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Credit Card Companies Decreasing Credit Limits, Closing Accounts Without Warning

Posted at 9:24 PM, Apr 24, 2020
and last updated 2020-04-24 22:25:35-04

Credit cards are becoming unreliable during the outbreak. Some borrowers notice slashed credit card limits or their accounts closed altogether. This is happening now because of the risk involved with so many unemployed people.

Matt Schulz, Chief Credit Analyst for Lending Tree, said, “As unemployment grows and as this whole thing gets more unpredictable, it’s a natural reaction from banks to minimize the risk they put themselves in.”

Schulz says closing accounts or downsizing credit limits are more likely to happen with unused cards.

“Banks make money off of fees and interests off of used cards. If that card is being used and is generating revenue, it might be a little less likely to be on the chopping block,” Schulz said.

If a card is chopped, Schulz recommends asking issuers to reconsider or get another credit card.

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