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Home >> Lending >> Credit Cards
Tries to Pay off Credit Card: They Close Account
Over the past year, I've had financial difficulties and was unable to pay my credit cards. While they were maxed out, I paid more than the minimum balance to bring it under limit, but the insane finance charges (over $80/mo on a $3000 card) kept putting me over the limit. I got my tax return check recently, and paid a total of $2250 on the card. The credit card company immediately dropped my credit limit from $3000 to $1010. I called them to see why they did it and they explained that because my credit card had been overlimit so many times in the past year, they adjusted my available credit. While that's frustrating, I understand. However, I told them that once I got the card paid off, I would probably never use it again because they lowered the limit with no notice.
A week later, I got a letter saying my credit card account had been closed because it was currently overlimit. It was actually $40 under the max limit and they closed it. I am beyond upset about this and need to know if there is anything I can do. While my angry side is saying "they'll never get another dime from me", I know that if I don't pay them, it'll ruin my credit. One of the things I'm worried about is whether or not they can charge interest/finance charges on a closed account. Also, do I have any options to report these actions, because I feel like I was swindled. I could have not paid as large of a chunk and put some money into savings, but I did what I thought was the smart thing by trying to pay off the credit card, and they still ended up screwing me over in the end.
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 First, send them a letter of complaint. Ask why the action was taken, and ask them to provide you with a copy of your agreement that allowed them to take this action. Likely, it is there and they followed the rules you each agreed to in the contract.
If you don't feel they answered your questions, ask them who their regulator is and how to contact them. You can complain to that regulator and the Federal Trade Commission.
Lastly, some of what you have experienced may be covered in the changes to the credit card laws that Congress recently passed. Unfortunately, those things like the way they accrue interest, bill, adjust rates and limits, won't change until July 2010, and you are correct. As long as you owe them a principal balance, they can charge you interest and fees, and you are obligated to pay as that is what you agreed to do.
Published on BankingQuestions.com 2/26/09
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