Comments on: Credit card company canceled my cards because they were not used, will that ruin my credit score?

By: StephenWeinstein

StephenWeinstein — Sun, 14 Feb 2010 02:35:06 +0000

No, it will not ruin your score. If those cards were helping your score, then it may (eventually) cause you to lose that benefit. Otherwise, it will not hurt you. In fact, this may even improve your score, if you previously had too much credit “available” to you, because closing the account reduces the amount of credit available.

By: Dan B

Dan B — Sun, 14 Feb 2010 02:16:22 +0000

I have in the past, but not since 1988 when I quit using credit cards. Banks are going through great lengths to reduce their credit card risk and increase profits. Banks will use any excuse or method to justify higher interest rates. That’s how they make their money. Closing your account drops your score a little, but it is not permanent.

I would think that a person with few or no credit cards is a better risk because they don’t have the POTENTIAL of a large credit card debt. Let’s say you have 5 credit cards with $2,000 limits but $0 balances. That represents a potential debt load of $10,000 that may impact your ability to pay other debt obligations. That should increase your credit risk rating. You would have higher interest rates on your loans.

Now, if you close 4 of those accounts, your potential debt load is $2,000 which may be easier to handle. But the banks don’t want to see it that way. You’ve lost some credit history. That’s bogus in my view. It’s still in your credit report. But the banks will use that as an excuse to raise you as a risk, increasing your interest rates.

So, it doesn’t matter what you do. You’ll still get hit with higher interest rates. They are getting just as bad as payday loan companies. Wouldn’t it be great if everyone just stopped using credit cards?!!! Banks would not make money on interest. They won’t get the 2%-3% “tax” they charge on each credit card transaction.

By: J J

J J — Sun, 14 Feb 2010 01:44:42 +0000

Check your Bureau, if it says CLOSED BY GRANTER under the account, then the effects will last much longer than simply reducing your amount of total available credit …

Some granters even view this as a derogatory.

By: Classy Granny

Classy Granny — Sun, 14 Feb 2010 01:35:49 +0000

I just had a credit card send me a letter that they were reducing my available credit from $14, 500 down to $8000 because the card was paid off a year ago and I haven’t used it. At this point, I don’t care if it lowers my score. I’m working my way to being debt free

By: David Z

David Z — Sun, 14 Feb 2010 01:24:38 +0000

ruin is harsh term and suggests permanent.

It will deminish your credit score for a while because your available credit has declined. No big deal.

By: bdancer222

bdancer222 — Sun, 14 Feb 2010 01:20:10 +0000

If you were carrying balances on other credit card accounts, it might impact your score. Closing the account lowered your overall limit which would increase your debt to limit ratio. Carrying balances of more than 30% of your limit, hurts your score. If you don’t carry any balances, this makes no difference.

If the account was one of your oldest ones, it could also impact your score.

You have to use credit card accounts every 3 or 4 months to keep them active. Many credit card companies are clearing up their books by closing accounts after shorter inactive period.

By: jlf

jlf — Sun, 14 Feb 2010 00:46:45 +0000

It will hurt in that it decreases your total available credit limit. Open accounts need to be “exercised” to prevent this. Make a small purchase every month or two and pay it off in full when the bill comes.