I learned a lesson this week. I hate learning by experience.
I got a letter in the mail that a credit card I’ve had open for five years, with a substantial limit on it, got closed for inactivity. Now, I know that I should use my cards at least once a year, but this one totally slipped my mind.
I’m not looking forward to seeing what this does to my credit score. I don’t carry a balance on any of my cards, so my debt at any reported time is low, but my credit limit on all my cards was high. This cancellation has very much decreased my debt to credit ratio.
I’ve been considering opening a new card, finding one with some great benefits I would like to use. I guess now is the time to start my research.
I will probably also call Discover and see if they will increase my credit limit. Not that I will ever spend near it, but it would be good to have an increased amount of credit.
So everyone, if you have cards you don’t use and don’t want to see them closed, go buy some gum with them!
The same thing happened to me recently!! I was so mad!
As far as the debt ratio, this shouldn’t really affect it. At my bank, we go by how much credit you have in use versus your income. If anything this would help because you don’t have it available to spend. I think the biggest thing that will affect your credit score is that you now have closed a line of credit that you’ve possibly had open for years. I think it’s crappy about credit card companies, but what can you do? They should at least ask first, I think!
I think it dings your credit score a little bit and of course affects your credit to debt ratio, but your score will pick up again in a couple of months.
No need to worry. It’s a good ding
It doesn’t make sense to me why your credit would be affected in that way. It’s stupid. Why do they do that?
I wouldn’t worry too much about it, though. I’m sure your credit will bounce back in no time.
yep, happened to me, too. The worst of it is that this is the card that I’ve had the longest. So it didn’t only ding the ratios, but the length of history, too.
I HATE the whole FICO thing. My son pays higher car insurance rates because he hasn’t ever had a credit card. And he doesn’t want one, but may be forced into this game just because it’s the only one in town.
I always have to remind myself to use my oldest credit card.
I recently opened a Chase Freedom card and I love it. I’ve already gotten $50 in cash back, plus if I really want to I can use my points for something else.
Ouch, yeah, your credit might be dinged for a while. That sucks!
Funny you should post this today – just this afternoon I got out my emergency credit card and used it to buy a couple of pairs of gloves (that I needed anyway), just to keep it active. I haven’t used it for anything since January 08, I think, so it was time.
couldn’t agree more! use them credit cards every now and then. i just got a notice that our APR went up because there’s now a minimum of 6% being applied as the lowest you can pay….kinda sucks, but just gotta keep making sure no balances stay on there