Preventing Credit Card Accounts from Getting Closed or Reduced

[Anonymous]

Over the years, I've hard 3 Chase credit cards. Four years ago, Chase closed a unused credit card I'd had for 20+ years (I hadn't used it in a while). Two years ago, a Chase rep suggested to move the majority of the credit line from my unused credit card to the used credit card to improve my utilization percentage, which resulted in one Chase cc with $800 credit line and another cc with $39K credit line. This process  also hurt my FICO score because the two credit cards had different closing dates so TransUnion processed the credit lines changes at separate times in a negative way. Then, Chase closed the $800 credit line due to lack of use as well, which again affected the age of my credit since they have closed my two oldest credit cards!  I still have and use the $39K credit, but I'm not utilizing that much credit.

More recently, Nordstrom reduced my open credit line from $25K to $5K because of lack of use.  This also hurt my score.  

I've paid off my balances with all credit cards and only use 1-2 credit cards to keep them active, but now constantly worried about the effects of the accounts automatically closing and automatic credit line changes.  My questions are:

1. What is a good strategy to prevent a credit card from getting automatically closed?  For example:

a) 1 transaction every 3 months? or 6 months?

b) How small or large should the transaction be? 

c) Does it help if I charge the account and pay it off the same month? or do I need to let the balance hit the credit bureau?

2. How can I prevent Chase or others from automatically reducing my credit line?  How much percentage of the credit line should I utilize before a bank flags my account to be adjusted?  

3. Should I just let this go and let banks close whatever accounts or adjust any credit lines and let my FICO normalize on its own?

Thanks!

[FireMedic1]

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@Anonymous wrote:

Over the years, I've hard 3 Chase credit cards. Four years ago, Chase closed a unused credit card I'd had for 20+ years (I hadn't used it in a while). Two years ago, a Chase rep suggested to move the majority of the credit line from my unused credit card to the used credit card to improve my utilization percentage, which resulted in one Chase cc with $800 credit line and another cc with $39K credit line. This process  also hurt my FICO score because the two credit cards had different closing dates so TransUnion processed the credit lines changes at separate times in a negative way. Then, Chase closed the $800 credit line due to lack of use as well, which again affected the age of my credit since they have closed my two oldest credit cards!  I still have and use the $39K credit, but I'm not utilizing that much credit. Closed accounts still count on the age factor for your score until it falls off 10yrs later.

More recently, Nordstrom reduced my open credit line from $25K to $5K because of lack of use.  This also hurt my score.  Credit line decreases dont hurt a score. FICO doesnt care about credit limits. Its the % of one or the combined util of all the cards. Higher balances. Lower scores.

I've paid off my balances with all credit cards and only use 1-2 credit cards to keep them active, but now constantly worried about the effects of the accounts automatically closing and automatic credit line changes.  My questions are:

1. What is a good strategy to prevent a credit card from getting automatically closed?  For example:

a) 1 transaction every 3 months? or 6 months?

b) How small or large should the transaction be? 

c) Does it help if I charge the account and pay it off the same month? or do I need to let the balance hit the credit bureau?

Get a tank of gas or go to the movies. Then pay it off before it cuts. The computer wants to see some usage. Some say a stick of gum!

2. How can I prevent Chase or others from automatically reducing my credit line?  How much percentage of the credit line should I utilize before a bank flags my account to be adjusted?  

3. Should I just let this go and let banks close whatever accounts or adjust any credit lines and let my FICO normalize on its own?

Thanks!

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Alternate the cards you dont use much. Put the everyday things you use a regular card for then pay it off before statement cuts. Rotate each month. Then each card will have its turn in the usage merry go round. But Chase can be a tricky one. They make moves with/without reason at times. Finicky.........

[pinkandgrey]

The above advice is good if you're desperate to retain those cards. Just putting a small autopay or something on them will do the trick. However, my personal suggestion is to close them yourself. Don't let the lenders do it for you. If you don't use or want the cards, just be rid of them! They will stay on your account and factor in to AAoA for many years anyway. 

Good luck! 

[Anonymous]

Hmm, it appeared to me the credit line decrease hurt my score.  I was getting the myFICO daily alerts, and the day TransUnion reported my credit line went from $11K to $800, I lost 12 points. Few days later when the other credit card went from $28K at 89% utilization to $39K at 64%, my score only went up by 3 points, which felt like the net of a negative hit by the credit line combined with the positive hit of the utilization improved.  

I recently lost 30 points.  I don't have daily alerts at the moment, but the only thing I could correlate was the Nordstrom adjustment.  I might be overlooking something.  

Thanks for the other advice!

[Anonymous]

Yeah.  I may just concentrate on the older cards and the ones with the best perks.  My oldest credit card now is Macys, so I think that's a sign that I should go shopping for a little something.

Thanks for the advice!

[credit_is_crack]

I buy stuff on amazon frequently and also have a ton of cards. Some are used religiously and are rotated every month, but there are plenty more that just sit there. For those I charge $2 to each of them every 60-90 days to add to my amazon gift card balance. Of course when I end up buying something I just use up the gift card balance so I'm really just shuffling money around.

I've done this for years and never had an issue with accounts being closed or limits being reduced. Maybe once a year i'll legitimately use it for shopping, but normally its just a small charge and a small payment following it. 

[SunriseEarth]

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@Anonymous wrote:

Hmm, it appeared to me the credit line decrease hurt my score.  I was getting the myFICO daily alerts, and the day TransUnion reported my credit line went from $11K to $800, I lost 12 points. Few days later when the other credit card went from $28K at 89% utilization to $39K at 64%, my score only went up by 3 points, which felt like the net of a negative hit by the credit line combined with the positive hit of the utilization improved.  

I recently lost 30 points.  I don't have daily alerts at the moment, but the only thing I could correlate was the Nordstrom adjustment.  I might be overlooking something.  

Thanks for the other advice!

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I'm guessing that the reduction of the older CC caused your overal UTIL to temporarily increase, as you appeared to have "less" overall credit.  I think it was a good move to reallocate the CL to the card with the higher UTIL, and I would have advised the same.   However, because the old account closed, that dropped your overall UTIL again and you also have fewer zero accounts.  For optimal scoring, at least half of your revolving lines should have a zero balance.  

As for how often to use your cards, I'd recommend an absolute minimum of once a year, but this will vary by creditor (this is why others recommend every 6 months).   Barclay closed my Uber Visa when I went 12 months without any usage.  For my Cap One QS, they sent me a letter saying I didn't use my account in two years and that I would need to use it before October or they would close it.  I made a $5 purchase on YouTube with it.  

You can make a minimal purchase if you are trying to maximize rewards on other cards, meet spending bonuses, or whatever other reasons you have to use your other cards instead.  

[FireMedic1]

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@Anonymous wrote:

Hmm, it appeared to me the credit line decrease hurt my score.  I was getting the myFICO daily alerts, and the day TransUnion reported my credit line went from $11K to $800, I lost 12 points. Few days later when the other credit card went from $28K at 89% utilization to $39K at 64%, my score only went up by 3 points, which felt like the net of a negative hit by the credit line combined with the positive hit of the utilization improved.  

I recently lost 30 points.  I don't have daily alerts at the moment, but the only thing I could correlate was the Nordstrom adjustment.  I might be overlooking something.  

Thanks for the other advice!

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The minor rise in scores was from going from one util % to a lower one. As you pass each one more points will be rewarded. Known thresholds are 88.9%, 68.9%, 48.9%, 28.9%, 8.9%. So you passed in a way 2 thresholds. The biggest one is passing the <8.99%.

[cashorcharge]

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@credit_is_crack wrote:

I buy stuff on amazon frequently and also have a ton of cards. Some are used religiously and are rotated every month, but there are plenty more that just sit there. For those I charge $2 to each of them every 60-90 days to add to my amazon gift card balance. Of course when I end up buying something I just use up the gift card balance so I'm really just shuffling money around.

I've done this for years and never had an issue with accounts being closed or limits being reduced. Maybe once a year i'll legitimately use it for shopping, but normally its just a small charge and a small payment following it. 

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That's a great idea @credit_is_crack and sounds much simpler than how I've been juggling. Thanks!!!