This has happened to one in three credit card holders, according to the Lending Tree online marketplace. Everything is due to the coronavirus.
The pandemic has hit so many of us in different ways.
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Some have fallen behind on their mortgages.
Others have been in arrears to pay their credit bills.
None of this happened to Mark Linde
“I didn’t even call during the COVID situation and ask for help with my home loans or credit cards for that matter,” he said.
Yet her credit limits have been reduced on three credit card accounts in just five months.
All on cards he barely used.
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“They blamed inactivity again on the card and COVID,” Mark said.
Matt Schulz is from Lending Tree.
“When banks get nervous, they tend to try to reduce their risk,” Schultz said.
He says banks don’t make a lot of money when your card isn’t in use.
“If you weren’t using it when times were right, they probably won’t want you to use it when things go wrong because it could be a sign of financial distress,” Schultz explained.
Closing your account or reducing your credit may impact you even if the card was inactive.
“It touched me a lot. I got to the bottom. I think it was a credit score of 582,” Mark said.
That’s a drop of 120 points from a high of 702.
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To avoid this, Schulz says he is considering putting a small recurring fee on inactive cards.
“Like a Netflix or Spotify subscription on this card, to keep the card active,” he suggested.
Schultz says if your credit card account is closed or your credit limit is reduced, don’t be afraid to call and appeal the decision.
It worked for him.
“They said they would reconsider it and about seven to 10 business days they said they would reopen it.”
However, he knows it is not easy.
Linde tried, but says it didn’t work.
“You know what, that’s enough. Stop playing games with consumers. You know, it’s not their fault.”
Linde said he would like to see the government step in and help credit card holders the same way they have helped renters and landlords.
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