Most people feel safe knowing that they have a credit card they can rely on in case of emergencies. These are credit card holders who sparingly use their cards and like to pay cash upfront to avoid debt. But when you’re travelling or face an emergency situation somewhere it’s good to know that you have a little piece of plastic that will save you.
What if you find out your issuer had your credit card cancelled when you need it the most? That would be a nightmare! Credit card companies have the authority to cancel your card and sometimes they will not even notify you prior to doing so. If you haven’t used your credit card in some time then you’re not making the company any money. This gives them more than enough reason to have your credit card cancelled. Other reasons may include:
- A drop in the credit score
- An increase in debt
- An increase in credit
- Market outlook
Whatever the reason may be if your issuer has your credit card cancelled at the time you probably need it the most you’ll be in big trouble. The following preemptive measure should be adopted to avoid facing such circumstances.
Avoid Getting Your Credit Card Cancelled
To dodge the unfortunate possibility of having your credit card cancelled the first thing you can do is keep an eye on the credit utilization ratio of your personal credit card. This ratio signifies how often you use your credit card. Most credit card issuers have a set threshold and if your credit utilization ratio falls below this number, they will have your credit card cancelled. This ratio is typically around 25%.
If you like to sign up for more credit cards at one time or like to have multiple cards on you for different purchases, make sure to keep up with them. The credit cards you’ve had for a longer period of time are more likely to cause a significant negative impact on your credit score.
Please know that even if you are extremely responsible with your credit card usage and adopt all preventive measures, your credit card may still be cancelled without prior notification. Always make sure to check the status of your credit card(s) regularly and especially before you head out of town/country.