I have a Citibank Visa card that I haven’t used for a while, probably since I got my Amazon Visa, because, hey, free stuff from Amazon.
Realizing that I hadn’t used it in a while, I called them to cancel it a while back, and they went through this huge song and dance to talk me out of it. They said that it helped my credit score that I’d had an account for a long time with one company. Okay, fine, whatever, I relented. Nice to have it for emergencies, I guess.
But today I got a letter that said that they were canceling my card because I haven’t used it in a year.
First: WTF? The guy I talked to last time sounded like he would just cry if I cancelled my card.
Second: Is there any reason I should stop them from cancelling it? I mean, after all, that’s what I’d wanted in the first place . . .
So, what do you think?
My FIL, who does a lot of financial stuff that I don’t understand, says that it’s important for your credit score that YOU close any account that is closed. Why, he never told me, so I can’t be totally sure about this.
Answer is somewhat dependent on how your credit is already. If you’ve got good credit-no big deal. If your credit is iffy, then you should consider using the card every now and then, paying the balance and in the process improving your credit. My 2¢ for the day. 
From what I got from watching Suze Orman (standard disclaimers, etc.) it is beneficial to have several credit cards open. In fact, it can actually harm your credit score to close them out. Why? Creditors look at your available credit-to-balance ratio. Say you have 5 cards, each with a $2000 limit. That’s 10k total credit. Say there’s only 2k of debt spread between the cards. So you’re only using 1/5th of the credit available to you. If you move all the debt to one card, then close the other four, suddenly you have a 2k limit which is maxed. That doesn’t look so good.
Couldn’t tell you why they have the sudden change of heart, though. Charge something and pay it off.
As far as I know, my credit is fine. I have a couple of cards, paid off in full every month (unless I forget and send in my payment late, which happens now and then, but I hear that’s not a big deal.) Had no problem getting a car loan from our credit union a couple years ago. I’m paying off the car loan and my student loans on schedule.
Thanks for the input.
You might be interested in the “Capital One. You suck.” thread in the Pit: very little (if any) swearing, lots of discussion about credit and cards and FICO scores.
I would leave it open, all things being equal. More available credit means less utilization, for one, and higher overall dollar amount in extended credit is generally a good thing.
I remember one of the ‘Improve your Credit Score’ tips (from mycredit report.com, I believe)was to keep your longest held credit card open, even if you dont use it. Part of your score relates to how long you have had credit, and closing your first card could remove those years from your score.
Well, Ithink you’ll probably find that there are two separate objectives in play within Citi
[ul]
[li]The customer services team are tasked with making sure no-one cancels their card[/li][li]Another team somewhere is tasked with keeping zero-spending cards below certain limits[/li][/ul]
Left hand and right hand, etc.
Active cards = more potential billings
Non-spending cards = cost of maintaining account without any revenue
I’m going to vote to let them close it.
Of course, I had my identity stolen last year, and spent days calling and writing every place I had ever bought something on credit, and it turned out my account was still open. Just so you understand where I’m coming from.