Capital One (Grr) - Want to Close Limit not Reported - Effect?

[Anonymous]

My scores are all above 800!  Got notice that Capital One is for NO REASON raising "fixed" rate from 6.9 to 15.9.  They did this to me back in 2002 causing me to close the "current" account then and open this "new" one (started in 2002).

I've had enough and will NOT be opening ANY OTHER account with them EVER. 

Capital One has never reported credit limits to the Big 3.  They will finally begin doing so at the END of THIS year 2007.  Question..since they do not report CL how does the card factor in the ratio of used vs limits?  I've only heard RUMORs that they use highest balance instead but no one will confirm that is what CO says.  The reason I ask is that I do not want my score to go down by eliminated a zero balance but $7K limit card but since the limit is not reported to Big 3 it may not lower it at all? 

Would love to hear from anyone who knows for SURE how a card that does not report CL is factored into the ratio.  The $7K limit represents about 9.5% of TOTAL CL.

Is the key that if I close it I have to have TOTAL ratio still under 9% of all remaining cards and will be OK regardless of how this one is or is not counted/used now?

Because I REALLY want to close it for principle..not just do as I have done lately and not use it.  And I do NOT want my score to go down ONE POINT because of it! 

[Anonymous]

One trick that I've seen used with Cap One is this:

Max out the card, then pay it back off immediately (obviously only if you have the cash - or you can cash-advance or transfer something to it and back to another card.  You might pay a month's worth of interest.  The idea is to max the balance at the limit, or close to it.  They DO report the highest balance ever on the card as the "limit" so there is a workaround by doing it this way, even if you pay it right back off immediately.

[Anonymous]

Honestly I am not so sure that the FICO uses that high limit because on all three reports there is a BLANK with limit and I've read on other message boards about people who ONLY have a CO credit card and their FICO explanation says their utilization is way too high when they are really at say 5% for that one and only card compared to LIMIT and say 9% to HIGH CREDIT PAST.

Also I've just read on HERE two completely different opinions..

One says the COMBINED balance to CL is what is used.

ANOTHER says it is card by card and if ONE card is at say 25% even though TOTAL to CL is well under 10% it WILL hurt your score.

Anyone know for sure?  Most say that closing a card WILL LOSE you the utilization ratio but keep "age" until 10 years.  I have ONE card that dates way back which keeps my score high and I hope to never close it because the rest come about 15 years later (never understood this stuff when I was young so just had/kept the one card for the first 15 years!).

I would never charge to max and won't be charging ONE DOLLAR to CO ever again.  And I'm not so sure that what THEY say THEY report IS factored into the utilization FICO scoring...the high credit on that particular card THEY say is about 50% of the limit..I don't recall ever having it that high ($3,500) but maybe I did.  Point is am I losing ZERO limit, $3,500 or the "real" limit of $7,000 (can't be the latter because they don't report it) when I CLOSE the card.

One last thing about CO..when I closed the one in 2002 that was eight years old to get the 6.9 (now 15.9) rate on THIS one even after THREE letters they never did make the notation CLOSED AT CONSUMER REQUEST either.

I REALLY don't like them and have called them four times in the past 24 hours up to supervisor then manager level to let them know!  I stumbled upon the consumer group posts about them..wish I had read that before!  WOW.

[Anonymous]

DW has CapOne and it appears that high balance is used as a surrogate CL when scores are computed. The CR only displays the data fields as submitted by the CCC, that's why you don't see the high balance duplicated in the CL field.

Assuming the CC doesn't have an annual fee, the maximum benefit to yourself, and the maximum nuisance for an annoying CCC, is when you keep the CC tucked in your sock drawer, pull it out once a year to make a minor purchase, and PIF immediately after the statement date. The CCC is then required to generate (and usually mail) a statement, and that expense will exceed the merchant fee they receive from the transaction.

If you close the account, you really end up hurting yourself more than the CCC. You lose any utilization benefit, you limit your history benefit to 10 years, and the CCC won't even notice you're gone.

[Anonymous]

Yeah..I have realized that it is "worse" for them if I keep the account open and likely better for me.

BUT since I hardly ever used the card and since only the high limit is used to for CL (UNTIL END OF THIS YEAR) I will only be "losing" $3.7K CL overall...less than 5% of my total CL. 

Again..I sure would like to know if utilization is based on COMBINED ALL CARD totals OR card by card. 

I've seen so many contradictions posted here..hard to tell.  I guess maybe no one knows for sure?

Either way with such a small amount and virtually no history on THIS CO card not likely to impact much losing high credit...BUT stand to lose "more" if I wait and cancel when they DO begin reporting limits at end of the year.

[fused]

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ficoscoregirl wrote:

Yeah..I have realized that it is "worse" for them if I keep the account open and likely better for me.

BUT since I hardly ever used the card and since only the high limit is used to for CL (UNTIL END OF THIS YEAR) I will only be "losing" $3.7K CL overall...less than 5% of my total CL. 

Again..I sure would like to know if utilization is based on COMBINED ALL CARD totals OR card by card. 

I've seen so many contradictions posted here..hard to tell.  I guess maybe no one knows for sure?

Either way with such a small amount and virtually no history on THIS CO card not likely to impact much losing high credit...BUT stand to lose "more" if I wait and cancel when they DO begin reporting limits at end of the year.

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I don't have much experience with Cap1, but these threads will shed light on what the impact might be to your scores if you close this CC.

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=30100

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=4402

[MidnightVoice]

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ficoscoregirl wrote:

Again..I sure would like to know if utilization is based on COMBINED ALL CARD totals OR card by card. 

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The mearest we have to a consensus is - BOTH.

Overall the util needs to be as low as possible, below 10%.  But it is possible that 4 cards with zero and one maxed out will hurt more than evenly spread allocations.  But if you have that $70K limit and you are keeping below 10%, that is $7K debt.  If you PIF every month it makes no matter where the money is, if you are carrying it over every monmth you want it on the lowest interest card.  And with scores over 800, it shouldn't hurt to much.

[Anonymous]

This sure is one quirky board..anytime I go to reply it takes about ten or so tries as it hangs up and says Flooding Detected Please wait a few seconds and try again.  I wait minutes and in some cases partial hours and still get it.

ANYWAY..I had already read the threads referenced above.  It seems that no one is exactly sure re: Utilization scoring.  My own experience tells me it is CARD BY CARD or at least that is part of it because if I have one card at 25% and the rest all at zero my score is lower than when I have the same dollar amount TOTAL but spread over the highest limit cards evenly the score is higher.

So I don't think the explanation in those threads is 100% saying it is combined use vs available.  I do think the utilization STOPS when the card is closed and only the history (aging) remains.  I REALLY need to keep that one old card or my score will go WAY down (it is not THIS CO card thank goodness).  I was so silly long ago to just have ONE card for the first 15 years. I would advise new credit young people to get a few that you can hopefully hang onto for a long long time.  That was if one is closed you still have the "oldest" history to factor into aging.

Guess I will have to think about this.  It's either cancel NOW before they DO start reporting actual limits or never I suppose because the limit is double the highest balance. I sure wish I knew why they got away with that for so long.

And worse...after reviewing consumer reports..it seems Cap One was NOTORIOUS for giving out new cards with $3K limit then with NO NOTICE deciding that was a glitch and adjusting 10,000 or more cardholders limits DOWN A LOT causing them to suddenly be over limit and charging them accordingly.  This combined with NOT REPORTING limit to agencies really put those customers in a bind.  Can you imagine?  You get a card that says you have $3K limit.  Let's say you charge $1K.  Suddenly on your next bill you get charged $29 (soon to go up to $39) for over limit and find out your limit was changed to $750 after you had received a letter saying it was going UP from $3K to $3.5K. 

I was truly amazed at how widespread THAT was and the non reporting of limits.  Oh and when you wished to pay your card in full BEFORE the due date.  They would STILL charge interest and keep billing you after you closed the card!  Every CC I've ever used EXCEPT them if you pay in full before due date you do NOT get hit with the interest.

I was also amazed at the massive lawsuits out there by various state attorney generals on behalf of their state's "wronged" citizens and in fact some new legislation is in the works by one NY legislator to try and mandate that practices like this and the misleading marketing of fixed rate like Capital One be regulated and they be no longer allowed to do some of this stuff.

Sorry I know this is the FICO board but when one has worked so hard for so many years to maintain near perfect credit..the thought of losing a SINGLE POINT due to these idiots is frustrating to say the least.  It could have been worse..I could have actually been USING the card : )

Now I sure hope my 5.9% fixed rate for four years STAYS THAT WAY..if that bank also decides to pull this I REALLY will not be a happy camper.

Thanks for the input..I think as MidnightVoice said..all we have is a "guess" at a consensus as far as utilization goes on FICO scoring.    

[MidnightVoice]

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ficoscoregirl wrote:

 I do think the utilization STOPS when the card is closed and only the history (aging) remains.  I REALLY need to keep that one old card or my score will go WAY down (it is not THIS CO card thank goodness). 

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Utilization is only on open cards, yes that is true.

Age is an average of all your accounts apparently.  The experts here seem to say that a closed card ages the same way as an open card.  I do wish they would tell that to EX, who does not seem to believe them 

[Anonymous]

But only for ten years..then it disappears all together right? Including in the aging part of the score???