Keep your credit card in good condition

Having your credit card account in good standing generally means sticking to the terms of your credit card agreement. While what is considered “good status” may be different from a credit card company, it usually means that you pay at least one month at a minimum. Some credit card issuers may also define good standing to include keeping your account and keeping it below your credit limit.

What happens if you lose good condition

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Other accounts with the same bank, even a checking or credit account, can affect your credit card. Therefore, it is important to maintain a good standing with all your accounts.

Maintaining your good standing allows you to enjoy the privileges and benefits of your credit card account, e.g., shopping up to your credit limit, redeeming credit card rewards, etc. However, when you lose good credit and can sometimes happen with just one late payment, you you will have some consequences.

  • Fees are added to your account , for example, if you are short on credit card payments or your payment is less than the minimum.
  • Your credit limit is reduced as a result of delays or even high balances on other credit cards. (Lowering your credit limit does not always mean that your account is not in good standing. Sometimes credit card issuers lower their credit limits for business reasons.)
  • Your interest rate increases after you stop paying for credit cards for 60 days. Please note, once the penalty rate is triggered, it can be applied indefinitely for new purchases in your account.
  • Your rewards are deducted after missing a certain number of payments, which varies by credit card issuer. Some rewards programs may return your rewards after you have fixed your account. Others deduct previously earned rewards indefinitely.
  • Temporary fees may be suspended for a period of time until you return your credit card in good standing.
  • Your account may be closed if you continuously delay payments, become severely irregular, or leave your credit card inactive for several months. When your account is closed, you usually need to sign up for a new one. Even after your account is closed, regular monthly payments still need it.

What to do

If you have a problem with your account, such as unexpectedly declining your credit card purchases or your rewards not available, or seeing an unexplained fee or interest increase, contact your credit card company to find out what happened. Correcting a negative action can restore your account privileges if your account has not become too backlogged.

It’s not just your relationship with a particular credit card company that matters if you lose a good credit card. Some actions put your overall credit profile at risk. Specifically, if you are on credit card payment for more than 30 days later, a negative entry is made on your credit report. As a result, your credit score may fall. Serious delinquency such as being 90 days from maturity or being charged may cause other credit card issuers to reconsider their financial relationship with you.

Keeping your credit card in good standing is important to maintaining a good credit

Keeping your credit card in good standing is important to maintaining a good credit

Your account history still plays a factor, even when your current balance is positive. For example, if you are behind on payments, a late notice stays on your account and on your credit report (seven years from the date of reinstallation), even after you are caught up in your payments.

Credit card issuers may decline your credit limit increase or interest rate reduction request based on your previous account errors.