Bank to cancel card for lack of usage - is it better to cancel on my own for credit reporting?

[olivia3636]

I received a notice that one of my credit cards is going to be closed because of lack of usage.  This is not my oldest card and I didn't use the card much because the limit was so low, so typically this would not be a problem.  I have already increased the limit of another card to account for the difference, so my utilization should not be impacted.

However I am in the process of building a house and started the initial part of the loan process but I will not close on my house for a few months and they will pull my credit again after the date the card is due to be closed.  Due to this, I am worried about potential impacts to my credit profile/credit score.  Specifically I am worried that the closure from the bank will look worst than if I close it.

Should I let the bank just close the card or should I close the card? Any advice would be greatly appreciated

[Shooting-For-800]

If they did not already close it, they are giving you the chance to keep it open, right?

Why not buy some gas and pay it off a week later?

[JNA1]

Most people say there's really no difference in scoring as long as the account was in good standing, but if I were in that situation, I'd either close it myself or make a charge on it to keep it active. That's just me. 
"Closed by creditor" means they were not satisfied with you in one way or another, no matter what it means in scoring.  I'd prefer not to have that associated with my profile. 

[fatcomic]

Just go buy lunch or gas with the card.  Then if you still want to close the card account wait until after you close on your house, then call the card company and tell them to close it.      

[FalconSteve]

If there's no AF, just charge at least $1 on your cable or cell bill and schedule a payment right away. Keeping the card open is always preferable to letting it close.

If you are letting it close, it really doesn't matter who closes it if in good standing (according to my Dad who has worked in mortgages and credit cards at PSECU, Chase, BoA, Fleet, Sovereign/Santander, and a couple other places over the last 35 years), but some people prefer to close it themself.

[olivia3636]

Thanks all for the quick responses.  Unfortunately they will not allow me to keep it open (I already asked). Although they are not going to close it until February, I cannot use it either.

Does this change any of the advice, knowing that there is not an option for me to keep it open?

[FalconSteve]

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@olivia3636 wrote:

Thanks all for the quick responses.  Unfortunately they will not allow me to keep it open (I already asked). Although they are not going to close it until February, I cannot use it either.

Does this change any of the advice, knowing that there is not an option for me to keep it open?

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That's bizzare. Which bank?

What is the point of them not just closing it if you can't use it? (I know, I'm asking the unknowable).

It doesn't really make a difference, but (personally) I would just close it out of a combination of spite and OCD.

[Anonymous]

I don't think anyone asked OP yet how many [open] CCs they have.  If they only have a couple, closing out a $0 balance card can adversely impact percentage of accounts with a balance, which includes AZEO percentage of course.  If they have more than (say) 5, I would just close the thing and not think twice about it.

Whether the account is closed by the consumer or the creditor is a non-factor.  All that matters is whether the account is in good standing (contains no negative information) or dirty (negative information).  The "comment" on the account means nothing and from what I've seen isn't always even accurate.  Technically a consumer isn't the one actually closing an account at all even if they initiate it, as they're asking the creditor to close it and the creditor is the one that makes those key strokes.  It's really all semantics and doesn't matter to anyone looking at the report.

[olivia3636]

I have 5 credit cards.  I have intentionally been paying down cards/keeping utilization low in preperation for building the house.  Below is my credit card mix/profile.

Navy Federal - $49k Limit - 28% utilization

Amex - $44k limit - 0% utilization 

Chase - $27k Limit - 0% utilization

Capital One CC1 - $1,800 Limit - 0% utilization (oldest credit card)

Capital One CC2 - $6,500 Limit -  0% utilization - This is the card they are closing 

[fatcomic]

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@olivia3636 wrote:

I have 5 credit cards.  I have intentionally been paying down cards/keeping utilization low in preperation for building the house.  Below is my credit card mix/profile.

Navy Federal - $49k Limit - 28% utilization

Amex - $44k limit - 0% utilization 

Chase - $27k Limit - 0% utilization

Capital One CC1 - $1,800 Limit - 0% utilization (oldest credit card)

Capital One CC2 - $6,500 Limit -  0% utilization - This is the card they are closing 

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Oh, it's a CrapOne card.... with the limits and mix of other cards you have, I personally would close it and not worry twice about it just because they are a pain to deal with anymore.   Maybe they never were great to deal with, I could have just been young and dumb at some point and thought they were great.