How to get a cancelled credit card re-instated?
July 4, 2007 9:43 AM   Subscribe

My credit card recently expired and I received a letter that said it would not be renewed due to a high balance. How do I explain to them that it should be re-instated?

I have a student credit card through my bank (Bank of America) that has a low interest rate, but a high balance. My limit is $1000 and I'm currently at $830. It's my only card, I haven't made a late payment on it in two years (and that was only once), and I always pay at least twice the minimum requirement. I don't want this blemish on my credit record. Can I challenge the cancellation? If so, how do I do that? If not, is there a way to appeal the cancellation so it at least won't show up on my credit record?
posted by commasplice to Work & Money (12 answers total) 2 users marked this as a favorite
Go in to your local Bank of America branch. Don't go to the tellers, just stop at the front desk. They'll send you around to someone's office to talk to and they'll be able to tell you what your options are. Just IMHO there's no substitute for showing up in person (sorry, I hate it, too).
posted by anaelith at 9:59 AM on July 4, 2007

Step one is to re-read the terms and services pamphlet that came with your credit card (or see if the terms and services are posted on the web somewhere). That agreement should spell out what they can and cannot do. Set your expectations accordingly.

Step two is to call them and negotiate. There should be a customer service number somewhere on the letter you received.

If you are not happy with the remedy they propose, step three is to find another credit card and transfer the balance.
posted by crazycanuck at 10:02 AM on July 4, 2007

As someone who used to work in credit cards --

unless they've restructured since then, the first person you talk to on the phone will have no control over this, because it's a credit decision and they're not trained to make credit decisions, so try not to get frustrated right away. They will be able to see whether or not you're eligible to talk to credit, or do something else. Best case scenarios: you get to talk to the credit department and credit, after interviewing you, finds some way to help you, or they find another way to structure your debt -- turning it into an unsecured loan, or something.

The worst case scenario is that the person you talk to can't forward you to anyone and has no other options popping up as available to you. If the rep you've talked to says they can't do anything, you shouldn't be worrying about this making a dent on your credit, as it's pretty clear some other factor or factors already is. I would guess debt-to-income ratio, from what little I know here.

You could go to the branch, and if you're super-connected there, they might be able to get you propelled way up the managerial chain as far as thinking of out-of-the-box solutions. No matter what, their hands are completely tied as to somehow misreporting your credit history to the bureaus, as that's serious fraud, so don't ask. (You'd be surprised how often that request is made.)

Best bet if you've had to read this far is to go to another bank or credit card company and do a balance transfer. Since your payment history is pretty good, I doubt that would be a problem.
posted by RobotHeart at 10:14 AM on July 4, 2007

Oh, and I should add, that going to a branch, really depends on the branch. If you have a bunch of newbies working it, really all that ends up happening is you sit there while they make the call, and that takes just as much time.
posted by RobotHeart at 10:16 AM on July 4, 2007

For whatever reason, they've decided they don't want your business, and it's unlikely that anyone you can get a hold of will be able to fix that without you spending more time than it's worth to accomplish this. You're entitled to ask them for a free credit report when you're declined credit--perhaps there's a mistaken blemish on your record that's affecting their decision that you'd want to correct, and if corrected, would make them change their minds. (A cancelled credit card won't be a blemish if you're timely on your payments.)

In the US, at least, the criticism is that the credit-card companies are too free, rather than not free enough, in granting credit, so if your credit report is accurate, you shouldn't have trouble finding a new credit-card provider unless all the banks are spooked by Barney Frank's paternalism.
posted by commander_cool at 10:18 AM on July 4, 2007

Your credit record is the least of your concerns right now. My question is, are they demanding full repayment within the next 30 days? Because that's probably your biggest worry. Getting another card shouldn't be *that* big a deal. Just apply for cards that you know you qualify for. There are plenty of student credit cards out there (MBNA is notorious for giving no income students thousands of dollars worth of credit for no good reason, as an example).

Call them and see what's up, naturally. What else did they say on the letter they sent you, aside from what you've told us? Because with the little info. you've given, I find it hard to believe that they'd just cancel your card (you're paying them interest every month; worst case scenario they'd increase your rate, but not cancel you altogether). Also, when was the last time you checked your credit report?
posted by SeizeTheDay at 11:00 AM on July 4, 2007

It seems like you are an ideal customer. You are running a significant balance, while still making all your payments.

I'm sure it was a mistake, or maybe they just want to jack your interest rate up to make even more money off of you.
posted by Good Brain at 11:17 AM on July 4, 2007

If your absolutely biggest concern is your credit report, cancel the card before the non-renewal hits. Then it shows up as "closed by customer" (typical) rather than "closed by provider" (could raise questions). It's an "I'm not fired -- I quit!" move. Then pay that balance off (or you might actually have to pay or transfer it before you can cancel the card). You'll probably have no trouble getting another card. Your credit will take a temporary hit until you pay off the balance because your usage will be high (usage = amount owed / credit available).

It would be better to keep the account open (longer history, plus it sounds like a good card), so I'd try calling people first. When you talk to them, I'd ask them what it would take to let you keep the card open. They might know exactly where your score is falling short. (Or, it could be that they almost never renew the "student card" so they can then offer you one with terms that are worse.)

From what you've said, the only problem on your credit report is high usage. As others say, you should double-check that there's nothing you don't know about. But if that's really your only problem, you can either reduce the amount owed or raise the amount of credit available to you. The best fix would be to get the amount owed down below $500 or even $300 before calling them. If you can't do that, you could boost your available credit by opening another account. If you do this, transfer a few hundred bucks from this card over to that card. You want no card to be using more than 30% of its limit. Plus, if the new card has a 0% intro rate, you'll save money on interest. (Obviously, be careful not to use that additional credit or you'll be in a bigger hole than when you started.)
posted by salvia at 11:18 AM on July 4, 2007

Your credit score is always a big concern.

Call (or visit) and find out what the problem is. It sounds as though something in your credit history is a problem. Credit card companies don't routinely cut off people who pay on time and carry a balance. Those people are the profitable customers.

It's possible that there is nothing wrong with your credit, but BoA has decided that this student card offering is unprofitable for them. In that case, you're out of luck. If they refuse to renew the card, ask to have a 6 month extension to pay off the card and to secure another line of credit. During that six months, pay it off and cancel the BoA card yourself.
posted by 26.2 at 12:31 PM on July 4, 2007

If they are no longer offering the student cards they may be able to open another card for you.

You would NOT be able to transfer the balance on the existing card to the new card, as that violates regulatory rules, but you could still charge on the new, non-student card, if that indeed is the case.
posted by winna at 2:10 PM on July 4, 2007

Actually, in this case, don't bother going to the branch (though it is normally good advice for banking problems) -- unless things have changed in the last year or so, the staff at a Bank of America branch can only do very minimal Credit Card account servicing, and I am sure for something like this they would have to call the Credit Card division to deal with your problem. Easier and quicker for you just to call for yourself.

Also, I know that the benefits of the student checking/savings accounts only last a maximum of 5 years, at which point they must be converted into some other kind of account. Perhaps this is simply what you are running up against?
posted by Rock Steady at 8:29 PM on July 4, 2007

This is pretty bizzare behavior for a credit provider, but if you think your credit is good what you can do is get a new card and do a balance transfer.

BTW, it's always good to keep a low balance on your card. I had a card that I kept near maxed out for years and once I started getting it paid down every month they jacked my limit from $1k to $4k over what seemed like about a year, even without me asking or anything.
posted by delmoi at 7:41 AM on July 5, 2007

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