Since I’m still getting back in the swing of things at home, I’ve been doing some housekeeping in regards to my credit card accounts. I figure the “clean up” mentality post vacation should help me alleviate some of the issues I’ve had staying on top of my game. One thing I’ve wanted to touch upon is something that has affected me personally three times in the last year – credit card companies proactively closing my accounts.
I know most readers are aware of this, but just in case, something we always need to remember is that the average age of accounts has an effect on our credit score. The longer the average age of our accounts is, the better. Moreover, the total amount of credit available has an effect on our score as well. Bottom line, you want lots of credit available and an older average age of accounts in general.
So what three cards have I gotten cancelled on me recently? Three no annual fee cards that I’ve just been holding on to to keep my average age older. The first card that was cancelled was half a year ago – Bank of America cancelled the credit card that I had had with them for almost ten years. That was fair since I hadn’t used it in like, eight years, but I wish it hadn’t happened. Then, my Discover Card was cancelled proactively and I was told there was no way to reinstate it except for to apply again. That one particularly hurt because I was thinking about starting to use it again due to the 5X bonuses and my renewed faith in cash back.
I found out about my third card cancellation the day I got back from my trip. I applied for a Delta Skymiles card with a 50K bonus after my buying and cancellation of tickets to Los Angeles. After the second purchase I received a special offer and pulled the trigger. American Express saw I hadn’t used my HHonors card in 13 months, proactively closed it and moved the line of credit over to my new card. This time, thankfully, they let me reopen the card with a simple call. Even if they hadn’t, at least they had preserved my credit line.
Anyway, you may have remembered me mentioning that to stay on top of annual fees I have started to set Google Calendar reminders for myself. I’ve decided I’m going to do the same thing with my no annual fee accounts so that I remember to make at least one purchase on them per year. The majority of my no annual fee cards are my oldest ones and I don’t want to risk losing them. If I’m gonna get shut down, it’s gonna be for shady spending not non spending! jk…sorta. Hopefully this post will help nobody else gets their no annual fee accounts shut down without their consent.
Anyone have similar experiences or any better ideas?
I didn’t know they proactively close inactive accounts. Does Amex consistently do so after a year or so of inactivity? As a suggestion for activity you can buy a 50cent amazon e gift card and load it to your Amazon account with a single click.
My guess is now that the economy is better companies are starting to be a bit more proactive about cancelling cards. I mean technically they can cancel your card whenever they want (esp. if you’re up to shenanigans). I think one purchase, yes, even for 50 cents, per year should keep all the no annual fee cards active!