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Old 01-05-2009, 06:58 PM   #1
Aggro_Al
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Default Credit Card Company Closed Account Without Notice



I just found out over the weekend when I was shopping for a new car that one credit card company closed one of my credit cards without any notice for inactivity ($8k credit limit) and another one lowered my credit limit from $16k to $4k because I haven't accessed in a while. One was done a month ago and the other was done back in November. I was never informed by either company that they were going to close or lower my accounts due to inactivity and it affected my FICO score. Apparently, a $20k decrease in available credit was enough to knock me out of the lowest interest rate even though one had a zero balance and the other only had $1k on it.

I called them on it and they said that they didn't have to give me any notice and that they can unilaterally do this without informing me. I realize it's their money and they can do whatever they want with it but, can they do it without notice. I checked on my card agreement and there is no specification that states what would be considered inactive nor did I receive any notices saying that my account was going to become inactive, so how was I supposed to know? I used the larger card 6 months prior to the limit being decreased and have made payments to it monthly and transacted on the other card 9 months ago. I found out that the Fair Credit Reporting Act requires them to notify the consumer that the credit report will be negatively or adversely affected by their information or action. When I asked them about this, they said that the FCRA doesn't apply to them. Inactivity would have been easy to correct if I had prior notice. Now it has affected my FICO score.

I've put off getting another car until I get this resolved. Even though the interest rate increase was minor, it's still an increase. Any ideas on what to do?
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Old 01-05-2009, 07:11 PM   #2
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If you feel you've been damaged as a result of this, consult an appropriate attorney. The odds are against you though in winning any type of financial resolution. Banks can (and have been doing so in large numbers recently) close inactive accounts.

In the future, I would recommend limiting the amount of active CC's to those you actually use in order to prevent this.
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Old 01-05-2009, 07:13 PM   #3
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Wow, that sucks! Unfortunately I don't think you can do anything. I'm in the process of paying down my CC's (luckily I only have about $2000.00 left to go) At least they didn't lower your credit line so that you're over your limit. I had a $900.00 line and had about $780.00 on it and they lowered it to $700.00 and charged me OL fee's. I thought I was going crazy and did some research and it turns out a lot of CC companies are going to do that within the next year.
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Old 01-05-2009, 07:15 PM   #4
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you need to carry some revolving balance, which in turn will keep this from happening and keep the FICO up.
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Old 01-05-2009, 07:25 PM   #5
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Yeah, I had a 3k card closed due to no activity in a 10 month period. I then looked at my other cars and charged something on them to keep them active. I now devote one to gas and another to food and then pay them off every month just so they don't drop them. Credit is to hard to get these days!
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Old 01-05-2009, 07:57 PM   #6
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Quote:
Originally Posted by HDPDZO6 View Post
If you feel you've been damaged as a result of this, consult an appropriate attorney. The odds are against you though in winning any type of financial resolution. Banks can (and have been doing so in large numbers recently) close inactive accounts.

In the future, I would recommend limiting the amount of active CC's to those you actually use in order to prevent this.
I did some transaction on one card back in March then paid off the balance and made some transactions on the other card 6 months ago and still have a balance on it. They were both used within the last 12 months. Nowhere on the card agreement does it say that a card is inactive after "x" months nor did I receive a notice saying that I was going to be or had been inactive. When I brought this to their attention, their response was that they make their judgements based on periodic reviews. How am I supposed to know what is or isn't inactive?
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Old 01-05-2009, 08:43 PM   #7
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They are ****ers who can pretty much do what they want these days.

If times are good, they screw you. If times are bad, they still screw you.

It's a universal principle with banks, best thing to do is keep that revolving credit as USN said.

I still can't believe how much your credit affects things here, from car insurance to purchases - and yet - they can recind it at will and it has no bearing on anything apart from financial security. It's frankly criminal.
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Old 01-05-2009, 08:55 PM   #8
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The same thing just happened to me a few months ago. I emailed the company on why there wasn't a notice, and they said from time to time, credit card portfolios are discontinued. They just increased the limit a few months before that too. There goes the rims I was gonna buy, and now I can't get those, and I'm stuck with a balance for a card that I can't even use anymore.
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Old 01-05-2009, 09:19 PM   #9
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That's happened to me, too.

While it sucks, fortunately it was because I just don't use the card. I tend not to buy things that I don't have the money for.
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Old 01-05-2009, 10:13 PM   #10
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Unfortunately, closing any credit card is bad for your FICO score. FICO doesn't care if the card was in good standing or was derogatory. A closed card is a closed card as far as FICO is concerned. The closed card report can stay on your credit record for up to 10 years. If you've have the card for a while and it is in good standing you will lose the positive credit history and it will affect the age of your credit by shortening it. Having good credit history and an aged account improves your FICO. Closing or lowering any credit will immediately raise your utilization if you carry any type of balance.

For example

Card 1 $25k limit $0 balance 10 year old card
Card 2 $25k limit $0 balance 8 year old card
Card 3 $25k limit $8k balance 2 year old card
Card 4 $25k limit $2k balance 5 year old card

Utilization is 10% which is very good
Account history has aged well and no derogatory
This would be a very high FICO score

Card 1 is closed for inactivity
Card 2 is closed voluntarily

Utilization is now 20% not too bad but not as good as 10%
Account history and age has significantly decreased.
This probably would still have a slightly above average FICO score.

Card 3 is worried about Card 1 and Card 2 closing your accounts and lowers your credit limit to $10k due to Card 1 & Card 2 closing, shortened age and shortened history.

Utilization is now 46% which is not good.
Credit history now shows two closed accounts, one lowered credit limit. Not a very good impression to creditors especially when you lost the good credit history of the closed accounts and the remaining accounts have shortened age.
FICO is now not so great and you haven't increased your balances and have not had any derogatory reports.
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Old 01-05-2009, 10:25 PM   #11
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Old 01-06-2009, 01:06 AM   #12
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This is the thing which i hate from my cc
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Old 01-06-2009, 04:46 AM   #13
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Quote:
Originally Posted by ni$mo350 View Post
Wow, that sucks! Unfortunately I don't think you can do anything. I'm in the process of paying down my CC's (luckily I only have about $2000.00 left to go) At least they didn't lower your credit line so that you're over your limit. I had a $900.00 line and had about $780.00 on it and they lowered it to $700.00 and charged me OL fee's. I thought I was going crazy and did some research and it turns out a lot of CC companies are going to do that within the next year.
Same crap happened to me recently. And I am closing that account after it's paid off next month. They lowered me down to lower than what I owed them and sent me a bill that was over $100 more than what the min was. They said because of too many credit inquires when I haven't done one and I reviewed my credit and they were the ones hitting it with my other credit card companys. So I am like wtf!
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Old 01-06-2009, 05:25 AM   #14
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My son's interest on his card was raised from 7.9% to 17% overnight, because of "Insufficient Account Movement" (i.e. he didn't use it enough for THEIR standards!!!) Needless to say, he paid it off & got himself a new one. Commercial gluttony!
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Old 01-06-2009, 05:28 AM   #15
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Solo,

I'm finding out a lot of things as this progresses. You might want to check that out because a credit card company doing multiple inquiries for the sake of lowering your credit would probably fall under the Fair Credit Reporting Act or the Equal Credit Opportunity Act.
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Old 01-06-2009, 05:44 AM   #16
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It's gotten pretty shady. Oddly enough though I have a BofA account that I closed myself back in '03 because the account had been tampered with and all of a sudden 5 years later credit line access checks showed up at my parents house this week. Needless to say this led to a phone call (and 30 minutes of hold time) with BofA.


Oddly enough, the 3 or 4 cards that use on a regular basis (1 for gas/food, 1 for airlines, 1 for large purchases that I carry a balance on, and 1 for online purchases / bill pay) have all increased my lines in the past few months.
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Old 01-06-2009, 05:50 AM   #17
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Its an example of poor customer relations, but there is little you can do. Its their money.
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Old 01-06-2009, 05:55 AM   #18
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Quote:
Originally Posted by Aggro_Al View Post
Solo,

I'm finding out a lot of things as this progresses. You might want to check that out because a credit card company doing multiple inquiries for the sake of lowering your credit would probably fall under the Fair Credit Reporting Act or the Equal Credit Opportunity Act.
Yea, WAMU is really bad about this. I am so tired of CC's. Going to ditch this one and keep my other one as my only one. Don't need them.
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Old 01-06-2009, 05:56 AM   #19
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Quote:
Originally Posted by bryan@Z1 View Post
It's gotten pretty shady. Oddly enough though I have a BofA account that I closed myself back in '03 because the account had been tampered with and all of a sudden 5 years later credit line access checks showed up at my parents house this week. Needless to say this led to a phone call (and 30 minutes of hold time) with BofA.


Oddly enough, the 3 or 4 cards that use on a regular basis (1 for gas/food, 1 for airlines, 1 for large purchases that I carry a balance on, and 1 for online purchases / bill pay) have all increased my lines in the past few months.
That's interesting Bryan. I also had a BOFA on my account as well as credit checks and I don't have a card wth them at all. But I am thinking it might have been done when I got my Z a while back, because it was around that time so the dealer might have tried to get a loan through them.

My credit line on the card that just decreased was just increased before that over 1300. Then suddenly they dropped it back down even lower.
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Old 01-06-2009, 07:08 AM   #20
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Check with your car insurance company. A few years ago I got a notice from the insurance company that while I was receiving discounts due to an accident free driving record, I was not receiving maximum discounts based on my credit score. I seldom use a credit card and when I do I pay the balance every month. I paid cash for my car, motorcycle and everything else I own so I don't have a lot of credit activity. I confronted the agent because I was pi$$ed and he told me that it's common practice for insurance companies to base rates on credit scores. Apparently 50+ years of accident free driving isn't enough.
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Old 01-06-2009, 07:08 AM
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