Sep
14
i read an article about credit cards @ aol.com and it seems that soon or after a certain amount of days of an idled/inactive credit card. the company will shut you down (close your account) and that close will hurt your credit score MORE than the consumer closing the account.
CURRENT SCORE = ===749===
amex cc - $0 balance / idled (used it for 3-4months max longtime ago)
macys store - $0 balance / idled
century21 mastercard - $800 balance / 1500 credit limit
chase visa - $500 balance / 1300 credit limit
bloomingdales store - $600 balance / 2000 credit limit
bloomingdales visa - $0 balance / NEVER used. but active i think
i’m scared that if you put you’re card on idle/inactive. that after a certain time they will close it for you and it will impact a lot worse on your credit report rather than the consumer closing it. Is there any suggestions? should i close any cards or let them close it? i’m not sure how long they let you have it inactive for. but from reading it will hurt more if they close it. damnit. i wish i just had 2 cards…..arg……what is highly recommended here….close the newer ones? how should i do it? i have a friend that closed 3 credit cards 10yrs ago and 10yrs later hes credit score went from 650 to 740. but i don’t wan’t that to happen to me. how many points will drop if i close an account ? i make $11 an hour & go to school.
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i’m thinking of transfering the $800 from century21 mastercard to the chase visa cause of lower interest rate. i hear that some companies can rise the interest rate cause of this? overall this detailed info, do you suggest it? if so replay separately concerning this transfering
JOEY
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2 Responses to “inactive/idled credit cards automatically closed by company?”
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CLARK
Here is the answer to your problem. KEEP ALL Cards and ONLY charge $5-10 on them a month and pay them off each month. This will keep them open and will look good for your credit. DONT CLOSE THEM. That will hurt your credit.
More info in The Ultimate Credit Repair Book
ANDREA
About a third of your credit score is based on the ratio of credit card debt to limit. Carrying balances of more than 30% hurts your score. If a credit card account is closed, your overall limit is lowered. This would increase your overall debt percentage and could negatively impact your score.
It makes no difference if you close the account or the credit card company closes the account — being closed by the credit card company is not a negative.
In the current economy, many credit card companies, especially major credit cards, are closing accounts after shorter periods of inactivity. If you want to keep accounts open, you should use them every 3 or 4 months for a small purchase and then pay them in full when the statement comes.
Before you start transferring, remember that there’s a fee (usually 3%). Is the interest rate low enough to still come out ahead when you add this fee? It’s also not a good idea to max out one card. It could trigger higher interest rates.
What’s the interest rate on that Bloomingdale store card? Usually store credit cards are in the 29% range? Is Chase account interest higher than that?
I suggest that you not transfer. Instead, make yourself a very strict budget. Take every penny you can squeeze out of that budget and throw it at the highest interest rate card, while making minimum payments on the rest. When the highest rate card is paid off, move to the next till they are all paid in full.
Once you get the cards all paid off, you might consider closing some of the accounts. I suggest you keep the two oldest major credit cards that do not charge annual fees. If you have another major card that has better interest/limit/rewards, keep that as well. Only keep store or gas credit cards if you have some special purpose and actually use them. Close accounts via letter and request written confirmation that the account is closed and 0 balance. Keep the letter and confirmation in your “forever” financial file.
Use your cards but only charge what you can afford to pay in full every month. That will build a good payment history, avoid interest, and keep you out of debt.