CC Canceled

[Anonymous]

I just received a letter from Cap One, they say they have suspended my CC because I havent used it for an extended period of time. I had this card since '97 and was my first CC on my own. I have 2 other CC. I havent used this card for 5 years (I think). I have a better APR on the other CC. I didnt realize they can cancel CC if you dont use them for a while!

My question is, what should I expect?

Will this hurt my FICO? I have a FICO of 798-818.

Should I call them? I figured if I did they would just tell me I have to open up another account.

Should I just open a CC with another company? Would it help with available credit?

What should I do?

[Anonymous]

The closing will hurt your utilization, but if you stay under 10 percent Util it won't hurt your score that much, but being your oldest card it is my understanding that it will hurt your average age of accounts, although I am not sure what type of score drop that produces. With your scores though you should be able to get another card easy from what I have read. .


edit: please see cobaltnv's post below. Age is not affected until a long time after an account is closed. If you carry balances, and the CL of the closed card was high, your scores can be hurt.

Message Edited by haulingthescoreup on 12-23-2008 04:38 PM

[Anonymous]

Thank you for the reply. But I dont understand utilization. How do you stay under 10%. What does that mean?

[Anonymous]

For example if you have $1000 worth of available credit and you use $100 or under you are using less than 10 percent of your available credit. That is a good thing. But if your available credit is $1000 and you use $866 (86 percent utilization) that is bad and can hurt your score.

[Anonymous]

ok, I get it now. Yes I diffiantly stay under 10%. I hate using credit cards anyway (had some major debt along time ago), guess thats why I didnt use that one for so long. One thing I did notice about my FICO, it said I can approve it if I had a longer credit history. So this being my first card it might affect my scrore? If you were me would you get a different card though?

[MidnightVoice]

If the letter says the card is "suspended" not "cancelled", you may be able to reopen it, put a monthly charitable deduction on it to keep it alive, and pif every month

[cobaltnv]

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@Anonymous wrote:
The closing will hurt your utilization, but if you stay under 10 percent Util it won't hurt your score that much, but being your oldest card it is my understanding that it will hurt your average age of accounts, although I am not sure what type of score drop that produces. With your scores though you should be able to get another card easy from what I have read. .

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Closing your oldest credit card will not have any affect on your AAoA for 7-10 years. Your closed account will remain on your credit report and continue to age until is falls of (in 7-10 years depending on the CRA). Adding a new credit card to replace the closed one WILL effect your AAoA as the new account will start with an age of 0.

Cheers 

[Anonymous]

Okay, so it won't actually hurt until a new card is open. Thats actually a good thing to know.

[Anonymous]

well I just called them, cant open the account. I can only open a new one. Thanks everyone for your help! Since I found out I have a good FICO score I just want to keep it that way. Im still learning about these things. Since Im on here, how many cards is a good number to have? Or does the amount of available credit matter more? Whats a good amount? Now that Im down to 2 cards im just curious.

[KingAdrock]

Definitely call them up and ask if they'll reopen the same account. No sense losing a good card you already have.