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Member
Posts: 14
Registered: ‎11-23-2008
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FICO Effect of Closing Credit Card (CHASE CLOSED IT!)

I received a letter last week from Chase stating that due to inactivity for 2 years they are closing my account.

 

I have had this card open for 5+ years, never using it (emergency only), and have a $25,000 limit on it. I have another line of credit with a Chase card of $31,500 which was just increased 2 weeks ago from $10,000.

 

I called Chase to complain as I believe this will hurt my FICO score (debt-to-available) and they actually admitted it would (after placing me on hold seemingly to confer).

 

Questions:

1. How does this affect my credit score?

 

2. What recourse do I have here, if any? If I close my other card with them, that will hurt me more in the long run...

 

I read stories similar, but worse than mine in this economy, and think it's getting ridiculous that creditors would bother upsetting good customers!

 

Thank you in advance.

Frequent Contributor
Posts: 309
Registered: ‎04-07-2008

Re: FICO Effect of Closing Credit Card (CHASE CLOSED IT!)

Sorry to hear that. That will hurt your utilization if you have any balance reporting on your other cards.

 

I'm surprised they didn't shut you down earlier, alot of CC companies close accounts after 6 months of inactivity. You didn't give them any incentive for keeping your account open. they make money off your use of the card.

 

BTW inactive cards don't help your FICO anyway because you're not showing use of credit. I wouldn't close your other Chase card. Just be sure to use it every once in awhile to keep it active.

 

If you had a 25k limit with Chase, you should have no problem getting a new card with a nice CL somewhere else.

 

Good luck!

Moderator Emeritus
Posts: 1,518
Registered: ‎04-20-2007
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Re: FICO Effect of Closing Credit Card (CHASE CLOSED IT!)

Hi idlewild!

 

Do you have any other credit cards?  If so, what are their credit limits?

EQ 814 / TU 815 / EX 842
Member
Posts: 14
Registered: ‎11-23-2008
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Re: FICO Effect of Closing Credit Card (CHASE CLOSED IT!)

Thanks for the replies, guys.

 

I only have this one Chase card opened now. I used to have a Diners Club that I had opened for about 10 years, but I closed it a month ago due to the annual fee.

 

I'm considering opening an AMEX to prevent a forfeiture on 300k rewards points and suspect that in the short term the combination of Chase closing this account and my opening another will hurt my score, correct?

 

Thanks again.

Moderator Emeritus
Posts: 1,518
Registered: ‎04-20-2007
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Re: FICO Effect of Closing Credit Card (CHASE CLOSED IT!)

Can you tell me a little bit more about your open Chase account?  What kind of card is it?

EQ 814 / TU 815 / EX 842
Moderator Emeritus
Posts: 1,518
Registered: ‎04-20-2007

Re: FICO Effect of Closing Credit Card (CHASE CLOSED IT!)

idlewild:

 

I'm concerned that your only open credit card has a $31,500 credit limit.  TransUnion and Experian do not include credit lines over $29,000-$30,000 when calculating revolving credit utilization.  The problem is that you won't be able to show recent revolving credit activity.   This is going to hurt your credit scores.

 

You do need a card that has a lower credit limit in order to show recent use of credit cards.

EQ 814 / TU 815 / EX 842
Member
Posts: 14
Registered: ‎11-23-2008
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Re: FICO Effect of Closing Credit Card (CHASE CLOSED IT!)

Wait, so there's an UPPER limit on the amount?  If so, I'm going to call back and have my limit reduced to $25,000.

 

Is this true???

 

Smiley Surprised

Moderator Emeritus
Posts: 1,518
Registered: ‎04-20-2007
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Re: FICO Effect of Closing Credit Card (CHASE CLOSED IT!)


idlewild wrote:

Wait, so there's an UPPER limit on the amount?  If so, I'm going to call back and have my limit reduced to $25,000.

 

Is this true???

 

Smiley Surprised


 

 

You could also apply for another credit card.  Do remember to steer clear of no preset spending cards, such as  "Visa Signature" and/or "World MasterCard," because usually, but not always, these cards do not report credit limits: They instead report your "Highest past balance" as the credit limit. 

 

3 of my 5 major credit cards have credit limits over $30,000.  In order to show recent use of credit cards, every month I show a small balance on my Citibank card that has only a $14,400 credit limit. 

EQ 814 / TU 815 / EX 842
Member
Posts: 14
Registered: ‎11-23-2008
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Re: FICO Effect of Closing Credit Card (CHASE CLOSED IT!)

Thanks!  I actually posted a topic on this same thing (no limit credit cards) when referring to a new AMEX I'm looking to get. Can you please take a look at it here??

 

 

Can you please also tell me where you found "TransUnion and Experian do not include credit lines over $29,000-$30,000 when calculating revolving credit utilization?"

 

Thank you so much again. This is really helpful.

Moderator Emeritus
Posts: 1,518
Registered: ‎04-20-2007
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Re: FICO Effect of Closing Credit Card (CHASE CLOSED IT!)

[ Edited ]

idlewild wrote:

Thanks!  I actually posted a topic on this same thing (no limit credit cards) when referring to a new AMEX I'm looking to get. Can you please take a look at it here??

 

 

Can you please also tell me where you found "TransUnion and Experian do not include credit lines over $29,000-$30,000 when calculating revolving credit utilization?"

 

Thank you so much again. This is really helpful.


I did look at your AMEX question earlier.  I'm not an AMEX expert.  I closed my AMEX Gold Card back in the 1990s, because it wasn't worth the (then) $75 annual fee.  I only have an AMEX Optima Platinum card now, and that does report a credit limit.  I would probably go with the Blue card, given the Blue does report a credit limit.

 

The idea of TransUnion and Experian not including high credit lines when determining revolving credit utilization has been discussed a few times in these forums.  In fact, in my very first post, I discussed my experiences with this.  You can find it in this thread:

 

http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&thread.id=10261

 

 

Equifax also excludes certain high credit lines when calculating revolving credit utilization, but their cut off point is higher:  We've speculated that it's on credit lines greater than $50,000.   

 

 

idlewild:

 

I'm going to be sending you a private message shortly.  Near the top right of your screen there is an envelope.  When the envelope is orange, click it, and you'll be directed to my message. 

 

 

 

 

Message Edited by psychic on 11-23-2008 04:36 PM
EQ 814 / TU 815 / EX 842
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