I recently received a change in terms and conditions from Chase regarding one of my credit cards. I applied for this early on in college and have never really used it. I was thinking of canceling the card anyways since it's fallen into disuse. I remember from earlier threads that if I called and canceled, my FICO would get dinged. However, now I can simply reject the terms and conditions and Chase would automatically close the account for me. If I follow this route, would it still adversely impact my credit score? Thanks.
To enter a coupon code in your post please enter the following info:
Coupon Code:
Coupon Offer:
Merchant:
Expires (optional):
Restrictions (optional):
saving...
Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.
Jobowoo said:I recently received a change in terms and conditions from Chase regarding one of my credit cards. I applied for this early on in college and have never really used it. I was thinking of canceling the card anyways since it's fallen into disuse. I remember from earlier threads that if I called and canceled, my FICO would get dinged. However, now I can simply reject the terms and conditions and Chase would automatically close the account for me. If I follow this route, would it still adversely impact my credit score? Thanks. Unless there is an annual fee, why bother closing. Anyway, no practical diff. whether you call and close or let Chase close it.
I've had several of my rates increase on my cards. So what? I don't carry a balance. I never cancel. Only when i see annual fees start popping up will i begin to close accounts. Even then, i'll call and try to change to a different card with no annual fee to keep my credit history.
The other damage would be Less total Credit Limit = Greater Utilization Percentage. Who cares about a change in terms for a card you're not using, unless it's an annual fee? Do what RedCelicaGT suggests.
On a similar note, who cares if your credit score is lowered? It's only short term. You should only care if you intend to apply for a loan within the next few months. Otherwise, so what. Hehe...there's a caveat: what if your 4 credit cards are from Chase, BankofAmerica, Citibank and Chase, and all 4 are being imposed an annual fee and they wont allow you to convert your account to a different credit card with no annual fee. Then, what?
It depends on how much unrelated credit you have. Do you have and use a diffent credit card(s)? Only answer yes or no.
First off, congratultions if you finished your education without this card being a boat anchor around your neck. Too many college students cannot say that.
IF you only have one other creditor, then it could be a serious ding depending on how much if any you use the other credit. It also depends on the kind of credit in use. IF each credit line is about the same $$ credit limit, then when you close it, you reduce your total available credit about 50% in my example. That could cause the score to drop.
On the other hand, if at some future date, you apply for credit and have a decent job, the ratio of your debt (and separately possible debt aka total of credit limits) to your income work income could work in your favor ... especially if you apply for a mortgage or car loan.
IMO, you want at least two credit card accounts open. One would be a rewards type card which you pay off every month by the due date. The other would be a backup card in case something happens to the main use card. Make a point of using it every few months and paying it off to keep it open.
IF you do this, then close or do not close the card you are asking about. Any ding would be for a few months only depending on the ratio of total availble credit. The other factor would be the ratio of any credit in use to the credit limit of any single card and separately total credit available.
RedCelicaGT said:I've had several of my rates increase on my cards. So what? I don't carry a balance. I never cancel. Only when i see annual fees start popping up will i begin to close accounts. Even then, i'll call and try to change to a different card with no annual fee to keep my credit history.
My recent interaction with Chase with a credit card that had an annual fee was that (1) they will not convert the card to a no fee version (must close and apply for a new card) and (2) they will not reallocate to another Chase card. Both are recent developments that the CS rep said was a direct result of the new Credit Card legislation.
Citi allowed me to convert my annual fee American Airlines card to the Bronze fee-free card.
If you are trying to have a second card possibly for emergencies you might consider looking for a low interest rate one.
If you ever do wish to borrow money it should be at a low rate. If unemployed it is hard to get credit cards, so getting one now may be good.
At one time, and probably still true some of the lowest rates were on Arkansas Bank cards because their laws required them to have low rates. Naturally, the banks (Pulaski for instance) would only issue cards to the best credits, since they could not afford many defaults.
Planning ahead, one might pick a time when your credit score was high (other cards paid down) and try to get a good rate card.
Often you will find that the rewards cards (especially airline ones) have higher interest rates because they figure they will make up in interest what they lose in rewards. CITI just raised the rate on my Forward card (5% on restaurants and book stores) to over 29% with no reference to anything on my credit report.
Your card picked for rewards may not be the one you want to use if you lose your job, have high medical expenses, decide to redo a house, get married and furnish one, or anything else where you expect to carry a balance. If you do the calculations, a few dollars in rewards can be quickly eaten up in interest if you carry a balance. Hence lining up at least one such card when employed and using it occasionally to keep it active is probably wise.
Message edited by: ProfessorEd on 2009-10-29 14:04:08 CDT
For JW, I can see little reason to pay Chase a fee unless the reward program is really good , or you cannot get credit elsewhere. From you comments it sounds like there is nothing special except the history and it is not worth paying to keep that, especially since the card will stay on record for a few years in any case.
I would line up another card and then cancel the Chase one, or possibly cancel now if the fee must be quickly paid. Unless they are giving you 5% on groceries or something similar, anything Chase has can easily be gotten elsewhere free (I like the Schwab 2% card). As pointed out, if the Chase card is a large part of your available credit, you may wish to get the other card or cards first, and then cancel.
bankdealsrule said:On a similar note, who cares if your credit score is lowered? It's only short term. You should only care if you intend to apply for a loan within the next few months. Otherwise, so what. Hehe...there's a caveat: what if your 4 credit cards are from Chase, BankofAmerica, Citibank and Chase, and all 4 are being imposed an annual fee and they wont allow you to convert your account to a different credit card with no annual fee. Then, what?
It wont necessarily take only a couple months to repair the damage. When I was younger, I had a USAA credit card from when I was 16. I didn't really start caring about finance type stuff until a couple years ago, which meant I had that one CC with an 8 year history, and now a couple cards with a fairly short history. If the card getting canceled is the oldest one by far, it could do a bit more damage than if its just one of many.
this may not seem like much, but with chase cards that i no longer use due to terms/rewards change - i just charge ~$1.50/month to each of them since chase will credit the money to you if your monthly statement is <$2.
here is the link for canceling small balances Text
it seems chase now drops at $0.99 rather than $2. i have an old wamu card that canceled last statement of $1, but the freedom card just got downgraded and paid off so i guess i'll see if my $1.50 charge is canceled before i switch to $0.99 charges
IamN41 said:What about the idea of canceling a credit card so that you can sign up for the same card in the future and get the sign up bonus?
Assuming you don't have a long history with the card and don't have any plans to apply for a big loan in the near future, is that a bad idea?
Would you need to wait 6 months, 1 year before applying for the card again? A credit card issuer might say...what about the idea that we wont allow an individual (id/ssn) to get more than one rewards / bonus with us ever.
1 Once your application for the American Express Platinum card is approved, you can earn 25,000 Membership Rewards® bonus points when you spend $1,000 in your first 3 months of Card membership. To be eligible to earn bonus points, you must be enrolled in the Membership Rewards First® program at the time of purchase and you must charge your purchase on an eligible, enrolled Platinum Card®. Bonus points are awarded after the spend requirement has been reached and will be credited to your Membership Rewards account. Bonus points may be redeemed for one round-trip domestic airline ticket or any reward of equal point-redemption value, or retained for future use. This offer is valid for first-time American Express Platinum Card members only. You are eligible to receive bonus points for only one Card account. Additional Card members are not eligible. Bonus ID 1427.
Sadly, Citibank doesn't disclose specifically; but have been reported on a Citibank checking account FW post that Citibank has memory: *Offer is not valid for existing Citibank checking customers. All accounts are subject to approval. Participation limited to United States ("U.S.") citizens or resident aliens with a valid U.S. taxpayer identification number. Customer is responsible for taxes, if any. Persons under 18 years of age are not eligible. Offer may be modified or withdrawn at any time without notice, is not transferable and cannot be combined with any other offer. Customer must open a regular checking account in a Citibank Account or Citigold® account relationship package by 09/30/2009 and deposit a minimum of $1000.
Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.
