There are many reasons why you might close a credit card. Once you do, that card is probably “out of sight, out of mind” for you.
However, a recent problem taught me that it’s worth checking on your credit cards 30 days after you close them, as this will help you avoid issues down the road.
Let’s look at why you should check on your recently closed accounts.
What happens to closed accounts?
After you close a credit card, you will lose access to its benefits and won’t be able to make purchases on that card. Depending on the issuer, you also might lose access to managing your card online if you don’t have any other accounts currently open with that bank.
However, you should continue receiving bank statements until the account is paid off and the balance is brought to $0. Furthermore, if you close your credit card within the bank’s timeframe (typically 30 days) from when the annual fee posts to your account, you should receive a refund of the annual fee.
What happened to me?
I closed my Alaska Airlines Visa® Business card from Bank of America in December 2021. I checked the account a few days later and ensured that the annual fee had been erased from my account, as the phone representative had promised when closing my account. Satisfied, I stopped monitoring the account.
In September 2022, the Alaska Airlines Business card offered a best-ever sign-up bonus. I decided to apply for this card again but was surprised to be denied. The reason was even more surprising: Bank of America said I had a past-due account that was in collections for lack of payment.
The annual fee was put back on my closed account through an automation error, and my contact information was somehow deleted from the account. For nine months, I had no idea there was a balance on the account, meaning it charged fees for late payments and accrued interest each month along the way.
Additionally, the account had been sent to Bank of America’s collections department, which was reporting the delinquency to business credit reporting agencies, thus affecting my business credit score. (If this had been a personal credit card, the negative information would have been reported on my personal credit report.)
Bank of America was able to figure out where this went wrong and zeroed out my account, but checking on my credit card after closing it would’ve provided a solution much sooner. Thirty days should be enough time for any final statements to close out, which is the point at which any billing errors should appear. Finding this problem earlier and fixing it before it became a bigger issue means I could’ve been automatically approved on my credit card application — rather than needing to resolve issues and then ask for reconsideration after the initial denial.
A month after closing a credit card, check on the account to see if everything is the way it should be. Did the annual fee disappear? Does the bank have your updated contact information in case there’s an issue? Ensuring that your account closes properly without issues can avoid problems like unwarranted fees or being denied on a future application.
I will definitely be setting reminders in the future to check my credit cards 30 days after closing them to make sure everything looks correct. That way, I can resolve any potential issues much sooner — before they get worse.