topic Risky Behavior in Credit Cards

Risky Behavior

CivalV — Wed, 29 Apr 2020 18:36:19 GMT

Just curious if I closed 2 cards, if this could raise a flag with my other creditors?

I have been sitting on closing my two first premier cards. They have an outrageous APR & monthly fees that I am quite sick of paying.

I am being offered a transfer balance on my Citi Cotsco with a 15% APR.. I know, not low but wayyy lower than First Premier *29%*. My thoughts were to transfer the First Premier balance over to Citi pay it before my Citi statement cuts May 25th so I don't worry about interest & close the First Premier CCs after they report $0 balance statements.

Re: Risky Behavior

Revelate — Wed, 29 Apr 2020 18:44:58 GMT

If you can pay it off in a month anyway why not just pay the FP card to $0 and kill it ASAP?

Franky balance shuffling is more of a flag to some lenders (historically and anecdotally both) than closing cards. Closing cards is a non-event to other lenders, heck you might use theirs more = winning!

Re: Risky Behavior

Wavester64 — Wed, 29 Apr 2020 18:49:25 GMT

@Revelate wrote:
If you can pay it off in a month anyway why not just pay the FP card to $0 and kill it ASAP?

Franky balance shuffling is more of a flag to some lenders (historically and anecdotally both) than closing cards. Closing cards is a non-event to other lenders, heck you might use theirs more = winning!

^^ What @Revelate said

Re: Risky Behavior

kdm31091 — Wed, 29 Apr 2020 18:50:03 GMT

As much as I've heard it repeated that closing accounts could "spook" other lenders I've found no evidence that it ever actually happens. If anything you're reducing your exposure and may use their card more like Relevate said, so not sure how it could be considered a bad thing.

Re: Risky Behavior

CivalV — Wed, 29 Apr 2020 19:08:41 GMT

I had no clue balance shuffling was a thing 😦 I have never done it before and definitely wouldn't want to raise any flags. I'll just pay the FP and be done with it. It's completely useless to me and just takes $$ away for nothing

Re: Risky Behavior

FICOnoob2020 — Wed, 29 Apr 2020 19:11:07 GMT

Congrats on closing your FP accounts! I ditched both of mine last fall/winter during a spree of closing 6 subprime cards and opening 7 new ones. Knock on wood but no AA has come of it yet.

Re: Risky Behavior

Anonymous — Wed, 29 Apr 2020 19:11:24 GMT

Lol and if another lender were to look and see what was closed, and saw two FP accounts were axed, they'd probably be like "good move - I don't blame them a bit. That card sucks!"

Re: Risky Behavior

M_Smart007 — Wed, 29 Apr 2020 20:26:29 GMT

Close and Close!

Re: Risky Behavior

recoveringfrombk7 — Wed, 29 Apr 2020 22:11:38 GMT

@kdm31091 wrote:
As much as I've heard it repeated that closing accounts could "spook" other lenders I've found no evidence that it ever actually happens. If anything you're reducing your exposure and may use their card more like Relevate said, so not sure how it could be considered a bad thing.

I closed Credit One, Ollo, Merrick, Capital One Secured, Capital One QS, and a gas card within 6 weeks of each other. Nothing happened to the accounts I left open. Sure this was before COVID-19, but I didn't realize closing so many cards at once was possibly bad until I had already done it haha.

Re: Risky Behavior

Anonymous — Wed, 29 Apr 2020 22:30:47 GMT

@recoveringfrombk7 wrote:
@kdm31091 wrote:
As much as I've heard it repeated that closing accounts could "spook" other lenders I've found no evidence that it ever actually happens. If anything you're reducing your exposure and may use their card more like Relevate said, so not sure how it could be considered a bad thing.
I closed Credit One, Ollo, Merrick, Capital One Secured, Capital One QS, and a gas card within 6 weeks of each other. Nothing happened to the accounts I left open. Sure this was before COVID-19, but I didn't realize closing so many cards at once was possibly bad until I had already done it haha.

I think the only way closing can spook lenders is if losing those CLs causes a dramatic increase in % utilization, causing a large score drop. (And if you aren't carrying a balance, you can reduce util as low as you wish). So some of the stories might be because of this effect rather than closing per se.

I guess it COULD have an impact on getting new cards if an issuer thought "Wow, X closed a lot of cards. If I give him/her mine, it might get closed soon too" but never heard of that!

Re: Risky Behavior

recoveringfrombk7 — Thu, 30 Apr 2020 00:10:18 GMT

@Anonymous I don't carry balances other than occasionally trying to entice my red card to CLI. I had gotten approved for my 2nd discover which had a 14.5k limit. The cards I closed totalled around 8k. So your point does apply to me.

Re: Risky Behavior

ChargedUp — Thu, 30 Apr 2020 03:51:29 GMT

I closed Ebates and not much longer afterwards I had a "You're approved already" pop up from Chase for an $18K Southwest Visa...

I agree utilization can come into play, but otherwise if a credit card no longer meets your needs, I don't see how closing a card or two could be viewed as a negative. (Especially sub-prime cards.)

Side note: If you're opening and closing cards constantly, you might run into issues with lenders thinking you're SUB chasing if they're sensitive to such things. I have a feeling this might come into play with some users being declined by Cap One while having prime scores and credit files.

Re: Risky Behavior

SweetCreditObsession — Thu, 30 Apr 2020 04:18:49 GMT

Agreed. Pay off FP as soon as possible.

Re: Risky Behavior

NRB525 — Thu, 30 Apr 2020 04:21:56 GMT

@CivalV wrote:
I had no clue balance shuffling was a thing 😦 I have never done it before and definitely wouldn't want to raise any flags. I'll just pay the FP and be done with it. It's completely useless to me and just takes $$ away for nothing

Congrats on getting better cards so you can close the predators.

Re: Risky Behavior

Anonymous — Thu, 30 Apr 2020 19:16:42 GMT

@Anonymous wrote:
@recoveringfrombk7 wrote:
@kdm31091 wrote:
As much as I've heard it repeated that closing accounts could "spook" other lenders I've found no evidence that it ever actually happens. If anything you're reducing your exposure and may use their card more like Relevate said, so not sure how it could be considered a bad thing.
I closed Credit One, Ollo, Merrick, Capital One Secured, Capital One QS, and a gas card within 6 weeks of each other. Nothing happened to the accounts I left open. Sure this was before COVID-19, but I didn't realize closing so many cards at once was possibly bad until I had already done it haha.
I think the only way closing can spook lenders is if losing those CLs causes a dramatic increase in % utilization, causing a large score drop. (And if you aren't carrying a balance, you can reduce util as low as you wish). So some of the stories might be because of this effect rather than closing per se.

I guess it COULD have an impact on getting new cards if an issuer thought "Wow, X closed a lot of cards. If I give him/her mine, it might get closed soon too" but never heard of that!

I agree, it's not so much about closing a CC or even a few here and there. But what closing them does to your score from UT perspective.

The only issue I see from a Lender's perspective on closing, is if it's too many in a short term likely accosicated with SUB chasing. They'll see you as possibly unprofitable.