ACCOUNT CLOSED - NOT PAYING OFF FAST ENOUGH!

[Anonymous]

I have a bank CC on which I was making minimum payments, but not charging anything.  I always made the payments on time but now I have been told that it is closed to any further charging at this time because I was not making "sufficient progress in paying it off", and they also raised the rate at which I will be paying it off in future.  They did imply, however, that it could possibly be re-instated in the future if my total amount of debt became a smaller percentage of my income.  Interesting.

What would be the effects on my credit report of moving the entire balance to either another existing card, or opening up another card and transfer the entire amount in order to get a more favorable rate on transferred balances while I'm paying it off?

Whether I move the balance, or pay it off in situ, what is the effect on my credit report of this account with a zero balance when the CC company closed it to further charging (temporarily?).  Is this account now being shown on my credit report as closed by the company even though I was told it was only closed to further charging at this time?  Am I splitting semantic hairs, or is there a third category besides "open" or "closed?"

Incidentally, my economic situation improved recently and I can start making major payments toward my CC debt, but this was not my first choice, anyway, to start making extra payments to.

Thanks for any advice. 

[manyquestions]

If you open a new account that can hurt your fico score, but if you get a new account with a large credit limite and you transfer this balance to it, and the end result is that the card with the balance has a lower percent of utilization, that could help your score.  What you are looking at is mostly managing utilization for FICO, but more importantly, managing the cost of carring the balance to you.  If you can get a 0% balance transfer, I would go for it.

On your FICO report your account is either open or closed.  If it is open but they won't let you charge anything, that is just between you and your bank.  So that does not matter.

[Anonymous]

With a closed account you risk the CL being cut to zero. My DW had this happen to her and it destroyed her util%. Beware of AA if your util% jumps suddenly. She had two other cards increase her APR after the account closed and reported 0 CL.

Message Edited by RenoFico on 03-01-2009 04:12 PM

[Anonymous]

Thanks for your speedy replles.  I haven't looked at my credit report lately, but what I seem to hear you saying is that in this type of situation the credit report should show the account as still active, even though they told me I couldn't charge any more at this point.  Correct?

I apologize for being so wordy with my post, but I am fortunate right now in being able to start doing some real damage to my CC balances, and I am trying to position my self to 1) pay off my balances with the lowest rates I can find, and 2) do the least amount of damage to my FICO in the process.

Thanks again.