topic Credit Union Closures or Adverse Actions? in Credit Cards

Credit Union Closures or Adverse Actions?

Rockysocks — Sun, 12 Feb 2023 18:08:01 GMT

Just curious and couldn't really find anything in search. How many of y'all have experienced or seen credit card closures or adverse actions such as CLD's with CU's just from card inactivity? I know it's always YMMV, but does anyone have any insight or DP's into how likely these actions are to happen from credit unions in general? Thank you, lovely people.

Re: Credit Union Closures or Adverse Actions?

Kforce — Sun, 12 Feb 2023 20:09:35 GMT

I believe many local and smaller CU's are more forgiving about small or no use of cards.

However I feel that those keeping high balances are still in danger.

I also feel like times are changing and CU's are thinking and acting more like banks every year.

Personally would not gamble on much of a difference.

Before finding this forum in 2015

I had a CU card with "No" use for over 20 years.

Yes it is now over 30 years old.

For safety because of the MyFico Forum new found knowledge,

it now get's $10 every 3-4 months.

Not a lot of work just to be safe.

Re: Credit Union Closures or Adverse Actions?

coldfusion — Sun, 12 Feb 2023 20:32:10 GMT

Depends on the CU.

I know that for example USAlliance will sometimes choose to close an account when a card ages out instead of sending a replacement; you're simply informed of the impending account closure without an option to retain the card by using it.

Re: Credit Union Closures or Adverse Actions?

Aim_High — Sun, 12 Feb 2023 20:49:01 GMT

My theory on credit union (or banking) cards where I have active deposit accounts is that the deposit accounts appear to insulate my cards from quick closure. I have two cards from a credit union and USAA which have literally not been swiped in five years without closure, but in both places I have active deposit accounts.

Of course, to hold membership in any credit union, a "share" account with at least a nominal deposit of $5 to $25 is often required. If that is all you have with them, I would be more concerned, or if your deposit account has a low balance of a few hundred dollars or less and is largely idle.

Even without the deposit accounts, from my experience I believe it's more unusual for credit unions to CLD or preemptively close accounts than the large national lenders. I would guess that's for a few reasons. With the exception of the larger national credit unions, most credit unions either restrict their membership or are only "known" to a much smaller population than the national banks. These factors naturally restrict the number of credit cards they issue and lessen the chance they are concerned about extendeding too much revolving debt. Second, credit union maxium credit limits, absent a handful of the largest national players, tend to be lower than the national banks. It's not usual for some smaller credit unions to approve cards at $5K, $10K or less and maybe have upper limits of $15K to $25K whereas the national banks will often lend higher amounts. Credit union underwriting appears to often be naturally more conservative.

Re: Credit Union Closures or Adverse Actions?

Anonymous — Tue, 14 Feb 2023 00:26:31 GMT

I had a Penfed card closed for non-use. The surviving card hasn't been used for over a year though, see how long that lasts.

Re: Credit Union Closures or Adverse Actions?

CCrew — Tue, 14 Feb 2023 00:37:06 GMT

As a data point.. NFCU for us if we didn't use our debit cards they wouldn't send new ones. Wife and I each have CC's with them. I was an AU on hers but never swiped the card and in July of last year when her card was replaced for expiration mine wasn't.

In their credit, they did email about the debit card.

Re: Credit Union Closures or Adverse Actions?

Anonymous — Tue, 14 Feb 2023 01:00:24 GMT

@coldfusion wrote:
Depends on the CU.

I know that for example USAlliance will sometimes choose to close an account when a card ages out instead of sending a replacement; you're simply informed of the impending account closure without an option to retain the card by using it.

ANd on the AA side, didn't we hear about those who "abused" the 6% supermarket category on USAlliance and got their cards closed. Just like a real bank!

Re: Credit Union Closures or Adverse Actions?

Aim_High — Tue, 14 Feb 2023 19:13:57 GMT

@CCrew wrote:
As a data point.. NFCU for us if we didn't use our debit cards they wouldn't send new ones. Wife and I each have CC's with them. I was an AU on hers but never swiped the card and in July of last year when her card was replaced for expiration mine wasn't.

In their credit, they did email about the debit card.

Same thing happened with me, @CCrew. Good data point. I don't use debit cards but I do like having them for ATM withdrawals. Nowadays, though, I don't use cash as often as credit cards and I have more banking accounts to choose from to withdraw than I've ever had in my life. They notified me and I made a point to use my (old) card for an ATM withdrawal and they sent me a new card. So it doesn't have to be used for a debit transaction.

Re: Credit Union Closures or Adverse Actions?

fury1995 — Sun, 12 Mar 2023 03:27:16 GMT

I have a reporting Nasa FCU Visa that wasn't renewed from the last expiration. It reports open and zero balance and I can see the card on my login however I cannot request a line increase or a replacement card for the account. I've just let it idle and report open padding my uitlity, which really isn't necessary but it ages with the rest of of my open accounts..

Re: Credit Union Closures or Adverse Actions?

ptatohed — Sun, 12 Mar 2023 07:06:41 GMT

If you don't want a card closed due to inactivity - credit union or bank - just use it every 4 to 6 months. Problem solved.

Re: Credit Union Closures or Adverse Actions?

fury1995 — Sun, 12 Mar 2023 15:13:35 GMT

@ptatohed wrote:
If you don't want a card closed due to inactivity - credit union or bank - just use it every 4 to 6 months. Problem solved.

The OP was looking for data points specific to Credit Union adverse actions such as credit line decreases or account closures and the circumstances and or timelines for which that occurred.

Advising use of a card every 4 to 6 months to prevent card closure (although helpful advice addressing your own post) doesn't address anything in the original post.

Re: Credit Union Closures or Adverse Actions?

coldfusion — Sun, 12 Mar 2023 16:46:54 GMT

@fury1995 wrote:
@ptatohed wrote:
If you don't want a card closed due to inactivity - credit union or bank - just use it every 4 to 6 months. Problem solved.
The OP was looking for data points specific to Credit Union adverse actions such as credit line decreases or account closures and the circumstances and or timelines for which that occurred.

Advising use of a card every 4 to 6 months to prevent card closure (although helpful advice addressing your own post) doesn't address anything in the original post.

OP was also specifically looking for "insight or DPs on how likely these actions were to happen from credit unions in general" so I don't see what the concern is.

Re: Credit Union Closures or Adverse Actions?

ptatohed — Mon, 13 Mar 2023 07:44:02 GMT

@fury1995 wrote:
@ptatohed wrote:
If you don't want a card closed due to inactivity - credit union or bank - just use it every 4 to 6 months. Problem solved.
The OP was looking for data points specific to Credit Union adverse actions such as credit line decreases or account closures and the circumstances and or timelines for which that occurred.

Advising use of a card every 4 to 6 months to prevent card closure (although helpful advice addressing your own post) doesn't address anything in the original post.

Again, if it is a card you care about keeping, just use it. Nothing else to worry about.

Re: Credit Union Closures or Adverse Actions?

Anonymous — Mon, 13 Mar 2023 11:41:00 GMT

@ptatohed wrote:
@fury1995 wrote:
@ptatohed wrote:
If you don't want a card closed due to inactivity - credit union or bank - just use it every 4 to 6 months. Problem solved.
The OP was looking for data points specific to Credit Union adverse actions such as credit line decreases or account closures and the circumstances and or timelines for which that occurred.

Advising use of a card every 4 to 6 months to prevent card closure (although helpful advice addressing your own post) doesn't address anything in the original post.
Again, if it is a card you care about keeping, just use it. Nothing else to worry about.

With the caveat that at some times, for some banks, it needs to be significant use, not just any small transaction. The Cap One CLDs of a few years back is an example (because it got me!)