Years ago I've had them raise the limit on an unused card. A month
or so ago I had Chase close 2 $3000 cards, and send me a new $10000
card with a $100 reward if I used it. All in the same mail.
I think if a limit was lowered, it wasn't just because the card was
There was a time a couple of years ago when banks were trying to
reduce the amount of regulatory capital they had to hold so they were
cutting credit lines where they thought it wouldn't affect their
business much (or any).
Yes,it can lower your score. For example, if you have 3 cards with a
$10,000 limit on each, and a $10,000 credit card debt, you have used
up 33% of your available credit. If you now cancel one of the cards,
you have used up 50% of your available credit and this makes you more
of a risk, in the eyes of the credit folks, even though you haven't
increased your actual debt.
Do you ever watch Suze Ormon on Saturday nights, she is big on this
sort of stuff?
On 1/16/2011 11:42 PM, firstname.lastname@example.org wrote:
But your statistical sample period is way to small to catch the period
not too long ago when it was a good thing to not even have a budget.
Just simply buy what you wanted because somehow it would work out.
You listen to the Nightly News too much. The situation has bettered somewhat,
but it wasn't just all of a sudden that almost half of the people paid off
their CCs. Not everyone maxed out on their home equity, either.
Well explained. I have a 8-10 Chase cards. If they want to
pay me to open a card-- I open it. I use it once- pay it off, get
my bonus, and throw it in the safe.
A couple weeks ago I got 3 letters from Chase in the same mail.
1. You don't use this card- so we're closing it. [a $3000 limit]
2. You don't use this card, so we're closing it. [another $3000 card]
Now I'm getting concerned that they have decided to lower my available
credit by $9000. [not because I would use the cards- but because of
the credit score] I was sure the 3d was the same thing as I have
several other cards I don't use.
Nope-- The 3d letter-- A review of your credit history tells us this
card will be the best fit for you. If you choose to use it we will
credit your account $100 30 days after its first use. Credit limit
On Sun, 16 Jan 2011 18:56:06 -0800 (PST), Higgs Boson
That link says you lose the history of good credit on that card.
If you're never use it it's worthless for credit history.
But it does add onto your "available" credit, and that's not good.
When I got the mortgage on this house I canceled unused credit cards
first, and I always cancel cards I don't use.
Available credit in your hand is potential debt to lenders.
I say dump it.
Lots of apples and oranges.
My reading of the debt/credit ratio component of FICO scoring is the
debt part is based on revolving credit balance.
So if you don't carry a balance the ratio is always sterling.
And even if you occasionally carry a balance, since FICO is
periodically recalculated, having useless credit cards around is
senseless, especially if they are sending you zero balance bills and
adding to the junk mail.
Much of this FICO stuff is lender and CC scamming.
They want you to keep the card so they get transaction fees.
FICO is a decent tool for creditors, but way too much of it made for
those who pay their bills on time and use their CC's as a convenience,
and not as a loan machine
Of course the FICO algorithms are "trade secrets."
You're right about the debt/credit ratio having a FICO score effect
for those with revolving credit balances.
But you can't say how much. That factoring is a "secret."
Good way to scare those folks to get more credit cards, get into more
debt, and ultimately increase the already usurious interest rates on
When I got my mortgage in 1997 my mortgage broker told me to cancel
unused cards. I had a hefty balance on one card.
And a couple other unused cards with high limits.
According to him the lenders didn't like all the "available credit."
So FICO was only one criteria they used.
Of course lenders had a sense of fiduciary responsibility then.
Similarly, insurance companies use a modified "insurance FICO" to
assign risk and determine premiums - some of them don't use FICO at
all. It's all "trade secrets" of course.
No question that you don't want a poor FICO score.
And you want to avoid felony convictions too.
But for the average Joe who pays his bills on time and doesn't carry a
CC balance, you don't have to worry about it.
Certainly not enough to listen to bankers threatening your FICO score
if you don't keep their credit card.
I get a real kick out of the commercials for the credit score
"monitoring" people. They keep an eye "on all three of your credit
scores", while the one used most often and probably the most important
(the FICO) isn't included. Is to guffaw.
"Even I realized that money was to politicians what the ecalyptus tree is to
koala bears: food, water, shelter and something to crap on."
On Sun, 16 Jan 2011 18:56:06 -0800 (PST), Higgs Boson
I believe so, yes. Those who talk aobut credit on the radio, who work
for no credit company, have said so.
Even if you still have other credit cards and use them, it's bad to
cancel a credit card.
And my friend who follows what theyse people say, says that's what
I forget the details of this including when it's okay to cancel one.
For details, this might be a topic better read about on the web than
Why not just let it sit there? Maybe when the banks you're dealing
with now go belly up some day, you'll need it.
Is it a card you've had for a long time? Longer than your other
cards? Aside from what cancelling it might do to your credit
ratio, your length of credit history accounts for a percentage of
your score, too. Why not just use it once in a while and pay it
off when the bill comes in?
I once carried a large introducory interest rate balance on a card.
(about 1.9%, much lower % than the car I bought with the money) My
balance was about $4500 and my credit limit was $10,000. I asked them
to lower my limit to $5000. Big mistake. Now the credit companies
looked at it as if I had the card almost maxed out! That's a bad thing.
I read ahead and saw you don't carry a balance, so you will be OK
canceling it. But if you carry a balance on one card, it is good to
have more credit available on that and/or other cards. They do like to
see a lot of available credit that you aren't using, but if you have
three cards paid in full each month, you are looking good to them.
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