Comments on: How to Minimize the Impact of Canceling A Credit Card

By: Shock

Shock — Wed, 09 Dec 2009 05:19:11 +0000

Offended? Take the emotion out of it. You’ll be much happier.

By: Tima

Tima — Tue, 01 Dec 2009 20:43:56 +0000

Thank you Jim for the simulator link. I tried it out and was astounded how small changes, like a couple of inquiries, can alter my score. It was interesting knowing that in about 6 months, my credit score will max out unless I make some changes, like acquiring a different kind of loan (I currently only have 2 kinds). A very helpful tool indeed.

By: Michael

Michael — Wed, 26 Aug 2009 07:16:47 +0000

I think most of this “deadbeat” stuff are scare tactics. Nothing is free in this world. The reason they give you rewards is that they make money from you even if you pay it off. They charge between 1-3% (I think) to the merchant for every purchase. They may not be making much money off of you but they are definitely not losing money. If they were they would just cancel your card. If they do, who cares. There are so many rewards cards out there that it’s unlikely that they will all dry up. The only reason I use a credit card is because I get about $500 a year in rewards and there is some extra protection for big purchases. If the rewards programs dry up I will just use cash again, no big deal.

By: Michael

Michael — Wed, 26 Aug 2009 07:10:04 +0000

Citi is a little different. Every time I have to call them for something I ask for a credit increase and they bump it by a couple thousand on stated income without any credit checks. If a bank is decreasing your limit when they look at it that probably means that you are abusing credit cards and living well beyond your means. You should never charge more than 20% of your total limit any given month, and never ever carry a limit.

By: GoodCreditGuy

GoodCreditGuy — Sun, 23 Aug 2009 13:25:46 +0000

Cards issued by banks are ‘either’ a charge card or a credit card, although they’re the same card. If the balance is paid off before any interest is incurred (like me), you use it as a charge care…….if a running balance, with interest being paid, is your bag , you have a credit card. I have a charge card with cash-back option so I actually MAKE money off my charge card.

If people are so poorly disciplined as to have to pay exorbitant interest (or any interest for that matter) they pay for their lack of discipline where I am rewarded for ….ta da….having discipline

not too complicated

By: Shawanda

Shawanda — Sun, 23 Aug 2009 01:02:01 +0000

@dilbert69 – As far as credit card companies increasing the interest rate of good customers (those who don’t make them any money) go, I fear this behavior is indicative of what lies ahead. Clearly I’m no more a default risk now than I was over the last three years. So, why the increase?

I’m curious to see what other schemes they’ll try to concoct in the coming months to extract additional dollars from “deadbeat” customers like you and me.

By: dilbert69

dilbert69 — Sat, 22 Aug 2009 19:39:44 +0000

What difference does the interest rate make if you don’t pay it? I’m utterly unaware of the interest rate on any of my cards. They could double overnight and I wouldn’t even notice, much less be offended. I’ve also asked all of my card issuers to stop sending me those ridiculous checks, and so far it’s worked.

By: Shawanda

Shawanda — Sat, 22 Aug 2009 19:14:43 +0000

Good to know for someone who fears she might have to terminate her relationship with her current creditors.

I recently received a letter from American Express stating they’re increasing my interest rate in October. Which is peculiar since I’ve never paid them a cent of interest since we began our relationship in 2006. However, I’m still offended by the increase.

If Bank of America and American Express get any more ridiculous than they already are, then I’ll take my business else where. Or at least change my reward program. I’m still leery of putting large purchases on a debit card.

I never really considered getting a credit card from a credit union. I’ll have to see what kind of rewards they offer.

By: Adam@RabbitFunds

Adam@RabbitFunds — Sat, 22 Aug 2009 17:34:53 +0000

Good article. I’m often surprised by how many consumers don’t understand how credit scores are calculated. I like the fact that you pointed out several factors such as credit utilization and average age of accounts. Also, I think you aptly pointed out how to use those factors to your advantage. My only caution to readers is that if you have overspending issues (i.e. you can’t control yourself), having an account or two closed will be far less damaging to your credit then late and missed payments.

By: Dan

Dan — Thu, 20 Aug 2009 23:16:30 +0000

re: Debit Cards – you can get into very dangerous territory if you overdraft. Also, they provide very little protection in case of fraud. Someone can wipe your entire bank account out and it takes longer to dispute fraud debit card transactions then credit card transactions. Wouldn’t you rather have your credit line temporarily maxed out than your account liquidated?!

re: “Request Credit Line Increases” – that is VERY dangerous advice to give in this credit environment, Jim. Many companies, Bank of America/FIA for example, when you submit such increase requests, submit your entire account for review to a credit analyst where more often than not your card gets a credit limit DECREASE or account closure. Most banks do not want to see a request for an increase these days. I would be VERY careful when asking for one.

By: eric

eric — Thu, 20 Aug 2009 17:42:16 +0000

I haven’t been canceled on yet either but good advice to keep in mind.

By: dilbert69

dilbert69 — Thu, 20 Aug 2009 16:04:34 +0000

Discover did recently cancel my card, which presumably lowered my credit score. They said it was for inactivity, but the never gave me a warning that I was in danger of losing it. I don’t really miss it, and I assume my credit score only went from 800+ to 790+. Also, I’m not in the market for new credit. But now you have one piece of anecdotal evidence that Discover also cancels people’s cards without warning. I always thought it was called Discover because every time you go to use it, you discover they don’t take it.