February 5, 2010

Why was my credit card revoked? How can I undo it?

revoked credit card
Many people at any point of their credit life go through this question, “Why was my credit card revoked?” They wonder if they can undo it. Well, when we keep more than one credit cards, we tend to forget to make the minimum payments for certain months and that leads to the revocation of our cards. We at times do not know when they are revoked. The issuers might send us mails which we tend to ignore not knowing the fact that it might be the final warning. Anyway, we need to know why our cards are revoked and how, possibly, we can make them running again.

The lenders issue credit cards to cardholders based on their credit report. If the report is very good and satisfactory, the credit limit will be high and the interest charges will be low. A cardholder can use the credit up to the limit set for the card. However, if the limit crosses, additional charges will be levied. This is called over limit fees. The credit privileges will be suspended. However, the card will be in tact and once he/she pays the required balance, it will run again. Likewise, a cardholder has to make a minimum payment toward his/her outstanding balance. Generally, the minimum payment is set for 4% of the outstanding balance. However, it may vary from company to company. If you are unable to make at least the minimum payment, you cannot use your card until you settle the payments. Additional, late fees will also be charged due to being late in payments. Now, if this condition persists i.e. if you often go over limit of your stipulated credit line, or if you do not make the required minimum payments each moth regularly, your credit privileges can be permanently suspended and you can never be able to use it. However, you shall remain liable to make the full payment of your outstanding balance. You cannot deny it. In addition, finance charges will be levied along with over limit and late fees. The situation badly affects your credit report and your credit score can go down drastically.

When a card is revoked, generally it cannot be reinstated. The issuers are reluctant to give any further privileges to that cardholder lest they continue the same. So, you cannot actually get it re-established. Nevertheless, you can approach your issuers and ask for redemption. Make all the pending payments and then request them to reopen your account. They can reopen your account but your credit limit may be decreased. No issues. Continue to make good payments and they will again increase it. But, if you are under huge debt and have approached any credit repair and debt consolidation companies, then they will never reinstate your card. Instead, they will look for a settlement with you. This actually hurts your credit score. Hence, do not be late in payments and do not repetitively go over the limit of your card. Keep a watch over the transactions of your cards and make at least the minimum payments accordingly.
Continue reading..