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Closing Accounts with a Balance

Frequent Contributor

Closing Accounts with a Balance

Is it frowned upon to close an account with a balance remaining? 

Message 1 of 5
4 REPLIES
Established Contributor

Re: Closing Accounts with a Balance

I don't think you can truly close an account with a balance besides closing it to further charges. I think as long as there is a balance, paying on or not, that it would affect utilization which could hurt your score but I am not 100% sure.

100% Ficos: EX 780 , TU 783, EQ 776 inquiries last 2 years/1 year/6 months: EX-0/0/0, TU-0/0/0, EQ-1/0/0~ last credit card app 6/24/13- New car loan 3/8/2014- Discover IT $12,500~Kohls $1000~Amex BCE $4000~ Walmart Discover $7500~NFCU Signature CashRewards $23,300 Chase Freedom MC $6000~ Chase Amazon Visa $1900~ Cap 1/HSBC MC $3800~ Amazon Store $7000~ Fingerhut $1050
Message 2 of 5
Moderator Emeritus

Re: Closing Accounts with a Balance

+1  The account would have to be fully satisfied to be properly closed.

 

Starting Score: 504
July 2013 score:
EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+
Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!

June 2017 update: All scores over 820, just pure gardening now.
Message 3 of 5
Senior Contributor

Re: Closing Accounts with a Balance

WRONG guys... you can close it to prevent an APR decrease and continue paying it.. I've done  that with Neiman Marcus and Chase (twice with Chase actually). It just reflects closed on your report and of course... it will still report the balance until you PIF. It just prevents you from making any add'l charges to the account.

Marriott PR$25k | BCE $24.5K |BankAmericard Visa $25k| BOA Better Bal $17.5k |Wmt Discover $12.5k | BR Visa $17.5k | Amex Delta Gold $10k | Discover IT $10k | Paypal Extras MC $15k | Amazon Store $10k|Smile Gen $7.25k | Dillard's $10k | West Elm $4k| Express $3.05K | Mypoints.com Visa $4.5k | Freedom Visa $1k| Amex Surpass $1k
Message 4 of 5
Senior Contributor

Re: Closing Accounts with a Balance

oh.. and it doesn't affect utilization... either for your credit limit or balance part of util. I know this bc I've calculated my personal util percentages (with and without the closed account), and the balance I still  owe on my old WAMU/Chase account never gets factor into my util, nor does the CL.

 

Now of course, on my recent approved recon with Chase.. they did ask why I still had a balance on an unpaid account haha, and my reason was that  the int rate was so low.. lol 9.24%, that I was not in a hurry to pay it haha.

Marriott PR$25k | BCE $24.5K |BankAmericard Visa $25k| BOA Better Bal $17.5k |Wmt Discover $12.5k | BR Visa $17.5k | Amex Delta Gold $10k | Discover IT $10k | Paypal Extras MC $15k | Amazon Store $10k|Smile Gen $7.25k | Dillard's $10k | West Elm $4k| Express $3.05K | Mypoints.com Visa $4.5k | Freedom Visa $1k| Amex Surpass $1k
Message 5 of 5