Citi closed credit card for inactivity- bad for credit report/score?

[wiivile]

Citi closed an American Airlines credit card that I opened a year and a half ago for inactivity... I haven't used it in a year. It's not one of my oldest credit cards, so I don't think it will affect average age of accounts much. And I have plenty of other credit lines (3% utilization) so I don't think it will affect my utilization much. But outside of average age of accounts and utilization, will the fact that the card was "closed by issuer" hurt my score or be bad for my credit report? I think it looks bad that a card would be closed by an issuer.

[Anonymous]

Who closed an account has no impact on score.    A slight possibility it could raise a question on manual review but this happens all the time.   The red flag is more when several cards are closed by different issuers in a short period, and anyway that would usually follow s ome event that would have caused a score change.

[celluloid17]

I'm kind of wondering this myself.  Just today, my Citi Double Cash card was closed for inactivity.  Granted, I haven't used the card in two years, but the account was opened in July 2010 (formerly Citi Diamond, but P.C.'d when DC was introduced in 2014).  I'm not heartbroken, but I'm hoping my scores don't take too big of a hit.  It was my third oldest open card, but I have extremely low utilization and other active TLs like the OP.  By the way, they don't give you much warning.  I received an email with the subject line, "Notice of Account Closure" and in the body of the email it asks you to log into your account for more information, but when you do, there is no further info.  I called in and learned that it would be closed as of midnight last night and that there was nothing that I could do to stop it (a quick purchase wouldn't change a thing).  They did say I could call to have it re-opened after it officially closes, but the lousy reps I spoke with wouldn't confirm that the orginal age of the account would be preserved. For me, I'm ok with it remaining closed, I'm just wondering the impact it will have on my credit reports.

[ChessChik47]

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@wiivile wrote:

Citi closed an American Airlines credit card that I opened a year and a half ago for inactivity... I haven't used it in a year. It's not one of my oldest credit cards, so I don't think it will affect average age of accounts much. And I have plenty of other credit lines (3% utilization) so I don't think it will affect my utilization much. But outside of average age of accounts and utilization, will the fact that the card was "closed by issuer" hurt my score or be bad for my credit report? I think it looks bad that a card would be closed by an issuer.

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As long as your utilization isn't impacted, you shouldn't see any score impact.  The trade line will continue to report (for up to 10 years) so it will not have any impact on your AAoA.  Whether closed by the issuer or the cardholder, it really doesn't matter because it was closed in good standing.  Don't sweat it.  Just make sure to use the cards you want to keep, even if it's just a small swipe every 6 months or so.  

[Adkins]

The only immediate impact the closed account might be from loss of utilization, if that's a issue. The long term impact is loosing a few FICO points in 7-10 years, when the account falls off your reports. How many points depends on the strength of your credit profile and ages of your other cards. 

[UpperNwGuy]

No card should sit around unused for months at a time.  If it’s too hard to use your cards, you have too many cards.

[Anonymous]

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@UpperNwGuy wrote:

No card should sit around unused for months at a time.  If it’s too hard to use your cards, you have too many cards.

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A little too sweeping IMO...    Some people may have a card that is of some value very occasionally.   So for me it's the eBates card, which I might use every 18 months or so.   Once I got about $200 more than I would with any other card I had, so that was worth it.

That said, I also have a lot of cards that are unused and will remain unused and probably should be closed, so I understand the sentiment. 

[Anonymous]

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@wiivile wrote:

Citi closed an American Airlines credit card that I opened a year and a half ago for inactivity... I haven't used it in a year.

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Would you mind looking back and finding out when you made your last transaction and also when the last payment was?

We collect case histories on cards closed to inactivity here on the forums.  It would be useful to know exactly low long the inactivity as for (aside from the rough guess of a year).

[Anonymous]

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@celluloid17 wrote:

I'm kind of wondering this myself.  Just today, my Citi Double Cash card was closed for inactivity.

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Interesting that Citi gave you two years of inactivity but only gave our OP one year, and that your two closures came within days of each other.  I wonder if Citi is conducting an internal housekeeping purge of cards that haven't been used for a while.

[Anonymous]

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The only immediate impact the closed account might be from loss of utilization, if that's a issue. The long term impact is loosing a few FICO points in 7-10 years, when the account falls off your reports. How many points depends on the strength of your credit profile and ages of your other cards. 

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Points aren't always lost when old accounts fall off.  If someone has an AAoA of 6 years today for example and one of thier accounts gets closed down (not their oldest account) perhaps 10 years from now when it falls off their AAoA is 11 years at the time.  That account falling off may drop them from 11 years AAoA to 8-10 years, but such a drop would cause absolutely no score ding.  This is just an example of course.