Bank closed my credit card account!

[Anonymous]

What should I do?  I got a letter yesterday from Chase stating they have closed one of my credit cards with them since I haven't used it in the past two years.  They will be notifying the credit bureaus.  I am concerned about what this will do to my FICO scores.  I've had this credit card for many years. 

Another related question:  One of my other credit cards with Chase is an airline rewards card, and I have benefited significantly from those frequent flier miles.  My annual fee of $60 is due this month, and I just can't stand the idea of paying $60, so I've been tempted to close the account.  However, again, I'm concerned with the effect on my FICO scores.  I just hate paying $60 for the privilege of using that card!

Any advice would be appreciated!

(P.S. Last time I checked a couple of months ago, one of my FICO scores was in the high 700s.)

[YoungInvestor]

I received the same letter in the mail. Looks like Chase is trying to get rid of open credit lines. I called and the rep told me there was nothing I could do about it. It's per company policy. So now what do we do?

Well, for one, there is nothing more we can do other than calling Ex, Eq, Tu, and asking how, if at all, this will effect us.

Overall, I wouldn't be too worried because it will state on the account that you paid in full. It will, however, take away from your credit utilization. For me, that only means a couple thousand of dollars off my $35k total credit utilization amount, and I never carry a balance.

Good luck!

[Anonymous]

Chase pulled this on me this summer.  I had 2 Chase Visas from their Bank One takeover.  I used both and had $30K credit total.  I would move avail CL between the two depending on their bal xfer offers, which I noticed were not both the same starting last spring.  Then they stopped offering bal xfer on one in May.  Then they closed that card which had a $12K CL and had mailed me that they would do it on a certain date.  I was away, didn't get the mail but happened to xfer some of that CL from about to be closed card to the other card a few days before it was closed.  Thus, I saved about $7K CL and only lost $5K CL.  If I hadn't moved the CL, I would have lost the whole CL.

If the account is still open and they gave you the close date, call their CS and say you want to xfer some (most) CL from one card to the other.  If they ask why, most likely not, say you want to bal xfer a large amount and need to combine the CL onto one card. (the good one) .The CS rep has no immediate knowledge of an upcoming closing if acct still open and can do the xfer immediately. (That may have changed since the summer)

Credit report just says account closed, no reason given.  Chase CS rep just said bank chose not to renew the card. 

I bal xfered $23K at 0%, lucky I did because now they may have cut more of the avail CL down!!!

Message Edited by BuyGoldNow on 12-02-2008 07:26 AM

Message Edited by BuyGoldNow on 12-02-2008 07:35 AM

[Chopbrocoli]

The only thing it can have an affect on your credit report is your average account history and credit to debt ratio measurement. If this is one of your oldest account on your report, it might have a slight ding. But if you have many credit accounts and have a long credit history, then I probably would no worry at all. Since you do not have a balance on your Chase, it will be reported in good standing. But if you only have a few credit accounts, the decrease in utilization might ding you as well.

[cobaltnv]

If you want to avoid paying the $60 annual fee you could call chase and ask for a product change to one of their non-annual fee cards. I just changed my card to their amazon rewards card with no problem. They asked for a reason. I told them I was not using my current card as the rewards were no very good, and I buy a lot of things on amazon. She said ok. It is certainly worth thinking about if you really do not want to pay the af. 

Cheers 

[cobaltnv]

I thought I would add one more thing. Others may cartainly disagree with me, but I have found many airmiles cards not nearly as good as other rewards cards. For example I have a fidelity visa which pays be 1.5% cash back. For every 5000 pts earned I get $75 deposited into my account. Assuming one can get a rewards flight for 25000 miles (good luck) that translates into 5*75 = $375. Plus however many years of annual fee necessary to generate 25000 pts (at least 2 for me = $495 for the "free" ticket). The exception of course is if you do not fly that frequently and you need some activity on your milage account to keep miles from expiring.  

[haulingthescoreup]

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Chopbrocoli wrote:
The only thing it can have an affect on your credit report is your average account history and credit to debt ratio measurement. If this is one of your oldest account on your report, it might have a slight ding. But if you have many credit accounts and have a long credit history, then I probably would no worry at all. Since you do not have a balance on your Chase, it will be reported in good standing. But if you only have a few credit accounts, the decrease in utilization might ding you as well.

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Even closed accounts are supposed to stay on your reports for ten years from closing, so any ding from history loss will occur far in the future. I wrote "supposed" as EQ has been know to stop reporting closed accounts much sooner than 10 years.

Even though OP had an involuntary CC closure, fused's "Closing Credit Cards" can give some things to watch for. It's linked in my siggy, and it's also stickied at the top of this board.

[Anonymous]

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@haulingthescoreup wrote:

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@Chopbrocoli wrote:
The only thing it can have an affect on your credit report is your average account history and credit to debt ratio measurement. If this is one of your oldest account on your report, it might have a slight ding. But if you have many credit accounts and have a long credit history, then I probably would no worry at all. Since you do not have a balance on your Chase, it will be reported in good standing. But if you only have a few credit accounts, the decrease in utilization might ding you as well.

---

Even closed accounts are supposed to stay on your reports for ten years from closing, so any ding from history loss will occur far in the future. I wrote "supposed" as EQ has been know to stop reporting closed accounts much sooner than 10 years.

Even though OP had an involuntary CC closure, fused's "Closing Credit Cards" can give some things to watch for. It's linked in my siggy, and it's also stickied at the top of this board.

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Hi haulingthescoreup (or other members in this forum):

Can you point me to an authentic source (such as myFico or other site) where I can read about this:

Even closed accounts are supposed to stay on your reports for ten years from closing, so any ding from history loss will occur far in the future.

I was not aware of this information...good one to know. I mean I was aware that they STAY on your report for 10 years, but I was *not* aware that they STILL COUNT towards the "history" and the "average age" calculations. Thats what I want to re-confirm.

Found this one additional thread - not sure how accurate:

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=3922

Message Edited by Jenkins32 on 12-19-2008 06:35 PM

Message Edited by Jenkins32 on 12-19-2008 06:47 PM

[haulingthescoreup]

Well, this was fun to hunt down, and the basic answer is, it's not mandated by law, but it is done by custom.

If you have any closed accounts, especially on Experian, look on one of the full reports that you get from them. Check the account to see if it has this under "status details" (from my EX full report):

AMERICAN HONDA FINANCE

Address:
8601 MCALPINE PARK DR ST
CHARLOTTE, NC 28211
No phone number available
Account Number:
1717....

Status: Paid,Closed/Never late.
Status Details: This account is scheduled to continue on record until Mar 2013.

Date Opened:
06/2001
Reported Since:
06/2001
Date of Status:
03/2003
Last Reported:
03/2003

Note that the scheduled fall-off date is 10 years from when I paid off the lease.

The FCRA (Fair Credit Reporting Act) states that most lates can't be reported over 7 years after DOFD, and most of the rest at 10 years, but it doesn't mandate that positive reports must be reported for 10 years. (Write your representatives in Washington, please.) But this is the tradition in the credit industry, and in most cases, it holds true, except when it doesn't. Equifax is the worst about losing old closed accounts early, as they have a problem with inadequate database storage.

Many people are confused about the 7 year limit for reporting most derogatories. They think that this means that the account will disappear after seven years, which is incorrect. The derogatory itself will fall off after seven years, but the account itself will continue to report for 10 years after closing, if the CRA behaves itself.

Here is a myFICO document stating that closed accounts do continue to report, but they don't say for how long:

Closing an account will not remove it from your credit report. The payment history on closed accounts will continue to be displayed and considered in the calculation of your FICO score.

http://myfico.custhelp.com/cgi-bin/myfico.cfg/php/enduser/std_adp.php?p_faqid=13

All I can tell you beyond that is that we (the combined membership here) have seen this on our reports, and it has also been confirmed by myFICO sources.

[Anonymous]

haulingthescoreup,

Thanks a lot for your reply. I appreciate it.