Credit Cards Are Playing Dirty Again
Can Paying Your Credit Cards In Full Each Month Hurt Your Credit?
You are a wise consumer who manages your credit cards responsibly. Each month the bills come in and each month they're paid in full. One day you get a notice from your credit card company that your account is being cancelled regardless of your perfect payment history and your superior credit rating. Think it can't happen? Guess again.
Eggheads
In the UK there is a widely-carried credit card called the Egg card. Recently, they took away credit cards from more than 100,000 of their customers. Surprisingly, many of these customers have never made a late payment in their lives. What's their crime? Not being profitable.
If you pay your credit card balance in full each month, you don't pay finance charges and the credit card companies don't profit from you. In the long run, you're costing them money rather than making it for them. Egg decided to cancel these accounts.
Will Others Follow Suit?
If Egg is the only company to do this, the problem will be isolated. But what if other credit card companies decide to cancel "unprofitable" accounts? If you think it's not likely (or that it will be isolated to the UK) you might want to think again.
Egg is a part of Citi-group, an American banking organization. If Citi-group is behind this, they may very well begin taking similar actions on their American-based credit card holders.
What You Can Do
First, don't panic. We don't' know if this is a growing trend or a one-time idiotic move. If it is a growing trend, I'm sure there will be credit card companies who try to get more customers out of the deal by offering cards to those who are being canceled. I'll keep you updated if that happens. In the meantime, stay true to your responsible spending habits and pay those credit cards off each month. Who cares what the rotten Eggs of the world think.