@Anonymous wrote:AAdvantage $2000 limit: balance $1000~
Simplicity $1980 limit: balance $300
Diamond preferred $900 limit: balance $90~
Sorry that happened. Sucks for sure. You said twice that you keep your limits at only 10% usage and were pretty adamant about that. But your two biggest limit cards show from what you posted a 50% UTL (AA $2000/$1000) and a 15% UTL (Simplicity $1980/$300) not 10%. So, just thinking here depending on your salary maybe that 50% spooked them? Doesn't make sense really but then again neither does them just closing them without knowing any other DP's than what you stated.
Sorry to hear of your three Citi closures, @Anonymous. 
It's tough losing three accounts at once. I'm also looking forward to what the letter will say. You say you made on-time payments, but did you pay the minimum due or more than that? And did your overall debt on Citi and/or other accounts increase, decrease, or remain the same during the past six months or so? Sometimes lenders will look at trends over time, and as much as they like to get those interest payments, they also like to see you chipping away at debt. I've heard that making prolonged minimum payments can give the appearance of starting to get in over your head with debt, leading to an increased risk of default.
@K-in-Boston wrote:Like most lenders, Citi should continue to report your original credit limits on these cards and utilization would be calculated the same as if the accounts are still open. For FICO scoring purposes, nothing would change at all until the balances reach $0. It is actually fairly rare for lenders to report $0 or the current balance as the limit on closed accounts. Once the accounts are paid to $0, this would only affect your scores if they caused your aggregate utilization to exceed a threshold or if they caused the percentage of accounts reporting a balance to increase (although the latter is unlikely as all 3 were reporting balances).
As for AAdvantage miles, those should indeed be automatically transferred to your frequent flyer account each month, and while any miles earned this statement may be forfeited, unless there was an egregious violation of your cardholder agreement they would not be taken back from American Airlines.
My experience has been that the balances will be counted but the limits will be disregarded in FICO calculation of aggregate revolving utilization.
And my experience has been that with respect to the individual accounts, some lenders will report an account limit as the present balance rather than the actual credit limit prior to closing, thus making the account appear maxed out, while other lenders will continue to report the actual limit prior to closure.
Bottom line, it's important to pay closed accounts down to zero ASAP.
@SouthJamaica wrote:
@K-in-Boston wrote:Like most lenders, Citi should continue to report your original credit limits on these cards and utilization would be calculated the same as if the accounts are still open. For FICO scoring purposes, nothing would change at all until the balances reach $0. It is actually fairly rare for lenders to report $0 or the current balance as the limit on closed accounts. Once the accounts are paid to $0, this would only affect your scores if they caused your aggregate utilization to exceed a threshold or if they caused the percentage of accounts reporting a balance to increase (although the latter is unlikely as all 3 were reporting balances).
As for AAdvantage miles, those should indeed be automatically transferred to your frequent flyer account each month, and while any miles earned this statement may be forfeited, unless there was an egregious violation of your cardholder agreement they would not be taken back from American Airlines.
My experience has been that the balances will be counted but the limits will be disregarded in FICO calculation of aggregate revolving utilization.
I believe we have had this conversation on at least one prior occasion. Front-ends of credit monitoring services will often display the balance lumped in with revolving balances, exclude the credit limit from revolving limits, and then incorrectly calculate the revolving utilization based on those numbers. The underlying FICO algorithms that generate scores treat revolving accounts that are closed exactly the same as when they were open as long as a credit limit and a positive balance are still reporting. In cases where the limit is reported as $0 or equal to the amount of the current balance, that is indeed harmful to scores as the balance would be calculated but not the limit in the prior example, and in both cases the card would be at or above 100% utilization.
One notable example of that would be a large HELOC (let's go with $100k+). When opened, most credit monitoring front ends will show the balance in total revolving balances, not include the limit in revolving limits, and then factor in that balance into your revolving utilization displayed - however the actual FICO scoring algorithms completely discard all current balance and limit data from large HELOC accounts. Once a draw period has ended, the account is updated with the account being closed due to end of draw period, the monitoring front-ends still continue to show the balance in revolving utilization, still don't show the original limit in revolving limits, and still factor in the remaining balance but not limit into revolving utilization. Meanwhile, FICO scoring algorithms are still completely ignoring the account's balance and limit.
