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RMSweb
Posts: 2
Registered: ‎05-25-2010
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Opt-in/out & effect on FICO score

Background:  I have an AT&T (Citi) Universal Mastercard and have been using it for 13 years.  About a year and half ago, Citi informed me that my interest rate would jump to 15%.  I called and asked for a lower rate, since i have never been late, had been a long time customer and had roughly $20k on the card (I was layed off for a year and have been paying off other cards).  They offered me 10%, which I took.  What I didn't know is that Citi considered this an opt-out and scheduled my account to be closed when the card expired (which is the end of this month).  After speaking to a number of people at Citi that could not help me, I finally got it escalated up to a senior account executive.  He said that what he could do is keep the account open but I would have to agree to a 15% APR for new AND prior purchases. 

 

Issue:  If I opt-in, I will have to pay nearly $1,000 a year extra in interest.  If I let the account close, I will have to pay it back at the lower APR but the total credit line on this card is roughly 50% of my total credit line of all my major credit cards.

 

Question(s):  If I let this account close, how will this show on my credit report?  The balance will obviously show up but how about the credit line?  If it does not, then it would appear that I have ultilized all of my revolving credit.  I am afraid this would devestate my FICO score.  I can envision my other creditors seeing my lower score and taking action which would further lower my available credit and cause other issues.  If I ask to keep it open, I can focus on paying that credit card down and transfer some of the balance but it will take quite some time to do.  I am not too worried about the lenght of my credit history since I have other loans / credit cards that go back a little further than this card.

 

Any suggestions/information would be greatly appreciated!  Thank you.

 

 

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ngerasimatos
Posts: 1,278
Registered: ‎06-01-2007
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Re: Opt-in/out & effect on FICO score

There are a few factors to think about, if this account closes your UTIL is going to skyrocket, also it sounds like this is one of your older cards so your AAoA will be impacted as well. I would keep the card and try to transfer the balances off, maybe you have other cards that will give you a lower APR on a BT? 

Try not to become a man of success but rather to become a man of value
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MarineVietVet
Posts: 14,560
Registered: ‎07-14-2009
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Re: Opt-in/out & effect on FICO score

[ Edited ]
Hello and welcome to the forums.
I'm sorry this happened to you but you're certainly not alone. You'll keep the credit limit on this account so that will continue to be used to calculate your utilization.  So at least you have that.
Also your AAoA will not be affected once this is closed. Closed accounts continue to help your AAoA and credit length history for up to 10 years after closing.
It could have been much worse but I know that's small comfort to you.  :smileyhappy:

From a BK years ago to:
9/09 EX pulled by lender 802
3/10 EQ- 800
4/10 TU -772

You can do the same thing with hard work

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MarineVietVet
Posts: 14,560
Registered: ‎07-14-2009
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Re: Opt-in/out & effect on FICO score

 


ngerasimatos wrote:

There are a few factors to think about, if this account closes your UTIL is going to skyrocket, also it sounds like this is one of your older cards so your AAoA will be impacted as well. I would keep the card and try to transfer the balances off, maybe you have other cards that will give you a lower APR on a BT? 


I don't believe either of these is correct.

 

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RMSweb
Posts: 2
Registered: ‎05-25-2010
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Re: Opt-in/out & effect on FICO score

Thanks for the input!


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