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Established Contributor
Posts: 564
Registered: ‎02-21-2008
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An Opinion whether to close or remain open will be appreciated

Card in question: HSBC : Formerly Direct Merchants Bank Opened in 1999

CLD from 12.5 k to 3k in April 09
Apr increased from 7.74 v to 14.99%


Received change in terms, that APR is going to 19.99% in Dec

It's my second oldest account that is still open. Oldest is Amex which dates back to 1987. I have two chase accounts that were opened in 1994 and closed in 2006 and still remains on report


I only use this card to buy nick knacks , to keep it active. Since I PIF anyway, why have such a low end card, that offers no rewards, and has no value?
How important is it's history? I still have over 200K in credit issued to me. So, is it worth keeping?

Eq score 798 Tu 802 from fico Exp 804 from exp
Valued Contributor
Posts: 1,668
Registered: ‎02-18-2009
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Re: An Opinion whether to close or remain open will be appreciated

you can close it, you are gaining the most AA from the Amex,  But it is increasing your general AA.

 

If you have all the credit you currently need, any FICO damage that could happen 10 years (?) plus the date of closure could be minimal to negilgible.

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Senior Contributor
Posts: 4,923
Registered: ‎04-19-2009
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Re: An Opinion whether to close or remain open will be appreciated

My similarly dated Direct Merchants Bank MC is still open. It has an even more horrible APR = 27.99%V - but I have a purchase APR promo of 6.99%F. My AF has been permanently rescinded as well. Both of these things happened because I asked. The front line CSR can give the APR promo to you but cannot handle AF waivers. That has to be done by a retention specialist.

 

If your account does not have an AF these is no reason to close it. If it does get a waiver. Just use the account once per quarter to keep it open. Once the account is closed it may report for ten years. It most likely will on EX, EQ and TU have ways of losing things and once lost a closed TL is gone forever. I have two legacy accounts that I do not need, but do nursemaid along to insure they report as long as possible for age purposes.

Valued Contributor
Posts: 2,682
Registered: ‎07-29-2009
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Re: An Opinion whether to close or remain open will be appreciated

I agree with the comment on AF. If it has no AF, why not keep it?

 

You have to judge by your own experience, however. Have you applied for any credit card and been denied because you already have "enough" open credit? If the card was hurting me in that way...if it was keeping me from getting a reward card that I wanted, for example...then I would close it in a heartbeat.

 

I doubt that closing it will hurt your scores much, if at all. You're covered on age, and you have enough other credit that AAoA will be impacted little.

Valued Contributor
Posts: 2,791
Registered: ‎03-18-2007
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Re: An Opinion whether to close or remain open will be appreciated

Split off keninmiami's question to create its own thread titled "Score effects of closing 40-yr-old cc?" on the Understanding FICO Scoring board.

Established Contributor
Posts: 530
Registered: ‎07-28-2008
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Re: An Opinion whether to close or remain open will be appreciated

Due to your long history, my opinion is that you shouldn't close it. Just keep it tucked away in the sock drawer at a $0 balance. Let the APR go to 1000%. It's not going to effect you anyway so it doesn't matter. Just use it once in a while to keep it active.

 

I have been tempted to close accounts myself but I never actually have. The accounts that are of no use to me simply don't get used.

 

- UM

Equifax Fico 785 as of 01/18/2012
Senior Contributor
Posts: 4,923
Registered: ‎04-19-2009
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Re: An Opinion whether to close or remain open will be appreciated

This is an HSBC issued card. It must be used at least once per quarter to avoid closure for disuse.
New Member
Posts: 4
Registered: ‎06-18-2009
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Re: An Opinion whether to close or remain open will be appreciated

CLOSE THE ACCOUNT. HSBC & Direct Merchant are rip-offs.

Tell them you want to close the account because they are raising the interest rate. They do not care how long you have been with them. They only care about one thing -- MONEY. If you have good credit --- keep it. Why pay a company 15% to 29% to use their credit card? They are not worth it. Just make sure they report it on you credit report correctly.

If not, you will have legal reason to sue them.

Moderator
Posts: 16,481
Registered: ‎07-14-2009
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Re: An Opinion whether to close or remain open will be appreciated

I vote to keep it open. Since you always PIF the APR means nothing. Let it continue to age interest free.
Established Contributor
Posts: 564
Registered: ‎02-21-2008
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Re: An Opinion whether to close or remain open will be appreciated

Thanks for the input. I forgot to mention the card has no annual fee. I also forgot to mention that I have a GM Card issued by HSBC that was Dropped from 16K to 3 k and it's APR is still at 6.74%! opened in 2000

Due to the overwhelming response, I will keep it opened, however, I wouldn't tuck it away for more than 3 months......
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