12-02-2008 10:13 AM
I received a letter from Citibank (my very first credit card from 1998) that my APR will be increasing from 7.49% to 24.99% variable. I have no late payments on my credit report.
I have *very* high debts I am trying to pay down and no balance transfer options (not any lower than 16.99%).
I can opt out of the APR increase and continue paying under my current terms, but then my account will be closed. I am concerned this will ding my credit report because I've had this account the longest (my next older account is from 2000) and once it's closed it's done. Should I just opt out, pay off this card with the current low APR and bite the bullet when the account closes (probably in a year?) Will this look bad on my credit report if it will say closed by creditor?
My other cards have higher APRs, so paying those off first is my priority. I am paying down as much as I can per month short of eating a brick of ramen a day.
Should I keep the Citibank card open and pay it off at 10% higher or just opt out and pay at the low rate?
12-02-2008 11:19 AM
Even once it's actually closed (someone will correct me here if I'm wrong), it will stay on your credit report for 10 years.
By then your other cards will have aged and it shouldn't be a huge deal, I would think.
Do what's right to get your financial situation straightened out - worry about credit report dings secondarily - the former will be a lot more beneficial to you long-term than stressing too much about the latter.
Best of luck to you. Sounds like you're on the right track!
12-02-2008 11:35 AM
08-23-2010 11:34 PM
Sorry to bump up this old post, but just wanted to update and ask for some advice. My Citibank Platinum Select card is now closed. I opted out back in 2008 when they raised my apr. The opt out would keep my 6.75% rate but close my account once my card expired. Ironically enough they did lower my apr a notch (to the 6.75% rate) after I opted out. Gosh, I wish the credit card act was in place before all the apr jacking.
Anyway, I was wondering what my chances would be of reopening this account if I called customer service. Has anyone had this kind of luck? This is my oldest account (I think I got a free t-shirt when I applied for this in college), so I was bummed to see this one go.
Also, I read somewhere that if your account is closed with a balance, then the credit limit the card had when it was closed still factors into the FICO debt to credit ratio. Is this true?