For instance, a credit freeze is one of the most effective techniques that can be used to prevent identity theft and to prevent any criminals from opening credit accounts in your name. However, the act of freezing one’s credit reports at three major credit bureaus namely Equifax, Experian, and TransUnion does not impact credit cards or loans that you already have. A credit freeze does not prevent the existence of fraudulent accounts or incorrect information about you from being reported to the credit bureaus, but it simply blocks access to your credit reports and dissuades new creditors from extending credit to you.
I want to clarify that you can make payments as usual on credit cards that you already have even if your credit is frozen. You will still have your credit card and other accounts reporting your payment history, credit utilization, and other details to the credit bureaus monthly. A credit freeze will not harm your existing credit as long as you remain on time with your payments while your credit reports are frozen.
Here are some key points about continuing to use credit cards after freezing your credit:
However, this means you cannot use your cards for cash advances as you have been accustomed to doing. This is important to understand because using a credit freeze does not in any way alter the cards and accounts you have opened before the freeze.
This means that your payment information will still be shared with the credit bureaus. It will also keep on helping to rebuild your credit score if you pay every month on or before the due date.
This means that even though you’re not making new charges on your credit cards, your utilization rates of the existing balances reflect on your credit reports. Ideally, you should not close your accounts or maximize the credit utilized because it will harm your credit scores in the future.
Payments will remain to be made and credits will accrue over time. It is preferred for your accounts to be opened and remain active for a long with no signs of non-performance on your part.
This means that even though you are applying for an additional card, you can still get lower interest rates, higher credit limits, and other incentives due to your relationship with the issuer. As you will see below, none of these perks are influenced by a credit freeze.
The only limitation is that no creditor can pull your credit reports when your credit is frozen. You would not be able to receive new credit cards or loans without first thawing the freeze for a temporary period. However, the credit card, which is already existing, is not affected by this.
Freezing your credit only gives you a little more control regarding who can view your reports. It prevents identity thieves and any other anti-social character from opening a fake account in your name since they are restricted from accessing your credit history fully. This can be compared to placing your credit files in a safety deposit box where the only person with the keys is you.
What if my card has been lost, or stolen, or I need to be replaced at a time when my credit is frozen?
Even if your credit card requires replacement in the future because it was lost, stolen, or damaged, all these can be done while your credit is frozen. To get a replacement credit card from your credit card issuer, you do not need to lift the freeze.
A credit freeze does not affect the card issuer in any way because it already has your permission as a customer to issue more cards to you, especially if you are an existing account holder. All you have to do is call your issuer directly and inform them that your card was lost/stolen, and you would like one to be issued to you again. Rewards programs, account numbers, etc., which are in your current credit card will be retained in your replacement credit card.
The critical factors to bear in mind are that a credit freeze works for any new credit accounts that a consumer would want to open, not for services that a consumer is already using and has an existing open credit limit. Therefore, as we have seen with activities such as balance transfers, getting replacement cards, disputing fraudulent charges, etc., one can still engage in them while their account remains frozen.
Is getting a credit freeze going to change any of my auto drafts tied to my credit card?
A credit freeze will not affect any recurring payments, use of a credit card for subscriptions, or other payment services. Since a freeze does not require a change of the initial accounts that were opened before it, all the pre-authorized charges that were authorized by the accounts before the freeze will be paid as determined.
For instance, if one has a subscription for a streaming service, gym membership, toll pass, or other bills that are paid for by credit card each month, do not worry they will all go through as usual. Merchants/vendors will keep on receiving such payments from the respective issuers that are due at specific times.
For services being paid by credit cards, they will not be impacted by a credit freeze as long as the credit card is not stopped. Simply keep paying attention to your statements from time to time to confirm that all recurrent expenses are being paid on schedule every month. However, it may be inconvenient and unnecessarily time-consuming to have to lift your credit freeze just to pay your credit card bill automatically.
Can I continue to use the credit card benefits for purchases and earn cash back and other rewards?
It is important to note that a credit freeze means the accounts within the credit bureau are closed and hence you are not able to receive new credit card rewards, loyalty programs, airline miles, and other perks as offered on the existing open account. These features are linked to your credit card provider or issuer, not your credit reports.
Therefore, if your credit card has rebates, points, or miles that can be redeemed for cash or other items such as gift cards or traveling discounts then you don’t freeze your credit fully during this time because you can still enjoy the full benefits of those offers. The remaining points can still be used in the same manner as previous and can be cashed in whenever needed.
But make sure to pay it on time and spend in the account frequently enough to meet the necessary activity and spending levels so that the rewards programs don’t get limited or removed completely based on the terms of the cardholder. Paying on credit card accounts will keep accounts in good standing and allow you to maximize the use of built-in benefits and loyalty programs as much as possible even if a credit freeze needs to be done.
Unlike the commonly associated rumors, the freeze only affects the creation of new accounts but permits the use of perks on existing and well-maintained accounts. Therefore, do not forget all the opportunities connected with the number of traveling miles, hotels, car rentals, and other additional benefits that can come with these cards!
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