Does closing a card always hurt your score?

[Anonymous]

Well, this past week I said good bye to my Chase card (1 year + 10 months).  I just didn't enjoy having a crappy CL of $400 after so long and I had no interest in using it due to that.  They didn't want to give me a CLI without a hard inquiry so I said so long!

In all honesty, the only way to say you don't appreciate the way they've done business with you is to close them out.  There's nothing else you can do really other than not use the card and in that case they'll reduce your CL and up your rates. 

If you can justify the loss of your AAoA, loss of the credit history in 10 years (if not a little sooner) and your utilization % raising due to a drop in the 25k limit... then you have nothing stopping you.

Message Edited by Cyan007 on 08-21-2009 06:02 PM

[Anonymous]

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@phxphun wrote:

The Chase card I want to stop using is the only card I really use.  It was opened in Feb 2007.  It has a $25k Limit.  

I've had two other cards longer than the Chase;

One Visa I've had probably close to 10 years that I just started using again in the past few months with small balances (<400).  $6k Limit.

Another Visa that I haven't used in years.  Probably 6 years old.  $4k Limit. 

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That 25k limit is golden when it comes to figuring out your utilization - even if you always PIF.  If you ever need or want to carry a balance on one of your cards this CL will carry the (utilization) day.  You've worked hard for them - let them work for you in your sock drawer.  PLus, having that high CL will be helpful if you decide to get a replacement card.  (Three functioning cards is a pretty happy number - that way if one reports a small balance, you get a score bump.  Plus you're a little protected from the crazy cc environment and your cc world won't be subject to damage at somebody's whim).  It's even better than getting mad.

[haulingthescoreup]

If you sometimes pay after it cycles, all that means (if I'm reading this right) is that you have a balance report. As long as you pay by the due date, which you obviously do, you're not paying any interest at any APR whatsoever.

I'd keep doing exactly as you've been doing. If you're irritated at them (I can see you are, lol), you might split part of your charging off to the other two cards.

But beamMEup is absolutely correct: you don't want to let go of that $25K CL.

I've had several rate increases. I just rolled my eyes and went on. They can do whatever they like to my APR's, although I hope they leave my CL's alone.


edited to clarify...

Message Edited by haulingthescoreup on 08-21-2009 03:50 PM

[Anonymous]

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@Anonymous wrote:

Well, this past week I said good bye to my Chase card (1 year + 10 months).  I just didn't enjoy having a crappy CL of $400 after so long and I had no interest in using it due to that.  They didn't want to give me a CLI without a hard inquiry so I said so long!

In all honesty, the only way to say you don't appreciate the way they've done business with you is to close them out.  There's nothing else you can do really other than not use the card and in that case they'll reduce your CL and up your rates. 

If you can justify the loss of your AAoA, loss of the credit history in 10 years (if not a little sooner) and your utilization % raising due to a drop in the 25k limit... then you have nothing stopping you.

Message Edited by Cyan007 on 08-21-2009 06:02 PM

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  Totally agree.  Or they might go further and close it on you and not just reduce CL and up rates.

[Anonymous]

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@Anonymous wrote:

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ExcellCR wrote: 
Too many ppl worry about every litle ebb and flow in their scores

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Probably a very good point, ExcellCR.

I'd also be interested to know if, during one of those rare manual reviews, anyone has been knocked-out when an account was closed by the grantor rather than by the consumer.  Perhaps it's becoming less and less common as systems and technologies change; and as our accounts are being closed for a variety of reasons that are not associated with creditworthiness. 

I have yet to run into it through apping for several cars and mortgages - through CU's and banks - maybe someone else could chime in here with their experiences? 

Message Edited by beamMEup on 08-21-2009 03:33 PM

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  You make a good pt as well, beamMEup.  The landscape is so different now.  I wonder though if closed by grantor could affect another CCC's actions.  With a mortgage company for instance you would have the opportunity to explain.  But if ccc A sees B closed your acct.  I wonder if A might say hmm maybe B knows something.  And then might take adverse action with CLD or rate hikes for instance.  I suppose anything's possible in these times. 

[creditwherecreditisdue]

In the old days this might have been a concern. Issuer closings are too common now for them to count for much.

[haulingthescoreup]

I have a "closed by grantor" on an old card with clean history. No one has ever mentioned it.

It was a store card that I didn't use after whatever the initial discount was.

With the financial massacres of the last year, I think that anyone could tell a lender that the card got closed due to the banks' excellent imitation of the Queen of Hearts from Alice in Wonderland and be believed.

[creditwherecreditisdue]

All I know is that if Chase wants my open account closed they are going to have to do it. I am not about to. And I have zero concern about how the comment reads.

[Anonymous]

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haulingthescoreup wrote: 
I think that anyone could tell a lender that the card got closed due to the banks' excellent imitation of the Queen of Hearts from Alice in Wonderland and be believed.

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Awesome!!!  Thanks for the fun link - just in case we've all forgotten that the Queen of Hearts and her "off with their heads!" orders are very much alive in the cc world.  Keeps it all in perspective and help us to make our decisions with some degree of intelligence,  , and to keep smiling through it all. 

[creditwherecreditisdue]

As the Cat did with the Queen, I attempt to "fade" in order to elude Chase's executioners. So far - So good!