?? Creditcard company closed my old account

[dreamin_disney]

I got a letter today from citi that since I haven't used that card in years they closed my account. I called to ask if that would affect my credit/credit score. The woman couldn't tell me if it did and told me to call credit bureau.

I have very good credit and I don't want this to mess it up or lower my score. Anyone have this happen to them? The letter did say ..

We're sorry we weren't the right fit(in bold)
Because of the length of time your Citi diamond preferred MC account has been inactive, we've closed it. if you have any question or want to learn about other products etc

Will this affect me?

 

[Jen and Ashwin]

This could impact your credit score. Generally, your total amount of credit available will be reduced, which could skew your credit card utilization rate upwards and cause your credit score to fall. For example, if before the account closed you had $10,000 of overall credit with $1,500 in balances, then your utilization rate was 15%, which is considered positive towards your credit score. But if the account closure dropped your overall available credit to $5,000 and you still have $1,500 in balances, then your utilization rate is now 30% which is considered high and will have a negative impact on your credit score. You can fix this by either reducing your balances or opening a new line of credit to decrease your overall utilization.

Additionally, if you've had the card for a while, the closure could negatively impact the average age of your accounts which would have a negative impact on your credit score. Closed accounts should remain on your report for 10 years, but the overall age of your closed account will not change since it is now closed. When information is removed from your credit reports (after 10 years) it essentially disappears and cannot be used in any sort of credit scoring measurements. As such, old accounts that fall off of your credit reports can never help your average again and may decrease your score if it lowers your overall average.

I would make sure that none of your other accounts are closed. I always keep one small, recurring charge (netflix, hulu, etc.) on all of my credit card accounts to make sure they stay active.

 

[tvguy]

No offense, but if your credit score is low enough that closing an unused credit card card is going to have a tremendous negative impact on the score, I think there are other places you need to look in your financial live to get the score up. My 24 year old got a student credit card when she was 18, she has worked a grand total of 8 months in that time in minimum wage jobs and has been unemployed the past 7 months. She applied for a job where they did a credit check and remarked that they don't see many people of her age and work history with a 750 credit score. But she always finds a way to pay her bills.

 

[dreamin_disney]

TV GUY my credit it good it high number I think it was high 700's hubby says he thinks it was 800 mine was higher than his. I have other creditcards that's I've had for 10-15 years. I pay off balance every month

 

[RitaE]

If your score is in the high 700/800 range then I really wouldn't worry about it. Any score over 760 or so is going to get you top rates should you want a new loan. Mine dropped about 10points when I did something similar but it wasn't my oldest card. I don't think it really would have mattered that much because my utilization runs around 1% and my credit file is decades old.

If you are worried that much those sites like Credit Karma and Quizzle usually have a calculator that will estimate score changes if you input proposed actions like taking out a new loan or closing a card.

 

[supersnoop]

If it was your oldest card, then it might hurt. But if you have other credit cards about the same age, you should be fine.

 

[disneychrista]

Here's the thing about credit scores. Unless you plan to NEED credit (new car, mortgage) in the next 12 months don't worry about it.

 

[tvguy]

Here's the thing about credit scores. Unless you plan to NEED credit (new car, mortgage) in the next 12 months don't worry about it.

Yup. Although, like I posted earlier, if your score is so low that closing a credit card with zero balance is going to cause issues, you need to be looking elsewhere in your financial life for the problem.

 

[DebbieB]

I once had a Sears Master Card and I went to use it at Kmart and it came back declined. Turns out they closed it after a year of inactivity and never informed me. I didn't have enough cash but I did have another card that worked.

 

[tvguy]

I once had a Sears Master Card and I went to use it at Kmart and it came back declined. Turns out they closed it after a year of inactivity and never informed me. I didn't have enough cash but I did have another card that worked.

Only had my card declined once. At the service department of a new car dealer where I had just had over $1,000 in repairs done. They quietly showed me the "Declined" and offered me a private office to call my bank "to see if I could get it straightened out". I got the scoop from my bank and walked out just in time to see some horrified little old lady who had her Lincoln in for an oil change have her $19.95 charge declined. She blurted out "what do you mean my card has been declined?" To which I replied..."you weren't declined ma'am.....like me, the bank is declining the dealership's charge request because THEIR account has been suspended". She got her oil change for free, and I got 10% off my bill, as we waited about 20 minutes for the dealership to get everything straightened out with THEIR bank.

 

[DebbieB]

That reminds me of a time I went to Disney in the late 90's. I had a new credit card and was using it on the trip. I charged the balance of my Beach Club room charge. Then we went to Universal and I used it to purchase tickets, souvenirs, lunch at Hard Rock. Afterwards we went to the Belz Outlets. I used it at the Disney Outlet. It was declined. I was mortified, everyone was looking at me like I'm a criminal. The store told me to step out of line and I could use their phone (before the days of unlimited cell phones). Turns out it got flagged for fraud since I was using it out of state. They said they tried to call me at home. Well, obviously I wasn't there. After answering many questions to prove who I was, they turned it back on. Lesson learned - don't take a new card on vacation without informing them first.

 

[BigAlsGal]

If you're asking if you get somehow "bad marks" for having an account closed on you, I believe the answer is no. Just the act of the closure itself isn't bad. The only thing that will change is the amount of your available credit which may alter your score slightly.

 

[dreamin_disney]

ok well I better use my Disney visa and another slate card I have. I haven't used my Disney since 2013 and my slate since I cant even remember. Luckily the one they closed isn't the oldest card I have. I think my Disney is 14,000 limit so I don't want that one closed. thanks everyone

We do plan on buying another new car but not for another 1-1 1/2 years

 

[dreamin_disney]

Oh and on my Disney Visa...I had $27 in rewards dollars will expire soon so I cashed out. I think a day at Downtown Disney will perfect place to spend it. hubby likes the movies so maybe some snack for the movies