Credit card forced me to close it

iVillage Member
Registered: 01-25-2006
Credit card forced me to close it
9
Thu, 11-06-2008 - 3:30pm

Wow, this is interesting.

I have had a visa card through my credit union for probably 15 years or more. I hadn't used it in a couple of years and the card had expired early this year without my realizing it. When I decided I should probably use a couple of other my cards just to keep the accounts active, I decided this should probably be one of them. It had historically had a pretty good rate and it is with my CU although now I realize, it isn't really. I started to use it a couple of weeks ago and realized it was expired and I had no idea where the replacement was so I called to report it lost and get another. The rep advised me that they had not sent a new card because it had been inactive. I didn't think much of it and asked that they send me the card now. She said there'd be a 'review' but that it would probably be sent. Today I received a letter that they would not send me a new card and that I should call. The representative informed me they were not issuing any cards to clients with an expired card and a zero balance but that I would be welcome to reapply!!!! I laughed and said "guess they don't want my business too much huh?" and he said he was sorry but that's what their policy was. I asked if my credit union had any say and he said 'no'. I asked what they would report to the credit bureau and he said it would show closed by my request.

I have pristine credit, I'm carrying virtually no cc debt (a few hundred dollars on a card I pay off monthly) and apparently I'm too much of a risk for this bank. Hilarious...I find it particularly interesting that if I had a balance they'd be glad to send me a card. I don't really care. I have lots of other credit and I don't really want to run up credit card debt anyway. Plus the rate wasn't all that great when I looked at my account today. Just makes me laugh at how stupid businesses can be. I will be informing my credit union that the bank they are using with their branding is treating their best customers this way though.

Peg

iVillage Member
Registered: 06-18-2004
Thu, 11-06-2008 - 4:09pm

Wow! I guess they'd rather take a chance

Community Leader
Registered: 01-03-2004
Thu, 11-06-2008 - 5:39pm

Peggy,


Hi. I work as a banker so I think I can shed some light on why your CC company would not issue you a new card without a new application.


Most financial institutions and credit card companies have "sunset" provisions on their cards. In other words, if you never use a card and it expires they will close an account. This is done for two reasons: 1)You may have relocated or even died since you received the card. CC companies won't know this information unless they are notified by you or next of kin. 2)It protects both the CC issuer and the CC card holder from potential fraud if say an unactivated card is suddenly in use.


Also, most credit card companies will require you to reapply for a credit card after two or more years for the simple reason your credit rating, income and other

iVillage Member
Registered: 07-10-2003
Thu, 11-06-2008 - 7:35pm

Well I have had 3-4 credit cards do that to me over the years.

iVillage Member
Registered: 01-25-2006
Thu, 11-06-2008 - 7:35pm

I actually perceive this a bit differently from the customer's perspective:

I have used the card, actually it was my primary card for a number of years. I agree that there was some logic in not sending out a new card when the other expired for lack of use although they had billed me less than a year prior (it was a 0 balance bill so I didn't really understand what had kicked a bill out) so they were up to date on address. I understand not sending it at the time, I don't understand forcing me to reapply. They have the ability to pull a credit rating at any time, notably one that would not be charged as an 'inquiry' for me where I assume reapplication would, so I don't really get why they wouldn't just check my credit as usual and reissue the card. They did all the usual identity verification and I would've obliged them whatever they needed in that arena but forcing a reapplication seems to signal to me that they do not want my business.

I also have a standing, active relationship with the credit union so even if I hadn't used their Visa card, I certainly have used my debit and checking and savings accounts with them. I see now that they are simply 'selling' their credit card business to this bank and that is their mistake since their name is on the card but they don't control how they do business and handle my account as their good customer/member.

It has not been my experience of any sort of sunset rule on my credit cards in the past. I'd be interested to hear if others with clean credit have had similar experiences because that would be a new one on me. I pull my credit report every 4 months from one of the agencies and they all show open and I have always gotten cards from other credit card companies on my expiration date regardless of use. I found it interesting also that had I not called, they weren't going to close my account. They just weren't going to give me the mechanism to use the line of credit. Seems fishy to me.

I hold that there is no reason to force me to close my account or reapply. I have given them no reason to assume I am a credit risk. It creates bad will and sends me to their competitors which most will be glad to have me.

Peg

iVillage Member
Registered: 01-25-2006
Thu, 11-06-2008 - 9:18pm

Ok, guess I'll eat some of my words. Decided in light of that revelation maybe I'd check into some of my other accounts. Looks like a couple have done things due to inactivity:

1. JCPenney did what makes sense to me. They dropped my credit limit way down to $500 and didn't send a card when the old one expired. She was immediately able to order me a new card and told me to call when I'd received it and they would evaluate the account to determine if they could raise the limit. Totally reasonable response to me.

2. Target Visa's automated system told me the account was closed. I did not see that on my last credit bureau report but I do have to admit I glanced through it to assure there were no negatives this time and didn't get down into it to see that something had been canceled. I suspect it is still reporting as open so I'll have to close it next time I check my report but now I'm curious to see how it reports. I didn't bother talking to a rep because I think I'll just close this one regardless. Again, I think this is overkill but I'm not going to argue with them.

I have two other cards with large credit limits through BOA that I haven't had activity on for just over a year on one and just less than a year on the other. Both appear to be in good standing. I will use both sometime this month just to show activity on them. I need to decide if I'm going to do the same on the remaining couple I have that haven't been used for a long time but appear active on the websites.

I am a little surprised by all this needless to say. I guess I'd always carried balances on a variety of accounts so that it wound up getting used. In 2006, I had consolidated all the cc debt onto a couple cards and haven't used the cards like I used to. I want to have available credit from a few different banks so now I've identified the 4 cards I want to be very sure to use once a year. It's still too much available credit line but I can't seem to bring myself to shut it down any further. After watching my friend front $15k in tornado expenses before the insurance paid a dime, I'm hesitant to give up my credit cards.

Peg

iVillage Member
Registered: 11-17-2007
Thu, 11-06-2008 - 10:14pm

I have this bank acount because that is where my mortgage is and they gave

iVillage Member
Registered: 12-12-2004
Fri, 11-07-2008 - 12:37am
Hi, Peg. Ah, it seems crazy that they would go thru all of this paperwork for the purpose of closing or inactivating the account.
iVillage Member
Registered: 01-25-2006
Fri, 11-07-2008 - 10:26am

I don't believe it will affect my credit rating because it will show that I closed it and I am not carrying credit card debt so they did not affect my debt to available credit ratio.

Peg

iVillage Member
Registered: 03-07-2005
Fri, 11-07-2008 - 4:24pm
I doubt they see you as a risk~they'd probably approve you if you reapplied. They probably didn't reissue the card since there wasn't anything in it for them. I wonder if they have some sort of dead account list--like if you haven't used it in years, KWIM? It may be kinda a good thing at least in some instances, if a person has moved or died or whatnot.