Macy's closed account for more than 30-month inactivity with no prior warning...do all CC's do this?

[foggyjack]

Hello,

I have monthly score watch with My Fico/Equifax & just received an email stating there was a credit change on my account. After logging in, I was shocked to see my Macy's account with a $3,000 limit was closed by creditor.  My 'My Fico' credit scores are 837, 832 & 820 (I just bought a My Fico 3-merge credit score/report this past week!)  I immediately called Macy's and the authorization department said it was closed due to inactivity in 30 + months!  What?!?!  How about a warning at least??  I asked her if I had charged even $5, would it have been closed and she said no!  I asked her why I hadn't been told this would happen to give me a chance to use the card and she said she thought they send out letters...nope...never received a letter!  Bottom line, the 2 Macy's representatives were no help at all, even giving conflicting information.  Hence, I thought I'd come to the CC forum and ask some questions.

Some background for my questions/concerns....my husband and & were transferred from West Coast to East Coast less than 2-years ago.  We only closed on our present home in March 2013.  Well, we're not getting transferred back to California!  The company will again put us up in corporate housing until our current home sells and we purchase in California...my husband actually flies out on Tuesday (car already shipped) and I will stay on here to get house listed, etc.  Obvioiusly, I will have to go through the mortgage process again very soon!  So, my questions have to do with this sort of incident because I know I will be going through the 'oh so fun' mortgage process again very soon.

I have lots of open credit card accounts that I don't use, ranging from store accounts to Visa/Mastercard accounts.  I really only use my American Express, Discover, 2 Chase Visas and, sometimes, my Bloomingdales, Saks, and Neiman Marcus store cards.  Except for my American Expresss, I almost always pay all my credit cards in full before the closing dates.  Every once in awhile, I may have a balance of $20-$100 on one of the other cards because a charge may have been pending and the CC won't let me pay the pending amount. 

We've known for a few months now that we would be moving, so I've been extremely cautious NOT to use any credit card accounts because I recently found out if I do use a dormant card, I immediately get a Score Watch alert!  One such situation recently occurred and it actually dropped my Credit Score.  Here's what happened...I used my Restoration Hardware credit card, which I hadn't used in about a year...the order was less than $200...I received shipping notification 2-days after placing order and I immediately went to my RH online account and paid the amount in full (and before closing date), hence I still had a $0 balance on closing.  Well within a couple of days of paying the RH bill, I received a Score Watch alert saying my Credit Score had dropped!  I immediately logged in and the reason for the score drop was because I had used a dormant account!  Granted, the score only dropped from 834 to 832, but the Restoration Hardware account never showed a balance! 

Obviously, I'm very confused on how all of this works.  I thought I could use any of my credit cards and as long as I paid them before the closing date, my credit score would not be affected?  How did Equifax even know I had used my credit with RH when I paid it 2 days later and before the account closed with a balance?  Do you guys know which credit card & store card companies close dormant accounts without notification?  I guess I could just call all of my credit card & store card companies and ask them?  Yikes!  I'm worried because I have over 15 credit/store accounts I haven't used in over a year.  I feel like this is a double edged sword because I know now if I even use a CC & pay before closing, the CRC's still know and, even charging very small amounts can trigger a decreased score.  

I'm hoping you guys have some valuable information and/or suggestions on how to navigate so many dormant accounts right before I will be going through the mortgage process again.  I definitely don't want another dormant account to close as the comment on the Macy's account was 'closed by grantor'...it said nothing about the fact that they only closed the account because I hadn't used it in so long! 

Thanks in advance for any and all information! :-) 

Foggyjack

[keithB]

To minimize closing of your accounts, use said store account at least every 6 months - some say up to two years but every 6 months to be safe.  For major credit cards, use once every other month as a minimum.

You have a lot of questions. Don't know if I'm the most qualified to answer them all so I thought I'd touch on the topic of closing of accounts for inactivity. If you can't or are unwilling to try to keep the accounts going, might I suggest you strategically close some of them?

I'd love to go into more detail but need to head out the door to a prior engagement.  I'll check back 

---

@foggyjack wrote:

Hello,

I have monthly score watch with My Fico/Equifax & just received an email stating there was a credit change on my account. After logging in, I was shocked to see my Macy's account with a $3,000 limit was closed by creditor.  My 'My Fico' credit scores are 837, 832 & 820 (I just bought a My Fico 3-merge credit score/report this past week!)  I immediately called Macy's and the authorization department said it was closed due to inactivity in 30 + months!  What?!?!  How about a warning at least??  I asked her if I had charged even $5, would it have been closed and she said no!  I asked her why I hadn't been told this would happen to give me a chance to use the card and she said she thought they send out letters...nope...never received a letter!  Bottom line, the 2 Macy's representatives were no help at all, even giving conflicting information.  Hence, I thought I'd come to the CC forum and ask some questions.

Some background for my questions/concerns....my husband and & were transferred from West Coast to East Coast less than 2-years ago.  We only closed on our present home in March 2013.  Well, we're not getting transferred back to California!  The company will again put us up in corporate housing until our current home sells and we purchase in California...my husband actually flies out on Tuesday (car already shipped) and I will stay on here to get house listed, etc.  Obvioiusly, I will have to go through the mortgage process again very soon!  So, my questions have to do with this sort of incident because I know I will be going through the 'oh so fun' mortgage process again very soon.

I have lots of open credit card accounts that I don't use, ranging from store accounts to Visa/Mastercard accounts.  I really only use my American Express, Discover, 2 Chase Visas and, sometimes, my Bloomingdales, Saks, and Neiman Marcus store cards.  Except for my American Expresss, I almost always pay all my credit cards in full before the closing dates.  Every once in awhile, I may have a balance of $20-$100 on one of the other cards because a charge may have been pending and the CC won't let me pay the pending amount. 

We've known for a few months now that we would be moving, so I've been extremely cautious NOT to use any credit card accounts because I recently found out if I do use a dormant card, I immediately get a Score Watch alert!  One such situation recently occurred and it actually dropped my Credit Score.  Here's what happened...I used my Restoration Hardware credit card, which I hadn't used in about a year...the order was less than $200...I received shipping notification 2-days after placing order and I immediately went to my RH online account and paid the amount in full (and before closing date), hence I still had a $0 balance on closing.  Well within a couple of days of paying the RH bill, I received a Score Watch alert saying my Credit Score had dropped!  I immediately logged in and the reason for the score drop was because I had used a dormant account!  Granted, the score only dropped from 834 to 832, but the Restoration Hardware account never showed a balance! 

Obviously, I'm very confused on how all of this works.  I thought I could use any of my credit cards and as long as I paid them before the closing date, my credit score would not be affected?  How did Equifax even know I had used my credit with RH when I paid it 2 days later and before the account closed with a balance?  Do you guys know which credit card & store card companies close dormant accounts without notification?  I guess I could just call all of my credit card & store card companies and ask them?  Yikes!  I'm worried because I have over 15 credit/store accounts I haven't used in over a year.  I feel like this is a double edged sword because I know now if I even use a CC & pay before closing, the CRC's still know and, even charging very small amounts can trigger a decreased score.  

I'm hoping you guys have some valuable information and/or suggestions on how to navigate so many dormant accounts right before I will be going through the mortgage process again.  I definitely don't want another dormant account to close as the comment on the Macy's account was 'closed by grantor'...it said nothing about the fact that they only closed the account because I hadn't used it in so long! 

Thanks in advance for any and all information! :-) 

Foggyjack

---

[s_haliz]

---

@foggyjack wrote:

Hello,

I have monthly score watch with My Fico/Equifax & just received an email stating there was a credit change on my account. After logging in, I was shocked to see my Macy's account with a $3,000 limit was closed by creditor.  My 'My Fico' credit scores are 837, 832 & 820 (I just bought a My Fico 3-merge credit score/report this past week!)  I immediately called Macy's and the authorization department said it was closed due to inactivity in 30 + months!  What?!?!  How about a warning at least??  I asked her if I had charged even $5, would it have been closed and she said no!  I asked her why I hadn't been told this would happen to give me a chance to use the card and she said she thought they send out letters...nope...never received a letter!  Bottom line, the 2 Macy's representatives were no help at all, even giving conflicting information.  Hence, I thought I'd come to the CC forum and ask some questions.

Some background for my questions/concerns....my husband and & were transferred from West Coast to East Coast less than 2-years ago.  We only closed on our present home in March 2013.  Well, we're not getting transferred back to California!  The company will again put us up in corporate housing until our current home sells and we purchase in California...my husband actually flies out on Tuesday (car already shipped) and I will stay on here to get house listed, etc.  Obvioiusly, I will have to go through the mortgage process again very soon!  So, my questions have to do with this sort of incident because I know I will be going through the 'oh so fun' mortgage process again very soon.

I have lots of open credit card accounts that I don't use, ranging from store accounts to Visa/Mastercard accounts.  I really only use my American Express, Discover, 2 Chase Visas and, sometimes, my Bloomingdales, Saks, and Neiman Marcus store cards.  Except for my American Expresss, I almost always pay all my credit cards in full before the closing dates.  Every once in awhile, I may have a balance of $20-$100 on one of the other cards because a charge may have been pending and the CC won't let me pay the pending amount. 

We've known for a few months now that we would be moving, so I've been extremely cautious NOT to use any credit card accounts because I recently found out if I do use a dormant card, I immediately get a Score Watch alert!  One such situation recently occurred and it actually dropped my Credit Score.  Here's what happened...I used my Restoration Hardware credit card, which I hadn't used in about a year...the order was less than $200...I received shipping notification 2-days after placing order and I immediately went to my RH online account and paid the amount in full (and before closing date), hence I still had a $0 balance on closing.  Well within a couple of days of paying the RH bill, I received a Score Watch alert saying my Credit Score had dropped!  I immediately logged in and the reason for the score drop was because I had used a dormant account!  Granted, the score only dropped from 834 to 832, but the Restoration Hardware account never showed a balance! 

Obviously, I'm very confused on how all of this works.  I thought I could use any of my credit cards and as long as I paid them before the closing date, my credit score would not be affected?  How did Equifax even know I had used my credit with RH when I paid it 2 days later and before the account closed with a balance?  Do you guys know which credit card & store card companies close dormant accounts without notification?  I guess I could just call all of my credit card & store card companies and ask them?  Yikes!  I'm worried because I have over 15 credit/store accounts I haven't used in over a year.  I feel like this is a double edged sword because I know now if I even use a CC & pay before closing, the CRC's still know and, even charging very small amounts can trigger a decreased score.  

I'm hoping you guys have some valuable information and/or suggestions on how to navigate so many dormant accounts right before I will be going through the mortgage process again.  I definitely don't want another dormant account to close as the comment on the Macy's account was 'closed by grantor'...it said nothing about the fact that they only closed the account because I hadn't used it in so long! 

Thanks in advance for any and all information! :-) 

Foggyjack

---

Closing inactive credit cards by CCs are nothing new. Not only that but lying that "they had sent a leeter" is also common! I have had that experience three times so far. If that would be your oldest credit card, you may get some small hit in terms of AAoA (Average Age of Account) in your credit score. However with higher scores such as yours, I would not overly concerned! You are talking about 2-3 points loss at the most. 

It is also myth with many that "If I use the card and pay off before even statement cut, credit card company would only report $0 to the credit agencies". In theory this should be the case. However in practice, many CCs do report the information during off-cut date as well.....Let me give you my example: I was having balance of $1,600 when the statement cut. But midway of the following month, one of the credit agency reported my higher balance being $3,000 (I did spend $1,400 after the cut off date of previous statement). That means let say if you were me and your previous statment balance was $0, but you had spent $1,400 (but did not pay say in two days). It is possible that in that two days of window, that particular CC may have reported your balance as $1,400 even though it is not a cutoff date and it is possible that you may either pay off $1,400 or you get credit for return of the goods you had purchased. 

[foggyjack]

Oops!  Just saw that in my OP, I wrote 'not' getting transferred back to West Coast...I meant to say 'now' getting transferred back to West Coast.

KeithB,

Thanks for your quick response!  I'd love to hear how to stratigically close some of my accounts when you have the time.

Yea...I see now that this 'credit score' fluctuation process is more complicated than I thought.  When I did use my Restoration Hardware card a couple of months ago, it dropped my score 2 points and the comment said it was due to using an account that was inactive for 4 months.  This incident made me realize that I'll need to learn much more about how to stratigically use all my cards without lowering my credit score and having the accounts closed for inactivity.  Unfortunately, due to husband's job transfer, it's inevidible we'll be going through the mortgage process again before the end of the year & want to keep my scores high.  I think I'll definitely take the time next week to call all my credit card companies to make sure I'm not close to having anymore closed.  Then after we buy new home in CA, I will take the knowledge I learn here and apply it because I won't care so much if my scores drop for a few months.

Thanks again, KeithB, for taking the time to help 'make me smart'! :-)

Foggyjack

[B335is]

Im sorry Foggyjack. I think Macys is known to CLD or close without some use. Its a good reminder to everyone about using SD cards once in awhile though.

[foggyjack]

s_haliz,

Thanks so much for your response!  That doesn't shock me at all that Macy's or any other cc company doesn't actually even send out a letter to let you know they will close your account if you don't use!  Thank you as well for explaining what can take place when using any cc and how the companies report to the the credit reporting agencies.  

I think you're right on the money about me not worrying too much about Macy's closing the dormant account because it didn't lower my credit score.  However, when I did use the RH card and pay before monthly close, that dropped my score 2 points. 

There is so much to learn about all of this!  I really appreciate your reply and glad I'm getting a 'heads up' on how to navigate all of this.  Thanks again for your knowledge! :-)

Foggyjack

[foggyjack]

B335is,

Yes!  You are correct...this is definitely a wake up call.  I'm going to start learning more about this now before it happens again! :-)  Thanks for your response & good advise to all! :-)

[lonelyisland]

Hi, dont worry so much about the minutiae - a 832 vs 834 wont make any difference in your rate - its generally scores over 760 get the best rate available. 

Secondly, the FICO 08 score you are tracking here, is more for credit card companies, your 04 FICO (almost always used for mortages) might not even register a blip for you using dormant CC accounts,  because its calulated differently. 

[trumpet-205]

You are over-reacting on this. Closing card because lack of use is nothing new. It does NOT hurt you because,

* Closed card stays on your report for 10 years.

* Credit analyst doesn't care whether it was closed by you or the creditor.

* Only two things they care about are the current balance and payment history.

* Credit score is only a tiny part of your creditworthiness. A score of 832 vs 834 ain't going to hurt you at all. Stop being obsessive about it.

[foggyjack]

lonelyisland,

Thanks so much for your response!  I am an over-worrier and it's really good to know having an account closed by a credit granter is not as big a deal as it sounded to me.  When we purchased this home last year everything went very smoothly, but my husband and I were still surprised how much more paperwork seemed to be involved than our previous home purchases.  I should have remembered the banks are interested in debt load and monthly payment amounts for determining mortgage limits.  After calming down, I realized having a $3k credit availability reduction due to inactivity would probably only hurt my credit score if I ever have the need to carry high credit card balances!  Thanks again for your knowledge! :-)