Many people turn to credit cards to make ends meet, but some people are finding out that those cards were closed without their knowledge. That's especially scary for many people during the economic uncertainty caused by the coronavirus pandemic.
"The last thing you want is to have a potential safety net like a credit card yanked out from under you without any of your doing," said Matt Schulz of LendingTree. "Credit cardholders of all types are having this happen to them."
A LendingTree survey found this has happened to an estimated 70 million people within the last two months. Schulz says the main reason is that banks don't make any money from unused cards and right now they are trying to reduce their risk.
"If you weren't using that card before, the banks don't necessarily want you to use it now," Schulz said. "That might be an indicator that times have gotten tough for you and you need it because of some financial issue."
If an old credit card is closed, it can have a big impact on your credit score. Schulz says there are a few ways you can make sure those accounts stay active and are less likely to be canceled.
"Next time you go to a grocery store, use that second or third card you have to make that purchase," Schulz said. "(Also,)switch a regular recurring payment, like a Spotify or Netflix subscription, to one of those seldom-used cards."
Schulz says there's no foolproof way to stop an issuer from lowering your credit limit or closing a card. If that happens, he suggests calling one of your other card issuers and asking them to give you a higher credit limit to replace the card you lost.
"Do what you can to keep those cards active and it can help keep that card from being targeted to be closed or have that limit slashed," Schulz said.