Can you reopen a closed credit card?

By: Sr vini

Sometimes we get new credit cards which come at discounts & so many offers. The old credit cards get dust in the drawer & ultimately, they become inactive or closed. But, the old credit cards sometimes make us think about their importance & how much they were beneficial for our financial activities. So, we think to reopen those closed credit cards. But can you reopen a closed credit card?

Actually, the answer can be both ‘yes’ and ‘no.’ It totally depends on why your card was closed, how long the card was closed & also on the credit card issuer. So, whether your account will reopen or not will, you have to assess these reasons & need to take some other actions too. 

Let’s get to know in detail about the reason, how to reopen credit card & also whether you should close a credit card or not. 

Can you reopen a closed credit card?

Whether or not you can reopen a closed credit card account will be determined by the credit card company, as well as the reason for the closure and how long ago it occurred. It’s possible that the credit card company will reopen your account, but there’s no guarantee.

Whether you have chances of reopening a closed credit card, you need to assess basically why it was closed.

Why the account was closed?

Credit card issuers might have canceled your account even if you didn’t. They have the power to close your account. The reasons can be:

  • Default on bill payment: If you haven’t been able to pay your bills, your account could be closed. That doesn’t mean your debt is gone. You still owe the money, but you may now owe it to a debt collector.
  • Inactivity: If you don’t use your credit card for a few months, the company that owns it might close your account because it’s been so long.
  • Drop-in credit score: In the event that your score drops, it raises the question of whether or not you are experiencing financial difficulties. This raises the suspicions of financial institutions that you’re a high-risk customer, and they may close your account.
  • Change in credit card issuer’s policies: There may be changes in the credit card policies of the company & now you don’t fall in the category of having a credit card. 

If the issue is defaulting on bill payment or a drop in credit score, it might be difficult to reopen a credit card. However, if it is due to inactivity, then chances are high of getting the credit card to reopen. 

However, you can still contact the company in case of default or credit score drop; they might think of reopening the credit card. 

How to reopen closed credit card account?

Whatever the reason for your credit card closing, you can still ask to reopen the card. Some credit card providers allow cardholders to restore closed credit card accounts, but not all. It’s usually a good idea to make the request within 30 days of a credit card closing. You need to follow these steps if you want to reopen your credit card:

1) Gather all documents & information

You should keep these documents & information handy: 

  • Your name on the ID
  • Your address on the ID
  • Your Social Security Number
  • Physical credit card if you still have it.
  • Statement of a closed credit card. 

2) Call the service number of the card issuer.

Call the card issuer by checking the number on the back of the card or by searching for the number on google. Follow steps in the call, and reach to the conversation with the company’s executive. 

3) Ask for card reopening.

Once you’re on the phone with customer service, tell them that you want to reopen your account. Explain why you’d like to reopen a closed account if you were the one to close it in the first place.

On the other side, if the reason is due to default on payment or decline in credit score. Then explain to them why this happened. Moreover, tell them that you will pay the outstanding amount or work toward improving your credit score. 

Prepare for a “no” because credit card issuers aren’t compelled to reactivate accounts that have already been closed.

Read Also: My Bank of America Credit Card Application Under Review, Why?

When you shouldn’t reopen a closed account?

Reopening a closed account may not always be worth the bother. For example, when a credit card issuer closes a card because of inactivity or failure to accept new terms, you might use this as an opportunity to apply for a new credit card.

There are several credit cards out there that offer rewards and other benefits and new card sign-up bonuses.

On the other hand, if your card was closed by the issuer because you didn’t pay, you might want to wait a while and work on your credit before reopening the card. 

What should you do after reopening the credit card?

To make sure that your credit card doesn’t get closed again, you should take a few steps. Card issuers sometimes close cards because you don’t use them very often. One way to keep a card active is to pay for a subscription or other charge that comes up every month.

Make sure you don’t spend more money than you can afford with a credit card.

Is it bad to reopen a closed credit card?

No their nothing bad in reopening a closed credit card. It actually decreases the effect of the closed credit card. When you reopen that credit card, your credit utilization percentage will decrease, resulting in a better credit score. 

However, if you will close the credit card, it will impact your credit score. A closed credit card might raise your credit utilization percentage because it reduces the amount of credit you have accessible.

Credit utilization ratios can be lowered by obtaining a new card, reopening a credit card, or seeking a greater credit limit on existing cards, so long as you have acceptable credit.

Read Also: what happens if you don’t use your credit card

Bottom Line

If your card issuer reopens your credit card, then it is a win-win situation for you. You will get extra credit, and your credit score will also not take a hit. Moreover, be sure to use the card to avoid getting closed again. 

We hope your found this article helpful & got a satisfactory answer to your query, ‘Can you reopen a closed credit card?’

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