If I Paid Off a Credit Card & Cancelled It, Can I Reopen That Account?

A credit card that is paid off and cancelled is considered closed and cannot be reopened. However, a new account can be opened following a credit check. Your status as a former customer may allow you to accomplish this easily over the telephone. Resuming use of a credit card is easier when you have the account open after paying it off. Some people store cards they are not using in a bank safe deposit box to avoid impulse spending.

Credit Approval

You're no longer a customer of the credit card company once you cancel the card. The company treats you as a new applicant when you return. While your account is active, the company has a right to periodically check your credit to make sure you are still a good credit risk. It loses this right once you cancel your account. Once you return the credit card company needs assurance that you are credit worthy and that's one reason for the new credit check.

Excessive Debt

Credit card companies realize that some people who max out other credit lines will attempt to reopen accounts they earlier closed. That's another reason they check your credit before opening a new account. In addition to confirming that your credit score is acceptable the company wants to make sure you have not taken on excessive debt since closing the original account.

Review Your Credit

Check your credit before applying to determine if you qualify for more credit. Credit reports are available for free from AnnualCreditReport.com, a website endorsed by the Federal Trade Commission to offer free credit reports. The free reports are available under provisions of the Fair Credit Reporting Act. Credit scores of 720 or higher generally lead to easy approval on most cards, with 620 the minimum score needed for competitive interest rates.

Credit Limit

Your credit limit could differ from the original account depending on your credit situation. A low credit score of around 620 and high balances on other cards likely will result in a low credit limit -- if you are approved at all. Credit card companies generally like to see high credit limits and low balances on your other credit accounts along with a record of timely payments over the past 12 to 24 months.

Applying In Writing

Applying through the mail rather than on the telephone allows you to enhance your application by adding a letter. Use the letter to discuss your current credit status as well as your former relationship with the card company. Ask that a new account be opened in your name with a credit limit that matches or exceeds your former credit line.