It’s in poor taste, but it’s legal.  Even with all the debate and discussion over questionable billing practices, credit card companies are still finding ways to reduce their risk at the expense and inconvenience of consumers.  An article in the Wall Street Journal highlights the frustration of many consumers. It explains that the, “New regulations from the Federal Reserve, the first of which go into effect Aug. 20, and rules from Congress that unroll in February 2010 will still permit card issuers to cancel accounts without providing advance notice. The regulations will curb other controversial practices. They will prohibit card issuers from hitting borrowers with an additional fee if they go over the credit limit on their card. Cardholders will also receive 45 days notice in the change of terms, such as an interest rate increase or reduction in credit limit. But the 45 days’ notice won’t apply to account closures, regulators say.”  In response to a painfully recovering recession and continued fears of a relapse in the economy, more and more credit card companies are closing accounts, with no advance notice to their customer.  The practice is being utilized by major lenders including AmEx, Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and HSBC Holdings PLC.  They defend the practice in that it’s legal and they are merely re-evaluating their risks.  Some consumers are crying foul on the risk re-assessment excuse.  Mary Horowitz tried to use her card at a spa only to be declined because her AmEx account had been closed.  She received her notice several days after the closure and it explained that her account had been closed because of items on her credit report. Alarmed at this explanation, she obtained a copy of her report and found it clean except for one late car payment almost four years ago in 2005.

Most people can adjust and plan when they receive advance notice of changes in their financial situation.  This practice isn’t just poor customer service; it’s the equivalent of slashing someone’s credit tires.  Even responsible consumers that pay their bills on time are being affected.  Their financial back-up plans are eliminated.  They are embarrassed at the cash register.  They are scared by the unknown concern of identity theft.  The postage for advance notice is the same as notice after cancelation.  There is no good explanation for credit card companies to subject their customers to this type of grief, except that the law says they can.

The law also says that you can take other measure to resolve your debt issues when you are sent spiraling with this credit slash.  You have choices that you should have no regret in considering, especially when you have done the things necessary to be a good customer.  If your financial stability is at risk and you need information on how to get through your spiraling credit crisis, contact a bankruptcy attorney in your area.  A qualified attorney can advise you of your debt management options when your credit card company is seeking to close them.