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Credit Card Problems Continue with Sudden Cancellations

Even with new regulations about to go into effect that will limit some of the shady practices of the past, credit cards are still finding ways to pose consumers with new problems. The Wall Street Journal reported yesterday on what appears to be a growing number of instances where credit card companies are canceling people’s cards without advance notice, leaving them to be embarrassed when they present the card for a purchase and worried about what may have happened to their credit.

In many cases, nothing has happened to their credit: The Journal reported a number of apparent instances of abrupt cancellations of cards belonging to people who appear to have had very good credit. Many such people are having cards canceled anyway, as the card companies reduce their risk because of the economy.

This practice has apparently always been legal, but card companies may be canceling without warning more often today because of the current economic situation.

The Federal Reserve is imposing new rules for credit cards that take effect Aug. 20. They will require advance notice when card issuers change terms. But the new rules don’t speak to when cards are canceled, according to the Journal.