This Clark Howard Credit Card Rule Could Prevent a Nightmare Scenario

Team Clark’s Anthony couldn’t believe the notice he received when logging in to check his credit card statement: Synchrony Bank was closing his credit card accounts effective immediately.

Access to all four of his credit cards with the issuer was cut off. No advance notice. No time to make necessary adjustments.

This was confusing and disorienting for Anthony. He had been a model customer. He never missed a payment, always paid on time and didn’t owe a cent in interest to this bank.

If Anthony wasn’t properly prepared, this bank’s unexpected actions could have sent his personal finances into a tailspin. But thanks to following one of money expert Clark Howard’s key rules for credit card usage, Anthony was able to pick up the pieces in short order.

In this article, I’ll explain what happened to Anthony and show you how one of Clark’s credit card rules prevented potential financial disaster for him.

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How Anthony Went From Four Synchrony Bank Credit Cards to Zero

Team Clark’s Anthony is on top of his finances. He is the type of guy who tracks his credit card statement closing dates to make payments before the bill goes out. He wants to zero out his balances and keep his utilization low.

So, it seems unusual that he’d be the type of customer who would casually login to his Synchrony account to find this greeting in bold red lettering: “THIS ACCOUNT HAS BEEN CLOSED FOR FUTURE PURCHASE.”

Anthony was a Synchrony Bank credit card customer for more than five years, and he was meticulous about keeping his account in good shape.

“I was a model cardholder,” Anthony told me. “Never a late payment. Never a penny of interest. I never had a single dispute on any of those cards. I just charged on them for the rewards.”

He made regular transactions with the PayPal Cashback Mastercard®, Sam’s Club® Mastercard® and Lowe’s Advantage Credit Card credit cards issued by Synchrony, and had a fourth that he no longer used and kept in his junk drawer.

So why were they closing his account? And why didn’t they contact him to let him know?

Anthony picked up the phone and called the number on the back of his credit card. He hoped it wasn’t fraud. Surely it was a mistake, right?

“The rep on the line was very unhelpful,” Anthony said. “All I was told was that I was deemed a risk by Synchrony and that I’d be getting a letter in the mail.”

How This Adversely Impacted Anthony’s Finances

A week later, Anthony received that letter in the mail notifying that his Sam’s Club card account was being closed:

Anthony escalated his situation to the supervisor level of customer service with Synchrony, but specifics were not provided on why they deemed him a “high risk of failure to pay.” Unfortunately, they aren’t required to provide details on their analysis that led to the decision.

“It’s so wild,” Anthony said. “My credit score is in the upper 700s, never any issues, my bill is always paid on time and my debt-to-income ratio is ridiculously low as well. It’s crazy. Never in a million years would I have thought it’d happen to me.”

The decision, which was completely out of his control, had serious financial consequences for Anthony.

Anthony experienced the following:

• Forfeiture of outstanding credit card rewards
• An instant—and significant— loss of spending power
• A negative impact on his credit utilization metrics as his overall credit limit was decreased by card closure

Anthony said he missed out on his last batch of Sam’s Cash rewards even though he had paid the balance he owed in full prior to receiving notification of account closure.

“I spoke to a supervisor at Synchrony to try to get the Sam’s Cash I was owed from my final purchases with the card,” Anthony said. “She insisted that I wasn’t owed anything because the card was closed when the statement was generated. The timing of that closure was so exact.”

Anthony submitted a complaint with the Consumer Financial Protection Bureau but it is still under pending investigation after an initial denial of his request for rewards compensation.

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How One of Clark’s Credit Card Rules Helped Mitigate the Damage

Anthony’s unfortunate tale is just one of many frustrating stories Team Clark has heard in recent years regarding card issuers slashing credit limits and closing accounts for otherwise “good” customers.

And while Anthony is still frustrated by the way this all went down, he’s also carrying on just fine as he adjusts to his post-Synchrony credit card life.

This is thanks, in part, to applying Clark’s 7 Rules for Using Credit Cards to his life.

Rule #1 on the list is to have at least two credit cards

“You should always have [at least] two credit cards,” Clark says. “Never one. And never two from the same issuer.”

Referring to it as the “Noah’s Ark Rule,” Clark says having cards from different issuers (banks or credit unions) allows you to diversify your access to credit in case one of the issuers decides to reduce or eliminate your access.

Thankfully, Anthony had credit cards from other issuers to ensure he was able to continue his day-to-day spending without interruption.

In fact, American Express gave him a credit limit increase by $10,000 after Synchrony shut him down. So having options helped.

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Final Thoughts

If there’s one thing I hope you take away from Anthony’s story, it’s that you should make sure you have more than one credit card from more than one card issuer to protect yourself as a consumer.

Anthony has great credit and pays his bills on time, but he was still cut off without notice by one of the larger credit card issuers on the market.

So, it could happen to you, too.

If you need help picking out a new credit card, Team Clark has you covered. We have reviews of the best cash back cards, rewards cards, travel cards and more under the credit card heading of our website.

Do you have a story like Anthony’s? We’d love to hear about it in the Clark.com community. And if you need help, please contact our free Consumer Action Center.