HSBC Closed My Credit Card Account --guess why

[WhyIsTheRUMGone?]

Chase has closed three of my CC for non activity in the past year. I didn't use United, amazon or ebay.

However, they did not move my credit lines over to open cards so my debt ratio is higher.

I did go shopping and opened two new cc with 6.99 interest forever. I refuse to pay more than that. I do use my Chase Disney card when charging at Disney and then pay it off in the 0% 6 months.

It is a shame what CC companies are getting away with now days!

 

[PartyOf5]

A lady called in to Suze Orman last night and this happened to her too. Apparently it's something new the credit companies are doing as "incentive" to use your cards more often.

I saw this as well. Suze recommended using your "inactive" cards once in awhile (as long as you can pay the balance off at the end of the month).

Speaking of Suze, she was a speaker at my work place last week. She was AWESOME. I was in the 3rd row and afterwards was able to get a book signed and a pic w/her. She was so down to earth....extremely nice person.

 

[Belle2667]

I saw this as well. Suze recommended using your "inactive" cards once in awhile (as long as you can pay the balance off at the end of the month).

Speaking of Suze, she was a speaker at my work place last week. She was AWESOME. I was in the 3rd row and afterwards was able to get a book signed and a pic w/her. She was so down to earth....extremely nice person.

Hi -

While I may agree that using it once in a while may keep it from being "inactive", I also remember not too far back that people were reporting that when they used a card that they didn't normally use, purchases were being denied because it hit the "fraud alert" criteria.

Which is worse on the credit rating? Closed accounts, especially if it's closed by the company, or fraud alerts?

 

[momtomari]

i haven't had this happen to me yet from HSBC but i do ocassionally use the card and pay off the balance within the grace period to make it look like i am using my credit

amanda

 

[LoveBWVVBR]

My friend uses her AMEX like a debit card. She charges everything to it to get the cash back award and then pays it off each month. She recently received a nasty letter informing her that she is NOT allowed to do that and if it continues they will cancel her account. AMEX states she is breaking the credit card contract by using it like a debit card. Good grief.

WHAT?! I do this every month with both my Amex and my Mastercard, and I don't see how it's "breaking the contract" or "using it like a debit card". I've never, ever carried a balance on either credit card, so it's not exactly a newsflash to them that I have no intention of ever doing so. I cannot believe how low the credit card companies are stooping. If this happens to us, you can bet your bottom dollar that they'll lose us as customers for life.

 

[MissMichelle]

I have HSBC with a 9.9% rate...I don't *think* they'll close me due to inactivity since it has a yearly $59 fee (I had horrid credit and wanted to re-establish credit) so I will pay that yearly but refuse to use it.

Ridiculous to think these CC companies are closing accounts do to being paid in full. Just another reason to keep as few cards as possible.

We have 2 Capital Ones we don't EVER use..they hold our highest rates--we use our Wamu card for everything since this year we have a 0% rate till 1/2008 then it locks at 9.9%. PIF every month. We'll stop using at that point.

 

[whjoyjr]

Which is worse on the credit rating? Closed accounts, especially if it's closed by the company, or fraud alerts?

I do not believe that a denied transaction due to an internal fraud alert is reported on your credit reports.

 

[whjoyjr]

WHAT?! I do this every month with both my Amex and my Mastercard, and I don't see how it's "breaking the contract" or "using it like a debit card". I've never, ever carried a balance on either credit card, so it's not exactly a newsflash to them that I have no intention of ever doing so. I cannot believe how low the credit card companies are stooping. If this happens to us, you can bet your bottom dollar that they'll lose us as customers for life.

In the case of the friend of the OP, my bet was that the card holder was making multiple payments per month. Since there is a transaction fee to pay your bill online (AMEX would pay a fee to your bank for the electronic payment), I can see this happening. IIRC, the AMEX website was updated a year or 2 ago (botched update) to prevent more than 1 payment per month per account...

 

[LoveBWVVBR]

In the case of the friend of the OP, my bet was that the card holder was making multiple payments per month. Since there is a transaction fee to pay your bill online (AMEX would pay a fee to your bank for the electronic payment), I can see this happening. IIRC, the AMEX website was updated a year or 2 ago (botched update) to prevent more than 1 payment per month per account...

I do that sometimes! I didn't know that the cc company had to pay extra to my bank when I did this. I'll stop doing it with the Amex and the Mastercard and only pay them once a month after they're due. We use the rewards points from both of these cards, and I'd really hate to have the cards cancelled!

 

[jen-n-greg]

I could see if I hadn't used my card in a year or more, but 5 months Oh well, I have better cards that I get rewards from anyway, so good riddance But does this affect my credit rating?

 

[tlbwriter]

Hi -

While I may agree that using it once in a while may keep it from being "inactive", I also remember not too far back that people were reporting that when they used a card that they didn't normally use, purchases were being denied because it hit the "fraud alert" criteria.

Which is worse on the credit rating? Closed accounts, especially if it's closed by the company, or fraud alerts?

Fraud alerts don't show up on your credit report and don't affect your credit rating. Closed accounts do, especially if they're not closed by the customer. If I had a card I wasn't using, and was considering borrowing money in the future (car, mortgage, whatever) I'd get it out and use it once a month just to keep it active. Especially if it's one you've had a long time - having a card for a long time and using it regularly improves your credit score.

 

[pixiewings71]

I can't stand HSBC. My DBF and I had a major house fire, we had to replace almost everything. Went to our local Best Buy and found a really nice TV and opened Best Buy accounts. A few days later we get our BB cards AND 2 Mastercards from HSBC. Turns out when you get the BB card you "automatically" get the MC as well. Well, his was a high limit, great interest rate, no yearly fee. Mine was a low limit, higher interest rate WITH an annual fee!!!!!! My credit was NOT bad, in fact it was really good but they hit me with a $59 fee. I didn't realize that until I had used the card once.....needless to say I paid it off and haven't used it since. I got a statement saying I owed the yearly fee, called them and asked to have it removed, they refused and I told them I would close the account. I asked the guy "why would I keep an account open and pay a yearly fee on it when I don't use it?" He kept telling me he would give me a better interest rate, rewards points but he couldn't reverse the fee because "you agreed to the fee when you signed up for our card". So, I told him I hadn't signed up for it, it was sent with my BB card and I didn't realize you couldn't get the BB card without getting the MC or I would not have applied......finally he got his supervisor on the phone, I explained that they could remove the fee or close my account and they waived the fee. I fully expect them to remove the fee every year or I will close the account because I really was blindsided by getting the card to begin with. And when I went back and reread the BB card info it did say that they would send a MC as well BUT they never said anything about an annual fee.

Oh and about 2 months after we got the cards, they sent my DBF a letter saying his account was closed due to "inactivity" as well. He had used the card for gas once or twice and paid it off right after but he had used it. He called them about it and they couldn't help him......said they had no idea why it was closed.... LOL

 

[disneychrista]

Our Chase Disney get the ax after we close on our new home and I get my rewards transferred to my rewards card for our December WDW trip...

Don't AX it before you use the rewards card. The rewards are only good, even if on a rewards card, if the account is in good standing. Closed accounts aren't "good standing"

 

[wshupnastar]

I have heard of card companies that cancel cards due to inactivity more and more lately. And don't buy the "it's for your own protection, due to fraud alert" spiel they give. I mean, it could be for that a little, but, basically, it's because they aren't making interest on your purchases! Obviously, if there is no activity..no interest. And, if you pay off your bill every month...you are a credit card company liability! They don't want you to use their money for free!

It's rough for people who are wanting to raise their credit scores (like me) because you have to leave a bit of a balance on your card every month. It's driving my husband CRAZY that we owe money on our ONE credit card, but we do pay well more than the minimum every month, and we try to use the card at least once a month.

 

[whjoyjr]

Don't AX it before you use the rewards card. The rewards are only good, even if on a rewards card, if the account is in good standing. Closed accounts aren't "good standing"

I did not know that. Not too happy with that policy, but all it does is give the card a few more months of life...

 

[drag n' fly]

About 20 years ago I had a CC that paid 2% back on all purchases. I used it for everything.
I always paid it in full, never carried a balance.

We got canceled due to paying off balance every month. Oy

I was told by our bank manager that anyone who pays their bill every month is considered a deadbeat in the credit card world because they cannot make any money off of you because you are a responsible credit user. They dont like responsible credit users

 

[neatokimmo]

I totally disagree with this, I have been paying off my card in full every month for about 3 years and my FICO has gone up 150 points.

The CC companies only report your balance once a month. So depending on when your payment goes in and when they report it, you could report a balance even without having a balance and paying that interest.

If you want to monitor your FICO for free, get a Providian card. It is a free service and they update it once a month.

It's rough for people who are wanting to raise their credit scores (like me) because you have to leave a bit of a balance on your card every month. It's driving my husband CRAZY that we owe money on our ONE credit card, but we do pay well more than the minimum every month, and we try to use the card at least once a month.

 

[tlbwriter]

I was told by our bank manager that anyone who pays their bill every month is considered a deadbeat in the credit card world because they cannot make any money off of you because you are a responsible credit user.

That's silly. They still make money from the merchants.

 

[seashoreCM]

I... and opened Best Buy accounts. A few days later we get our BB cards AND 2 Mastercards from HSBC.

Last year I applied for a Master Card from Circuit City ("CC", as opposed to "BB"; there is also a similar store chain called "Good Guys" or "GG") They were offering a rebate on that day's purchases if you applied for the card. They declined my application but instead issued a CC credit card (i.e. good in their stores only) which fortunately also had the rebate feature.

Oh and about 2 months after we got the cards, they sent my DBF a letter saying his account was closed due to "inactivity" as well. He had used the card for gas once or twice and paid it off right after but he had used it. He called them about it and they couldn't help him......said they had no idea why it was closed.... LOL

Maybe because they didn't want to have to keep waiving the annual fee.

I got a letter in the mail today-- Household Bank closed my account--due to inactivity!--and it also said this will affect getting credit with them in the future ?

It won't affect your overall credit any more than any other bank's cancelling your credit card for no reason. As far as getting credit with them in the future, they have every right to not let you collect a second helping of 15,000 airline miles or a second Macy's gift card and by not sending you junk mail that invites you to sign up for a new card, they accomplish their goal.

Disney hints: http://members.aol.com/ajaynejr/disney.htm

In the past few years I got 15,000 Delta miles for one credit card and 15,000 United miles for another credit card, both of which cards have since sat in my dresser drawer after one or two real usages each. Yes, unused but open accounts are vulnerable to identity theft because you might not know if some miscreant modified the billing address.

 

[momrek06]

I was told by our bank manager that anyone who pays their bill every month is considered a deadbeat in the credit card world because they cannot make any money off of you because you are a responsible credit user. They dont like responsible credit users

I TOTALLY BELIEVE THIS!!!!!!!! Read any book written by DAVID BACH and you will completely understand why this is just so true!!!

That's silly. They still make money from the merchants.

I believe drag n'fly is referring to consumers (like you and me) not merchants!!!