Dear Consumer Action:
In June I was informed by my credit card company that it was canceling one of my accounts due to two years of inactivity. I called promptly to have the decision reversed but was told it was too late - I'd have to reapply.
With the current economic situation, I know that if I reapply I will be declined or receive a lower limit than I had already earned.
The company also reported the cancellation to the three credit bureaus. Now my credit score will be affected, as my debt to available credit ratio just went up, and I have a cancellation on my record.
I have two other accounts with this company with balances on them. How much debt does this company want me to have before I am a valued customer?
I find it hard to believe that the new credit card reform bill passed through Congress allows this to happen. I want justice. I am a real estate investor and my credit score and available credit are essential to my business. - J.C., Northfield
Credit card companies have the right to cancel accounts for inactivity and will continue to have that right under the new credit card reform bill.
Consumers should use any credit card account at least once a year to prevent it from being canceled. That has always been true - even before the recession hit. Think about it. Why should a company continue to offer you a credit line you are not using? It can take that credit and offer it to someone else. There are costs associated with keeping your account open. Why should the credit card company absorb those costs for no return?
Since it's too late to keep the account from closing, you can try calling the company and asking that it raise the credit limits on one or both of your other accounts, so your debt-to-available-credit will not be affected so much.
But don't be surprised if the answer is no. In this severe economic downturn, credit card companies are absorbing record losses from consumer defaults. Virtually all of the credit card companies have become extremely cautious about extending credit.
The credit card reform bill that President Barack Obama signed into law May 22 protects consumers from being hit with higher interest rates unless they are 60 days late with payment. It also puts the brakes on some of the more egregious fees companies had been charging, sets out disclosure rules and reins in some fees on stored value gift cards from credit card companies.
But it does not prevent credit card companies from closing accounts for a variety of legitimate reasons, including inactivity.
For details on the law, visit:
Dear Consumer Action:
Whatever happened to the rain checks for KFC's grilled chicken promotion? The new meal was promoted on the Oprah Winfrey show in May, and so many people went online for coupons for it, the chain couldn't fill the demand.
I tried to use my coupon and was denied. The clerk gave me a form to fill out and said I'd receive a rain check coupon to use later in the mail.
Just curious. - S.G., Mays Landing
You got your rain check right after writing to us. The folks at the KFC headquarters said the last batch of replacement coupons went out June 19, and should take a maximum of a week to 10 days to get to recipients.
Anyone who has not yet received a rain check can call the KFC customer care line at 800-225-5532.
Consumer Action will respond to each properly submitted letter about a problem or question, either in this column or by letter or phone. Letters must include copies - not originals - of all relevant documentation and a name, address and phone number at which you can be reached. Send letters to: Consumer Action, The Press, 11 Devins Lane, Pleasantville, NJ 08232.