it off and use it. But, make sure that you only charge what you can afford to pay off at the end of the month.
Also, read your mail. I can’t stress this enough. If a change is being made to your account, your creditor will notify you in writing. The notification won’t help you prepare if it got thrown in the trash without being read.
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