Cancel credit card ?

[krw]

They'll find a *lot* of closed accounts. Don't think that's going to happen, not when they're making the vig on every transaction.

[mm]

It would still be a lot bewtter to know figures for years ago, when the credit card company rules referred to were made.

[George]

There is a nightly news? What time does it come on?

[JoeSpareBedroom]

It's easy to deal with the solicitations. Set up a custom ring tone known as "silent". That took care of the clowns from Citibank, who always call from the same phone number. They rarely leave messages, so all I see when I look at the phone is a missed call.

Discover did something interesting a few years ago. I paid off my balance and didn't use the card for a year. I got a note saying they were raising my rate from 14% to 19%. No problem. I wasn't using it anyway. Then, I got a call from some genius who wanted to know if there was anything they could do to entice me to do business. I asked the women if she could see my rate history on her screen. She said yes. I asked if she had any further questions. She didn't. I said goodbye.

Silly people.

[Higgs Boson]

Sheeeeet! They get me comin' & goin'!!! Damned if cancel, damned if I keep and don't use. I don't like the bank (B of A), which is one reason I got a new Visa from another bank. I hate to kiss B of A's royal *** every so often if only for a $10 purchase to keep THEM from dropping ME -- if I'm understanding how this works.

Are you SURE they "start dropping the credit limit on the card"? Why would they do that?? Anybody have real-world experience on this one?

TIA

HB

[Tony Miklos]

It's never happened to me, and I do play games with the CC companies to get the incentive then never use the card again. I let them go a year or two then when I look at my credit report, I decide to cancel two or three I didn't even remember having.

[krw]

You can probably find them on the web.

[Jim Elbrecht]

-snip-

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 unused.

Jim

[Shaun Eli]

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).

[JoeSpareBedroom]

I feel sorry for the phone service people who have to convey some of the scripted bullshit given to them by higher-ups. Chase raised my rate from

9.9% to 14.9% a year ago. I asked why. The answer was something foolish, like "Increased cost of doing business". Translation: We're bailing out the company's sorry ass after years of bad management.

[dgk]

quoted text -

I think that's wrong. The way it was once explained to me is that part of the score is based on how much you owe compared to your total credit lines. So, cancelling a card that gives you a $5k credit line will up your percentage owed compared to your total credit. That assumes, of course, that the OP owes any balance. Of course, you always owe a balance since you use the cards, even if you pay it all when due.

[Higgs Boson]

The various opinions and experiences on this thread are all very interesting, But I wonder if there has ever been an objective study done of exactly WHAT is the attitude of the banks toward cancelling cards and opening others. The assumption is that user is debt-free, pays on time, does not exceed limit, and does not have an inordinate number of cards. Surely SOMEONE or some entity has studied this?

HB

[bud--]

Certainly seems like an obvious and interesting question.

I would try asking a realestate agent. They deal with credit and credit scores to get a mortgage. They should be real aware of what influences the scores.

Wikipedia maybe?

[Shaun Eli]

Don't think anybody has the ability to conduct an objective study, other than the three credit bureaus that keep that data as proprietary.

The banks themselves don't do independent analyses of this, they take the credit score itself, plus your income, asset and debt levels, to decide on credit.

The credit bureaus say that they look at how much you owe vs. total credit available- in other words, are your credit cards maxed out, or do you use them only a little.

So it seems that if you have ten credit cards each with a $5000 limit and you owe $5000, cancelling one won't make that much (or maybe any) difference (owing 10% vs. 11%). But if you have only 3 of them and cancel one, then you've gone from 33% to 50% and that's a big change.

Note that usage includes what's outstanding when they measure it- so if you use your cards a lot but pay them off every month you will still show some 'debt.'

[krw]

Certainly they do. You said it yourself, they take your income and assets into account. They often have real people analyze the risk, too. FICO is just one input.

Yes, it's rather surprising that they don't show revolving debt, but they don't. One can infer it, with reasonable accuracy, fairly easily, though.

[Shaun Eli]

I had a boss who would say "Stop using pronouns" to avoid ambiguity.

I meant that banks take the FICO score as one input. They don't independently analyze what goes into THAT, the FICO score. They use the credit score and other data. But they don't dissect what goes into the credit score.

They may have real people look at an application for serious amounts of money (mortgage, etc.) but credit cards? I have applied on-line and gotten approval as fast as my screen refreshes. No people there, probably a formula using credit score and whatever I told them about income (they don't seem to ask about assets, only whether you have a bank account, and what type(s) plus what my rent/mortgage payment is).

[krw]

If they thought there was a need to reanalyze the FICO score why would they pay good money to FICO for the score?

That depends on the bank, and the customer.

Of course not. A bank may question and rethink a marginal score, particularly from a good customer, however.

The bottom line is that the FICO score is one of the tools available to banks. Nothing more.

[Kalmia]

I'd keep it, use it once in a while, and consider it a backup in case you lose the card you use on a regular basis. It's also good if you and the spouse go on separate trips. If one loses a card, the other guy is not left high and dry.

[Jim Elbrecht]

Or if your CC company sees some activity that it deems suspicious and suspends your account. Or there *is* fraud and you close the account. In the first case it is easier while standing in line to just whip out another card and deal with it later.

When your account has some fraud, you close that account and it might take 4-5 days to get the new cards.

CCs are like guns-- *they* don't cause problems, the people do. . . and the more you have, the merrier.

Jim

[Kurt Ullman]

And the computers seem to be getting a wider view of suspicious. We had been coming down to FL or Caribbean over Christmas for the latst 30 years, yet two winters ago, I tried to use the card for gas and it was refused. Called and asked why, they said the computer had flagged my use of the card in FL as suspicious. I mentioned the above time line, the guy said he was sorry and that he would reactivate the card. Anytime I leave town any more, I call and let them know.

The year after the above, I was back down in FL and had the card declined again. Got REALLY PO'ed and called the company ready to raise 6 shades of Hell because I HAD called this time. Turned out the computer flagged some charges in LA, nowhere near where I or the card was. I then became more tolerant of the computer (grin).