Discover Closed my Account without Warning

[GrayStar]

How dare them. I've had the card since 2018 when it was secured and was graduated 9 months later. Since then, I've been using the card lightly. They sent me an email yesterday and here's their reason:

Dear GrayStar,
   

As a result of a recent review of the Discover it® chrome card account referenced above, we have closed your account as of the date of this letter.

This action was taken for the following reason(s):

Inactivity on your account(s)

Serious delinquency

Length of time accounts have been established

We will credit your account with your Cashback Bonus® (or Miles) balance if you have one.
 

What do you all think about this? All advice is appreciated. 

[Slabenstein]

When was the last time you used the card?  I believe that Discover automatically closes accounts at six months of inactivity.

[GrayStar]

The last time I've used the card was back in April, according to the statements. I think they should have given me a warning instead of just automatically closing it and this will hurt my overall credit utilization and AAoA.

[coldfusion]

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@Slabenstein wrote:

When was the last time you used the card?  I believe that Discover automatically closes accounts at six months of inactivity.

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If they did that my older card would have been closed long ago.

Was there a recent derog reported, a large spike in reported utilization, or a recent app spree successful or not?

[GrayStar]

Well, the last delinquency I had was early 2019 when I had a Credit One credit card. I'm glad to kick them to the curb. They never processed a payment that I'd sent which made me 30 days late. My overall utilization across all cards is between 11-13% currently. I did apply and been approved for 4 other cards during the last 6 months. 

[AverageJoesCredit]

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@GrayStar wrote:

Well, the last delinquency I had was early 2019 when I had a Credit One credit card. I'm glad to kick them to the curb. They never processed a payment that I'd sent which made me 30 days late. My overall utilization across all cards is between 11-13% currently. I did apply and been approved for 4 other cards during the last 6 months. 

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This derog along side that your profile probably had issues before originally being approved for a secured card most likely caused closure. No way was it  7  months non usage. Its hard to really say as you have not given sufficient info about your current overall profile like scores, aaoa, inqs , etc and how your profile looked pre Discover. Sorry about the closure though

[GrayStar]

That's alright. Things are hitting hard during the pandemic. I'm sure I'm not alone with the account closures. Before I got the Discover secured card back in 2018, I did had one charge off and a couple of collections. The charge off is paid even though it's still reporting. The collections are also paid and removed from the report. The score at the time of closure was 693. AAoA is 2 years. 25 inquiries. That still doesn't justify why they closed the account when I was making payments on time, never been late. In that case, the other cards that I have, don't you think they will follow suit like Discover?

[Remedios]

@GrayStar  I'm sorry this happened to you, but I don't really think this is The Pandemic issue.

Just read above, lack of use,new negatives, declining scores, four cards in six months...that's home made perfect storm. 

While pandemic has had a wide impact on lending, it shouldn't be blamed for everything. It's appealing to have something outside of what we do to blame, but that doesn't make it right. 

Besides,people were blaming panemic in March for issues that started long before. 

While that's really irrelevant,no one learns anything or adjusts behavior if we just conveniently blame The Pandemic. 

[Anonymous]

I think your overall credit profile was iffy in their view and when you went 6+ months without using the card, that was it for them.  I would suggest always putting a small transaction on your cards every 3-6 months tops going forward.  To answer your question regarding your other lenders, no I don't necessarily think they'll follow what Discover did.  All of them have their own protocols.  If you do have other cards that have been sitting around idle though, go ahead and put a tiny purchase on them to show activity.  Also you mentioned that Discover closing your account will hurt your AAoA.  That is not true.  All accounts whether open or closed on your credit report are averaged into your AAoA equally.

[K-in-Boston]

Agree that is a lot of factors pointing to a not-unexpected account closure, especially with very aggressive credit seeking and a recent derog.  While the closing of the Discover card in and of itself isn't likely to make other lenders follow suit, the factors that lead to it certainly could.  As for AAoA, nothing to worry about until the card eventually falls off of your reports.  Closed accounts are treated the same as open accounts for age in FICO scoring.