Expired card not renewed. Acct closed

[TeddyKG]

I owe five figures to my biggest and best creditor. My card was due to expire last month and I was just informed they are not reissuing card and account has been closed. The reasons, acct was delinquent and over the limit. All true I guess but I never paid past 30 days...the last two months I literally paid on day 29 past due. The account has been slightly over the limit for 2 months

My question is twofold...I just paid them a few thousand dollars, so acct is under limit currently but credit line is gone. 1) How will this be reported and how bad will it hurt my score? 2) Can anything be done to negotiate a lower interest rate while I pay off the balance?

Any advice would be greatly appreciated.

My TU fico score is currently 660 due to high utilization. Last year at this time I was 720

[pipeguy]

First welcome to the forums - as far as your question(s) the account will be reported as closed by granter which is not a big deal, but will also report as 100% utility until paid in full - depending on what you have available in other credit limits, that may hurt your scores. Note too that if you've been running this card "maxed out" it's been reported as high utility anyway, but the difference is that the credit line is no longer available as part of your overall credit limit/utility. 

The only way you remove the negative factor as far as this account's effects, is to pay the account in full and when it zero's out it'll no longer count as 100% utility. 

[Anonymous]

pipeguy answered in full.

The only other option you might have is if you can balance transfer 

to any other card(s) that might have either lower interest or 0% offers.

But I would take caution as other creditors may take action as a result.

If you have any/all funds to pay it off, now is the best and only time to do so.

[TeddyKG]

Thanks. I've actually been here since 2014. This place helped me tremendously and now I'm in a little jam so I will be around picking some of your brains. I just looked at account...it states my limit..and my balance which is now below my limit again but zero available credit.

Let me make sure I understand this correctly...my utilization will be 100% even if I pay another 5000 off cause the credit available is zero?

[TeddyKG]

Pipeguy...other creditors might take action even if I am in good standing with them

Fyi...I have only one past 30 days due mark on my entire credit report and that was over 18 months ago

[TeddyKG]

Also...last month a collection agent from this bank called me as they were "concerned" over limit and approching 30 days. I paid the past due immediately and told her to note account that the next month a substantial payment will be made. She made no mention account would be closed. 5 days later I received letter in mail stating card will not be renewed. I was upset cause I never ever was contacted by them about anything before and then they shut it down. I felt that was not right...she used the term delinquent but never 30 days past due with them

[Anonymous]

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@TeddyKG wrote:
Thanks. I've actually been here since 2014. This place helped me tremendously and now I'm in a little jam so I will be around picking some of your brains. I just looked at account...it states my limit..and my balance which is now below my limit again but zero available credit.

Let me make sure I understand this correctly...my utilization will be 100% even if I pay another 5000 off cause the credit available is zero?

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When a card is closed, FICO views that card as having a credit limit of $0, regardless of how the CL reads on the credit report.  Furthermore, when your balance is greater than your CL, FICO views that accounts as 100% maxxed out.

If you put both things together, your card will read as maaxed out as long as you owe even $1 on it -- because it is closed.

A maxxed out card hurts your score.

[iv]

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@TeddyKG wrote:
Also...last month a collection agent from this bank called me as they were "concerned" over limit and approching 30 days. I paid the past due immediately and told her to note account that the next month a substantial payment will be made. She made no mention account would be closed. 5 days later I received letter in mail stating card will not be renewed. I was upset cause I never ever was contacted by them about anything before and then they shut it down. I felt that was not right...she used the term delinquent but never 30 days past due with them

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Even one day past the due date is delinquent. 30 days may be the cutoff for being reportable to the CRAs, but a lender seeing multiple 29-day lates in a row isn't going to be OK with that. Not at all. (Also, most lenders consider any amount over the limit to be due on the following statement, in addition to the minimum payment...)

They could have cut you off earlier, they could have not made that call at all... but they did give you a last chance there. You paid the minimum needed to get out of delinquent status - not even enough to get back under the limit? Just that and a "note" that a "substantial" payment would be made "next month" isn't good enough. If you had made a substantial enough payment during that call (enough to not only catch up on late payments and get under the limit, but also enough to not be maxed out anymore), then you would likely have been allowed to keep the card open. (And they would likely have started balance-chasing you as you paid it down, yes.)

Based on the timeline you describe, that caller was giving you a last chance, and from your insufficient response likely generated the cancellation letter right after the call ended. That's more of a chance than would be offered in many cases...

[Pikaboo-icu]

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@TeddyKG wrote:
Pipeguy...other creditors might take action even if I am in good standing with them

Fyi...I have only one past 30 days due mark on my entire credit report and that was over 18 months ago

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Yes, they can and have, we've read posts about it from others.

You had one 30 day late but now you have a cc "closed by grantor" that's maxed out-

I would be very careful to not draw attention from your other creditors...

Pay that closed acct off ASAP as others have advised.

Good Luck!! 

[TeddyKG]

Ok thanks for all the info and advice. I can only pay half of what I owe so I guess I'm screwed for awhile...how many points lower do you think I'll sink?