Sparing your Credit Cards from Shut Down

There’s been some attention, recently, about credit card shutdowns due to an uptick in account closures from Citi and Barclays. Let’s take a look at credit card shutdowns from the major banks in this post. Please add your own (unpleasant) experiences in the comments below.

Amex

Amex has long been known to conduct something called a ‘Financial Review’ (FR) when they see suspicious activity. If they see action on your credit cards which they don’t like, it will trigger a review of your activity and income. This review usually means that ALL cards are frozen and can’t be used to make purchases until going through the FR process. Amex will request certain documents to verify your income and financial pursuits.

There have also been unusual cases of shutdowns by Amex without any financial review involved. Notably, Amex axed many Old Blue Cash cardholders who were engaging in heavy MS usage of the card. It seems that was a one-off decision for Old Blue users; typically, Amex won’t shut down accounts unilaterally without first reviewing the card member’s finances to see if the charges are justified.

What Triggers Financial Review?

Financial Review seems to come mostly from heavy spending, irrespective of whether the spend is ordinary or manufactured. FRs are especially common on new card accounts. Time and again, we hear stories of FR on new card accounts when high dollar charges hit the account, and this comes up often with cards that have a high bonus threshold and require big spend to meet the bonus spend.

My impression is that multiple high-dollar transactions trigger the red flag more than a single transaction. It would thus make sense to do a single $10k transaction, for example, and not two $5k transactions. I can’t guarantee this info is accurate, however.

Reason for shutdown

Most FRs don’t result in account closure. In the vast majority of FR cases, they’ll either unfreeze the cards without any change at all or they’ll lower the credit limits to an amount they feel is secure based on your financial information.

The two scenarios that can cause actual card closure are:

• someone who has zero documented income
• someone who signed up for a business credit card and doesn’t have a business

In the former case, all accounts are likely to be closed; in the later, it will just result in the shuttering of the business cards.

There have also been shutdowns for things like delinquent debts to Amex or for suing Amex.

If you were shown the door…

Some have had success with getting their cash rewards paid upon request. It’s been mentioned that this works better when requested after the balance has been paid down. If that doesn’t work, try filing a CFPB claim if you feel the account was closed unjustly.

Regarding Membership Rewards, there’s some good info on Projectendpoint indicating that you can redeem the points for 90 days after shut down, even pending points, and possibly even to travel partners which weren’t previously linked to your MR account.

Getting Back Together…

There is an excellent post by Milestomemories about getting off Amex’s blacklist. In short, waiting 10+ years sometimes works to get off the blacklist. A good method of getting back together sooner is by having yourself added as an authorized user on someone else’s Amex card with your SSN input in the system. Once they have your SSN in the system they see you as an active cardholder, and you’ll hopefully be able to apply for a card under your own name soon after.

The easy way to tell if you are blacklisted or not is to just apply for a credit card. No hard credit pull is done for the application of someone who is blacklisted, and you don’t have anything to lose by trying.

Bank of America

There are a few reports (1, 2, 3) of BofA closing all cards, even the third-party cards run by FIA, for heavy manufactured spending. When shutting you down, they’ll even close your IRA.

There was also a time when it was easy to get multiple Alaska airline credit cards, and they were closing accounts of churners. They’ve also taken to closing out accounts if you have too many.

If you were shown the door…

It doesn’t seem to be easy to get back the points after shutdown. Try filing a claim if you feel the accounts were unjustly closed.

Getting Back Together…

Unknown if it’s possible to get back in BofA good graces after shutdown.

Barclay’s

Another card that’s seen an uptick in shutdowns recently is Barclay’s cards. Not only have they been closing all cards of certain ‘abusive’ cardholders, they’ve even been shutting down all the accounts of other relatives at the same address! Doesn’t make sense to me, but apparently, once someone is viewed by Barclay’s as deserving account closure, they’ll assume that everyone all relatives at that address are in on the scheme.

Reason for shutdown

It appears that the Barclay’s shutdowns are tied to heavy usage/manufactured spend and also tied to making payments from too many different bill pay sources.

Some feel that shut down is caused by having eyes placed on your account, e.g. if you dispute a charge or similar, not based on internal algorithms used by the bank to detect certain activity.

If you were shown the door…

People have had success (1, 2) with CFPB claims, so keep that in mind if you feel the accounts were closed unjustly. Also, there’s a report of getting the annual fee back by calling in.

Getting Back Together…

Unclear if Barclay’s shutdown means that you can never get a card with them again, but you definitely won’t get back in the door right away.

Capital One

There are a few Capital One shutdown stories in this Flyertalk thread for people who did heavy spending and, particularly, manufactured spending, or for litigation.They’ll shutdown all cards, even those that weren’t abused and possibly even others at the same address.. Abusing their checking account can also lead to card shutdown.

If you were shown the door…

Capital One will reportedly use your points balance as payment toward any outstanding balances, and you won’t lose the points.

Getting Back Together…

There is a report that indicates that Capital One is open to taking you back on board after 180-days.

Chase

There have been cases when Chase shuts down all account, and there’s even a dedicated Flyertalk thread on this topic.

It’s been mentioned that Chase is sensitive to suspicious payments activity. Many suggest not to pay Chase with money orders or in-branch cash payments. And some even shy away from making payments with alternative electronic payment methods (like Bluebird or Walmart billpay), and from using too many unidentifiable payment sources.

Others mention things like manufactured spending and heavy card usage, especially overspending in a short amount of time and cycling your credit line.

Usually, all cards and accounts get neutered during a shutdown, although there is an interesting report of someone who only had some cards closed. And there’s also someone who was shutdown on his Chase banking accounts, yet his credit cards remained active.

More recently (May 2017), Chase has been auditing accounts of new card applicants to see if they had many inquires and new cards. They deem this a risk and shut down all of their cards.

If you were shown the door…

Chase makes it easy by letting us redeem Ultimate Rewards points after shutdown, perhaps for 30-days.

Getting Back Together…

In this Flyertalk thread, there are conflicting reports about getting back on Chase’s good side; the earliest report of coming back is just over one year from shutdown (see also this report). However, others did not have success even 18-months later. One friend mentions having success getting back after ~14 months, but only on co-branded cards, not on regular Chase cards (INK, CSP) due to unsatisfactory relationship.

Those who are blacklisted will often get their application initially approved but canceled soon after.

There’s one interesting report of someone who convinced Chase to let him back in after being shutdown for MS. They reinstated his old cards almost a year later, upon request.

Citi

We recently posted about an influx of Citi shutdowns. Interestingly, they sometimes limit the closures to just a few cards, leaving the rest unscathed. More often, however, all accounts get the boot.

Reason for shutdown

It’s not entirely clear what’s bugging Citi, and it seems that it’s not a single common denominator of all cases.

One theory put out by Miles4More is that it’s due to unpredictable payments. Many people pay their Citi bill with various debit cards, or they’ll have different payments from multiple sources come through each month. Such activity looks suspicious and causes Citi to close some or all accounts.

This theory that Citi is troubled by payments history is well supported by the recent Citi crack down on debit card payments. Readers have been reporting that they’ve been asking more questions recently, and a whole lot more, see these comments 1, 2, 3, 4. This recent scrutiny leads us to believe that the payments issue is a significant factor in many shutdowns stories.

Aside from this payments idea, which is seemingly a recent thing, there have always been some reports of shutdowns for heavy manufactured spending (MS) and/or perk abuse, such as a temporary 5x everywhere offer. It’s also been mentioned that excessively churning Citi cards can be a negative factor as well. 

Many shutdowns are probably a combination of these factors. Each person is reviewed separately and gets an individual determination, and numerous factors can certainly combine in reaching this decision.

Another unrelated thing that’s coming up more recently is specific cards being shut down due to inactivity. Try putting a small charge on the card once a year, and hopefully, that will keep your cards alive.

If you were shown the door…

If you were shut down, the first thing you want to do is redeem all points balances. With Thank You accounts, it may be possible to access the Thank You account balances even with a closed down card at thankyou.com. It may also be possible to call Thank You and redeem points over the phone. Thank You points are run as a separate division making these options possible. If you don’t redeem the points right away, they may get confiscated.

If you can’t redeem the points and you feel the accounts were unjustly closed, try filing a case with the CFPB. Hopefully, you’ll get compensation for the unredeemed points – many have had success with this.

Also, note that many people mention getting a notice about an upcoming bank-account/debit-card closure; they give advance notice for bank account closure but not for credit card closure. The bank account closure notice is said to be a sign that your credit cards will soon get the ax. If you get such a letter, it’s worth spending down your points balances before it’s too late.

Getting Back Together…

In the past, there’s been at least one report of approval for a Citi card a couple of years after getting shutdown, so all may not be lost for the long haul. It won’t work right away, though.

Comenity

Comenity Bank has an odd practice of hard pulling you before  shutting you down to see your history. Possible causes of shutdown are large/sudden spending, and possibly a bad-looking credit report, e.g. lots of newly opened accounts. See this Milesperday post for more info.

Discover

Discover isn’t high on the list of issuers that people MS or churn, and for that reason there aren’t many reports of shutdowns with Discover. I’ve seen a couple reports which may indicate that Discover is sensitive to payments from suspicious sources, like from an account that isn’t under your name. There was a story or two of shutdowns over the recent Apple Pay promo (possibly a ‘perk abuse’ type of idea).

One reported shutdown story resulted in one Discover card being closed while their other card remained open.

If you were shown the door…

As a matter of policy, Discover will payout rewards on accounts that were closed, even those shuttered due to delinquency. (You will lose any promotional double cashback, though.)

Getting Back Together…

As noted, when closing accounts, they don’t necessarily shut you out completely, and it may be possible to apply again at some later date. One person reports getting approved a few months after shutdown, but the account got closed a few months later.

U.S. Bank

The few known shutdowns seem to be due to many new cards showing under their name, and possibly also for MS. There’s also a report of credit card shutdown due to some suspicious deposit activity on a US Bank checking account.

More recently, there are many reports about MS shut down too on the Altitude and Flexperks cards. (1, 2, 3, 4, 5)

If you were shown the door…

One report indicates being able to redeem points after shutdown.

Getting Back Together…

There’s an interesting report of someone who filed a claim against US Bank, and they replied by reinstating the credit card accounts. Another similar type of story here. Also, one person heard from the review team at US Bank that it’s possible to apply again after a year.