Auto-Closed Credit Cards

For just about anything you want to get off your chest about credit cards.
4 posts
itsmeandrew
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Location: Utah

Auto-Closed Credit Cards

Postby itsmeandrew » Sat Apr 04, 2015 9:33 pm

In the last couple of days, I've received notices that two of my credit cards have been closed by creditors due to inactivity. One was a financing card I used to buy my wife's ring that I've had open since 07/2012. The other is my student Wells Fargo credit card I've had since 08/2011. How big of an effect will this have on my credit?

I'm not too worried about limits going down and utilization, but more about AAoC.
Capital One Platinum $500 (2/2010) CLOSED (1/2013)
Wells Fargo College Cash Back $1.2K (8/2011) CLOSED 3/2015
Chase Freedom (Signature) $10K (4/2012)
AmEx Zync NPSL (4/2012)
Samuels Financing $2.9K CLOSED 4/2015
Discover IT $3.95K (7/2012)
Chase Marriott Premier (Signature) $5K (9/2012)
Chase Slate $2.5K (12/2012)
Citi Simplicity $4K (3/2013)
AmEX BCE $9.5K (5/2014)
Chase Amazon $4.5K (5/2014)
Barclaycard Apple Financing $2K (6/2014)
Capital One VentureOne (Signature) $5K (1/2015)


TU (Discover): 760


takeshi
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Location: US

Postby takeshi » Sat Apr 04, 2015 10:47 pm

Immediate impact is to utilization. AAoA is not impacted until the closed accounts fall off your reports.

rockyrock
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Location: Ventura, CA

Postby rockyrock » Sun Apr 05, 2015 4:00 pm

I'm not sure how this will impact your score but your reports will say: closed by grantor. That happened to me with my Sears card many years ago from inactivity. Still says that on my report--grrrrrr.
Sapphire Reserve: travel & dining (almost everything until I meet my initial spend)
Blue Cash Preferred: groceries & gas
Freedom: 5% cats
Double Cash: everything else

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CarefulBuilder14
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Postby CarefulBuilder14 » Sun Apr 05, 2015 11:16 pm

rockyrock wrote:I'm not sure how this will impact your score but your reports will say: closed by grantor. That happened to me with my Sears card many years ago from inactivity. Still says that on my report--grrrrrr.


I don't believe it can affect an actual FICO score, but the "closed by grantor" label could possibly be a subjective factor that human analysts or risk-monitoring analyst software consider. I suspect it would be a big red flag to other creditors if one issuer closed several of a customer's cards within a short period of time - especially if the cards weren't very old. If Chase closed all four of the OP's cards within a week or two, I think that would certainly spook other lenders.

But I don't think the OP has anything to worry about from these closures.

In the case of Samuels (Jewelry) Financing, it's a Comenity store card. Since Comenity issues mostly (if not exclusively) store cards, I think a credit analyst would realize that it was only closed due to inactivity.

In the case of Wells Fargo, it was an older, low-limit card. The OP has several newer, higher-CL prime cards that are in good health, which should allay any concerns about the two closed cards.

On the other hand, my "if I was a credit analyst" reasoning has sometimes not corresponded to reality. You'd have to work in an issuer's risk department to really know for sure.
Warranties and sketchy merchants: Schwab Platinum
Price rewind: Costco
Travel insurance: Prestige, CSP
Perks: IHG, Hyatt
Rewards/Offers: Discover, Freedom, ED, BCE
Taxes/Misc: SPG

Limited value, might close: Arrival

Might add: First Tech, proper business card



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