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Got the letter today in the mail and my credit card company is going to close my account for non-use unless I use the card. I have 30 days from today to use or lose it. Will my credit score be affected if I allow the credit card company to close my account? I could always send my credit card company a letter to close my account and avert any action from them.
It is a catch-22 and they know it. Last I heard, when you OR the co. cancels your card, your credit rating takes a dive.
Not permanently, but reportedly it takes a while to build back up. Honestly I have forgotten how it works but it seems so unfair...google this question and see what you get...
Some keep at least one card no matter what. You must be able to get some instant cash and also keep a good credit rating, particularly if you are young. You could just buy groceries and pay off at the end of the month.
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Originally Posted by virtual cowboy
Got the letter today in the mail and my credit card company is going to close my account for non-use unless I use the card. I have 30 days from today to use or lose it. Will my credit score be affected if I allow the credit card company to close my account? I could always send my credit card company a letter to close my account and avert any action from them.
If the card has no fee, I say go out every 6 months use it for few transaction, then pay it off that month.
If the card has some fee, let it go. Your score will take a small hit, but not much of one, and will recover in few months. You only need to worry about spikes in your score if you are going to buy a house, or a car, other then that it the minor ups/downs don't matter.
If its your only card keep it active, for emergency (car rentals, airplanes etc). Credit cards give more protection then using a debit card.
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If it's your only card then closing it will hurt worse then if you have other cards. If you have no other cards then closing it would mean that you have no active credit card history and that could get in the way if you plan on seeking credit now or in the future.
If you close it you will still have the history of the card for the next 10 years but the credit limit will no longer be factored in. So if you have other cards that have balances then your overall utilization will go up, which could cause your scores to go down.
If the card has an annual fee then you might use the card to keep it from being closed. Then, if your credit allows, try to find a card without an annual fee and close the annual fee card the next time the fee is due. If the card has a monthly fee then before it's closed you might first try to find a card to replace it and cancel the fee card yourself.
Another factor is how long you have had the card in relation to your other cards
If this card is one of your oldest and charges no fee I would keep it open. A portion of your credit report is based on longevity.
Also keep in mind if you do have other cards with balances having a card with available credit can balance out the cards that might be over 50% of their limit
If this isn't one of your oldest cards and you can do without it
Call the company before the 30 day point and close it yourself
Closed by consumer is must better than closed by creditor
It may take a brief hit but not for long really. Bascailly wit new ruloes coming on how they profit CC companies are closig more cards that do not pay to service the accounts.Mnay even using enough wil find a return to service fees( annual fees) to keep accounts open.
Got the letter today in the mail and my credit card company is going to close my account for non-use unless I use the card. I have 30 days from today to use or lose it. Will my credit score be affected if I allow the credit card company to close my account? I could always send my credit card company a letter to close my account and avert any action from them.
As others have said, closing the account will have a negative impact on your credit score as it will reduce your available credit. But the action of having the creditor close the account vs. you closing it won't make any difference.
If you are planning to get a mortgage in the very near future and need to maintain your credit score at a certain level then do as others have said and make a small purchase to keep the account open. Otherwise I wouldn't worry too much about it.
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