Master Synchrony Account Closure Thread

[Anonymous]

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@coreysw12 wrote:

Agreed, but when I said "I think it happens because...", by "it" I meant people ending up with lots of products from those two banks, I wasn't referring to getting AA's. I agree that the AA's were largely avoidable for the reasons you mentioned, and that the act of simply having multiple cards from those banks isn't inherently a cause for AA.

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I meant that people end up with a lot of their cards because they specifically seek them out as easy targets because they're easy to get approved for. Then they start requesting CLIs and the exposure gets to be too much and we end up with threads like this. 

[Anonymous]

This madness with Synchrony Bank just abruptly closing out accounts. They claim its a routine practice of checking credit scores  but I've had my PayPal and PayPal Credit and Amazon Store Card for years to decades....They need to be stopped ✋

[Horseshoez]

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@Anonymous wrote:

This madness with Synchrony Bank just abruptly closing out accounts. They claim its a routine practice of checking credit scores  but I've had my PayPal and PayPal Credit and Amazon Store Card for years to decades....They need to be stopped ✋

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Ummm, unless I misunderstand the relationship between a card holder and a card issuer, the former has the right to use the card only at the pleasure of the latter.  I do not believe it is written anywhere where you have unassailable rights to keep the card for as long as you want.

[sarge12]

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@Horseshoez wrote:

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@Anonymous wrote:

This madness with Synchrony Bank just abruptly closing out accounts. They claim its a routine practice of checking credit scores  but I've had my PayPal and PayPal Credit and Amazon Store Card for years to decades....They need to be stopped ✋

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Ummm, unless I misunderstand the relationship between a card holder and a card issuer, the former has the right to use the card only at the pleasure of the latter.  I do not believe it is written anywhere where you have unassailable rights to keep the card for as long as you want.

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Exactly, Credit cards are not a right, nor is the retention of a card guaranteed by the cardholders great or even perfect payment history. The card issuer can, and often  does, close accounts for any reason or no reason, and so can the card holder. It is incumbent on the part of the card holder to prevent great harm to their credit by limiting the percentage of credit limits controlled by any single issuer. The issuers sometimes look to decrease their risk during economic downturns, when history shows the percentage of card holders who default increases. Many re-builders use store cards and high annual fee cards to re-establish their credit. Why should Synchrony be required to keep a Victoria Secrets card open for someone that never uses it? Card holders would be enraged if they were required to keep a Credit One card open, and continue making the AF payments after the card is no longer needed because their scores increased. I am not saying I agree with the way Synchrony and Commenity conduct their business, I don't. It is however, common knowledge that they do these wholesale closure of cards, even if the cardholder has a perfect payment history. I have no cards issued by either, but would get one if needed, to save 5% on a major purchase for example. I would never recommend putting too many eggs in that basket, or any other issuers basket. Synchrony and Commenity are high risk/reward cards. The consumers can, and often do, open a lot of their cards to increase their credit scores faster than would otherwise be possible. Doing so comes with the risk that those limits can just as easily result in huge losses of those credit limits, resulting in a large utilization increase. A high score built on such a weak foundation is a shortcut that is best to avoid.

[sarge12]

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@coreysw12 wrote:

Great post. Definitely agree that it's best too avoid an eggs all in one basket situation if you can. I think it happens a lot with Synch and Comenity because they offer sooooo many different products, it's almost inevitable for someone to end up with at least some of their cards - and too many of them if they're not careful.

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I have about 20 premium credit cards, but zero store cards. I am not against getting one if needed for 5% savings on a major purchase. I do however maintain a strict rule against ever having over 2 cards from any single issuer. No single issuer can cause a major ding to my scores by closing all my cards with them. I chose not to give them such power. If I was doing a major re-model of my house, I might very well get a Lowes card. I would consider it a temporary card, and treat it as such.

[privateone]

There is proof of what the senior contributors are saying about people getting trigger-happy with these cards. I specifically used these to rebuild my credit knowing that they were easy to get and I could get regular easy credit line increases. Now, this is coming back to burn me despite my bankruptcy falling off my record back in December.

Visas and MasterCards to replace the lost credit lines are now hard for me to get because I have too many inquiries on my credit report. The good banks are also telling me I have enough available credit. So, I'm left with bad credit credit cards that don't have very high limits.

My solution was to apply for personal loans to get the rest of my cards paid off and lower by debt ratio.  I paid off the cards more likely to grant me a credit line increase by paying them off.  I'm hoping with the low debt ratio that now I will start getting offers in the mail for better credit cards.

[designated_knitter]

So today the fed announced that they would not extend temporary relief from capital-requirement rules for banks that is set to expire on 3/31.  

If synchrony is overextended but has been hiding that fact because they've been excluding Treasuries, then they're going to have to "pay the piper" starting at the end of the month.

In other words,  expect Synchrony's own over-leveraged exposure to trickle down to us peons and more account closures to come our way.

May be a good time to pay off as much Synchrony debt as you can (or refinance using balance transfers) to avoid be caught flat-footed.

To everyone who has had their accounts closed, maybe you can take a little comfort in that Synchrony may start feeling the heat from their OWN "risky behavior" and they were just blaming YOU to avoid responsibility for their own bad business decisions (I.e. selling off WalMart last year cost them a lot more than they thought it would!)

[Anonymous]

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@designated_knitter wrote:

So today the fed announced that they would not extend temporary relief from capital-requirement rules for banks that is set to expire on 3/31.  

If synchrony is overextended but has been hiding that fact because they've been excluding Treasuries, then they're going to have to "pay the piper" starting at the end of the month.

In other words,  expect Synchrony's own over-leveraged exposure to trickle down to us peons and more account closures to come our way.

May be a good time to pay off as much Synchrony debt as you can (or refinance using balance transfers) to avoid be caught flat-footed.

To everyone who has had their accounts closed, maybe you can take a little comfort in that Synchrony may start feeling the heat from their OWN "risky behavior" and they were just blaming YOU to avoid responsibility for their own bad business decisions (I.e. selling off WalMart last year cost them a lot more than they thought it would!)

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Yeah I saw that too. Maybe I should try to get that Affinity FCU card next month in case Sync comes after my Amazon Store Card...

[sarge12]

     Just a final bit of advise for anyone who chooses to take it. I see many who express that store cards are inevitable, or a necessity. This is obviously not true, because I have none. What is true is that building higher credit scores while avoiding store cards will usually be a slower process. It also will be built on a much stronger foundation if you also limit exposure to any single lender. Some are more fanatical, and actually compare store credit cards to CFA accounts. This is not a good comparison at all. The mere existence of a CFA account can drop some scores, even if payed perfectly. That is not true with store cards like many have with Synchrony or Comenity. The issues are more related to how easily obtained these cards are, and how due to this, and how many retailers are issuing cards through these banks. That often leads many to allow more exposure to these banks than they should.

    You do not have to accept as inevitable that you will need store cards in your credit card profile to increase your scores. Yes they can be a shortcut, but like many shortcuts there are hazards there that just do not exist with premium credit cards with Visa, Mastercard, Amex, or Discovery.networked cards. Only the cardholder can decide if they need such a rapid increase in scores to be worth the risk of overexposure to a single issuer. If it results in a lower mortgage rate in a shorter time frame, it may be worth it to you.

    What I hope the reader gets out of this post is this fact. Short of errant data or identity theft, you, the consumer, can and should 100% control your credit reports and scores. Arm yourself with the facts about credit scores, and how they work, and you can, in time, achieve 800+ scores, and maintain them no matter what Synchrony, or any other card issuer does. You do not have to give any card issuer the ability to make your scores drop significantly. To avoid that possibility, you must however, take great care about when and where you apply for cards. I also must maintain a policy of always PIF every single card, every month, but that might not be necessary for others. I know me well enough to know carrying a balance could lead to my loss of control. I will not have more than 2 cards at any single issuer, and I always PIF. This is not the only way to achieve very high scores, and maintain them, but it is the only way that works for me.

    I had to file bankruptcy twice to find out that only by habitually PIF could I control my use of credit. Only by limiting my exposure could I prevent some nervous issuer from causing massive drops to my scores by closing their cards. I also find Quicken, or other such software a necessity, as is setting up auto-pay for every card. I have never yet had auto-pay actually pay any credit card, but it is a safety net if needed. I hope someday reading on these forums, horror stories of how badly their scores got hit due to any issuer closing cards, is a thing of the past.

[Anonymous]

Well, now that I've established some credit worthiness, it looks like I may want to pare down my synchrony accounts.