Closing Credit Card after Promotion 0% APR offer

Discuss the Visa & MasterCard payment networks as well as cards that operate through them.
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rsudhakar948
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Closing Credit Card after Promotion 0% APR offer

Postby rsudhakar948 » Thu Jul 02, 2015 12:44 am

Hi I have 3 credit cards in my wallet currently.

1. Citi Double Cash - 6 Years Old.
2. Chase Freedom - 4 years old.
3. BankAmericard Cash Rewards - 1.5 year old.


I usually don't carry more that 20 % balance on all the three cards individually . I usually carry balance less that 20% on all the cards individually and cumulatively.

I would like to know if it is a good idea to close the 1.5 year old bank of BankAmericard Cash Rewards Credit Card. As i am done with 0 % APR with this card. I would like to pay of the all the due amount to BOA and close the credit card . Once i close the BankAmericard Cash Rewards Card, i would like to wait for 3 months and then apply for new BankAmericard Cash Rewards Credit Card with Fresh Application.

I do understand that closing a credit card will decrease my available credit limit . Is this a good idea to do this.
What i would like to accomplish is , i would like to make use of 0% APR over and over.

i do understand that my new credit application will be based on my credit score and credit usage and other factors.


Please throw some light


kdm31091
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Re: Closing Credit Card after Promotion 0% APR offer

Postby kdm31091 » Thu Jul 02, 2015 5:41 am

Closing it and then reapplying for the same card 3 months later is a bad idea. You're going to (correctly) appear to be gaming the system/churning and thats if they even approve you again.

MemberSince99
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Re: Closing Credit Card after Promotion 0% APR offer

Postby MemberSince99 » Thu Jul 02, 2015 6:02 am

kdm31091 wrote:Closing it and then reapplying for the same card 3 months later is a bad idea. You're going to (correctly) appear to be gaming the system/churning and thats if they even approve you again.


So what? If it's within the rules he's not doing anything wrong.

The ONLY downsize is AAoA, and also if it's noticed as a pattern some lenders MAY not like it. Oh well. If he's willing to pay the price of having an account closed then re-opened, more power to him.

OP bear in mind you won't automatically be approved, but odds are with good history with them and overall history you probably will be.

But as far as "gaming" the system, oh please, the whole system is a game. Think about it. Who here hasn't opened a card for the sign up bonus, or a BT? In fact, the lenders use these things to try to get people to open cards. And so when someone does accept that, they are bad?

I just shake my head. I guess this terrorist of credit (who should be tortured for his crimes against ALL lenders) will burn in hell for all eternity if he churns a card....thanks for the chuckle to start my morning.

Vermonster
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Re: Closing Credit Card after Promotion 0% APR offer

Postby Vermonster » Thu Jul 02, 2015 7:29 am

Doing it once is not going to be a big issue. If anyone asks you can just say it was a huge mistake closing it. But there will be consequences for it. You will probably be given a smaller limit than you have now. You also want to check and make sure that you will actually qualify for the promo 0%. Most banks won't grant those benefits and signup bonuses to previous customers of the same card.

The better way to do it would be to open the new card first. Then you can ask to have the credit line moved from the old card to the new card. Again this would have to be with a different type of card.
Chase Freedom $9k~~Chase Sapphire Preferred $6.5k~~Amex Blue Cash Preferred $12.4k~~Citi Double Cash $4.7k

takeshi
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Re: Closing Credit Card after Promotion 0% APR offer

Postby takeshi » Thu Jul 02, 2015 7:43 am

rsudhakar948 wrote: I would like to know if it is a good idea to close the 1.5 year old bank of BankAmericard Cash Rewards Credit Card. As i am done with 0 % APR with this card. I would like to pay of the all the due amount to BOA and close the credit card . Once i close the BankAmericard Cash Rewards Card, i would like to wait for 3 months and then apply for new BankAmericard Cash Rewards Credit Card with Fresh Application.

Depends on what you specifically mean by "good".

From a scoring perspective it is generally recommended to have at least 2-3 cards. Closing a card decreases your available credit and has an impact on your revolving utilization. You can do the math to determine the impact. Opening a new account incurs a hit from the hard pull and the hit your AAoA but the newly available credit will also have an impact. You can also calculate the impact to your AAoA from adding a new account. What we can't tell you is how many points you'll gain or lose from all this as it's not just a matter of these actions but of your credit profile and how these actions impact your profile. Some people look to avoid any hits to their score but you can't make an omelette without breaking some eggs.

From the creditor's perspective it's a matter of how much the creditor is against churning. I doubt you'd run into an issue doing this but if you establish a patter of doing this, especially with creditors that are heavily against churning then you may run into some difficulty. I can't speak to BofA but you can probably find prior discussion on this and other credit discussion sites.

rsudhakar948 wrote:What i would like to accomplish is , i would like to make use of 0% APR over and over.

I can understand why but it's not really sustainable in the long run. At 20% utilization you probably won't have a problem getting approved but approvals are a low bar and you can easily slide downhill with this approach. You need to lower those balances and to avoid carrying them. Make sure you're budgeting and sticking to your budget. Granted, that's easy for me to say and I have no idea what your situation or finances are like.

MemberSince99 wrote:I just shake my head. I guess this terrorist of credit (who should be tortured for his crimes against ALL lenders) will burn in hell for all eternity if he churns a card....thanks for the chuckle to start my morning.

No one said the OP was a terrorist. That's your hyperbole and melodrama. What the OP is doing is churning. Whether or not that's an issue from a practical standpoint all depends on the creditor and their stance on churning. I'm not arguing that anti-churn creditors are right or wrong -- just pointing out the reality of the situation.

yfan
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Re: Closing Credit Card after Promotion 0% APR offer

Postby yfan » Thu Jul 02, 2015 9:08 am

MemberSince99 wrote:
kdm31091 wrote:Closing it and then reapplying for the same card 3 months later is a bad idea. You're going to (correctly) appear to be gaming the system/churning and thats if they even approve you again.


So what?

So a lot of things, actually. First, a lender is allowed to change the APR offer based on an applicant's application. Bank of America may well choose issue the OP another card in 3 months' time, for example, and not give him the promotional APR. Then what? OP is left having to close 2 of his 4 accounts within 3 months' time, or be stuck with a card they don't want.

BofA may also choose to decline to issue the OP a card in the future or give him a lower SL. So might other lenders, if they figure out what is going on from the history.

If the utility rises enough from the closure, other lenders may balance chase the OP.

OP - you are much better off sending BofA an SM and asking for another promotional APR for a period of time on your current card.

kdm31091
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Re: Closing Credit Card after Promotion 0% APR offer

Postby kdm31091 » Thu Jul 02, 2015 9:52 am

yfan wrote:
MemberSince99 wrote:
kdm31091 wrote:Closing it and then reapplying for the same card 3 months later is a bad idea. You're going to (correctly) appear to be gaming the system/churning and thats if they even approve you again.


So what?

So a lot of things, actually. First, a lender is allowed to change the APR offer based on an applicant's application. Bank of America may well choose issue the OP another card in 3 months' time, for example, and not give him the promotional APR. Then what? OP is left having to close 2 of his 4 accounts within 3 months' time, or be stuck with a card they don't want.

BofA may also choose to decline to issue the OP a card in the future or give him a lower SL. So might other lenders, if they figure out what is going on from the history.

If the utility rises enough from the closure, other lenders may balance chase the OP.

OP - you are much better off sending BofA an SM and asking for another promotional APR for a period of time on your current card.


That's a really good point. Why not just ask for an offer vs closing and then reopening?

Either that or just get a new, different card entirely with a 0% promo -- they are not scarce. Closing and then reopening the same exact card is not something I'd do. Yes, you will probably get away with it (if you get approved) once or twice before lenders catch on, but they will catch on.

kdm31091
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Re: Closing Credit Card after Promotion 0% APR offer

Postby kdm31091 » Thu Jul 02, 2015 9:55 am

MemberSince99 wrote:But as far as "gaming" the system, oh please, the whole system is a game. Think about it. Who here hasn't opened a card for the sign up bonus, or a BT? In fact, the lenders use these things to try to get people to open cards. And so when someone does accept that, they are bad?

I just shake my head. I guess this terrorist of credit (who should be tortured for his crimes against ALL lenders) will burn in hell for all eternity if he churns a card....thanks for the chuckle to start my morning.


And for the record I never said he was a terrorist. Just misguided, maybe. But it's just my opinion.

I will say I absolutely do not see BOA approving OP for the same card, with the 0% promo, a mere 3 months after closing. Doubt it.

Nobody said they never opened a card for a bonus. The difference is rinsing and repeating the same thing 3 months later (in this case for 0%, a benefit which almost every reward card offers anyway)...it would behoove OP to care what the bank thinks as they are the one extending them the credit.

rsudhakar948
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Re: Closing Credit Card after Promotion 0% APR offer

Postby rsudhakar948 » Thu Jul 02, 2015 2:48 pm

Please allow me to clarify the confusion. At first I don’t want to repeat this task over and over. I just want to know how that would work.

The reason I had this thought in my mind is . I have the BOA Credit card at 22 % APR currently for standard purchases . I don’t say that the I am not interested in 0% Promotional APR. The 0% promotional APR did allure me to end up with this idea.
But My main concern in the back ground was the standard 22% APR for regular purchases. How could I reduce this Standard APR of 22%. I know I can put a request BOA, but I am not sure they are going to reduce my regular 22% APR for purchases.


So after reading some posts online, I ended with this question below.

Question: What If I pay the full balance amount to BOA and close this credit card and apply the same credit card after couple months. My main intention here might be to get a lower APR for the second time I apply the credit card with BOA.


Any way I highly appreciate your input.



kdm31091 wrote:Closing it and then reapplying for the same card 3 months later is a bad idea. You're going to (correctly) appear to be gaming the system/churning and thats if they even approve you again.

rsudhakar948
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Re: Closing Credit Card after Promotion 0% APR offer

Postby rsudhakar948 » Thu Jul 02, 2015 2:52 pm

Thanks a lot for the input. I truly appreciate the way you receive other peoples ideology .

MemberSince99 wrote:
kdm31091 wrote:Closing it and then reapplying for the same card 3 months later is a bad idea. You're going to (correctly) appear to be gaming the system/churning and thats if they even approve you again.


So what? If it's within the rules he's not doing anything wrong.

The ONLY downsize is AAoA, and also if it's noticed as a pattern some lenders MAY not like it. Oh well. If he's willing to pay the price of having an account closed then re-opened, more power to him.

OP bear in mind you won't automatically be approved, but odds are with good history with them and overall history you probably will be.

But as far as "gaming" the system, oh please, the whole system is a game. Think about it. Who here hasn't opened a card for the sign up bonus, or a BT? In fact, the lenders use these things to try to get people to open cards. And so when someone does accept that, they are bad?

I just shake my head. I guess this terrorist of credit (who should be tortured for his crimes against ALL lenders) will burn in hell for all eternity if he churns a card....thanks for the chuckle to start my morning.
Last edited by rsudhakar948 on Thu Jul 02, 2015 2:56 pm, edited 1 time in total.



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