A few months ago, I got several emails from Citi with the title “Notice of account closure“. They were closing several of my no-fee cards for inactivity. There was no warning or opportunity to generate activity and prevent closure. They already closed the cards. All data points from the community indicate no possibility of reopening (but “you’re welcome to reapply”).
Now, I don’t remember exactly how long it’d been since I used any of those cards. My guess would be a year or more. My recommendation would be to use all Citi cards at least once every 6 months. Of course, the reason I hadn’t used them is I don’t have any use for them. I was keeping them around mostly just because. So I didn’t feel too bad. I was slightly concerned whether it would affect my approval for new cards, but so far it hasn’t had any effect. Note, your AAoA (Average Age of Accounts) shouldn’t be affected – I believe it only considers what cards you ever opened; it doesn’t matter whether they are still open. What will be affected is your debt to credit ratio – you are losing the credit lines of the closed cards, therefore the ratio will be less impressive depending on how much credit you are losing. Again, it hasn’t affected my new cards approvability so far.
However, one negative consequence I hadn’t considered is that the closure resets the card family sign up bonus eligibility, because Citi applications state something like: “Bonus ThankYou points are not available if you have had ThankYou Preferred, ThankYou Premier or Citi Prestige cards opened or closed in the past 24 months.” Well, one of my closed cards is a ThankYou card, so that family was reset. Now I need to wait 6 months longer before I can get a sign up bonus again on a ThankYou Premier or Prestige. GRRR!
I wish Citi would give some sort of advanced warning/notice. I once received a notice from Chase saying they are going to close one of my inactive cards in 30 days and there’s nothing I could do. I proactively closed it. I wish Citi would at least do that. But really I wish they would give a warning with opportunity to generate activity and prevent closure. Note, I’m not sure whether voluntary vs involuntary closure affects the credit score / approvability. If you know, please leave a comment.
In a nutshell
Use your old Citi cards – and really, all cards – at least once every 6 months. Don’t risk having your future sign up bonus eligibility reset from under you.
HT: Award Travel 101
Pretty sure I read that PCing a Chase CC would prevent account closure, after the person was told there was nothing they could do to keep it open. Not really an option on most of the co-brands though.
Interesting!
It’s not quite true that closing an account has no impact. With the new FICO9 scoring it’s unclear; under the old scoring, a closed account continues on your AAoA for 7-10 years, then falls off. So yeah, you’ll feel a reasonable ding then but then again, AAoA is only about 15% (new Fico9 % is not as clear) of your score. If the one closed card was as old as the hills, you probably should take advantage of that if doing the mortgage dance were every FICO point counts, before the card drops off in 7 years.
In California they’re required to give 30 days notice.
Thank you for this warning. I am sitting on 3 Citi cards. One I haven’t used for about a year and the other 2 are Aviators that I just swiped once for the 60k bonus. I have taken them from the underwear drawer and plan to use them all at least a little. Again, thank you!
You’re welcome! Aviator 60k is a Barclay product – but the same recommendation applies!