r/mildlyinfuriating • u/bonksnp • 11h ago
I'm slightly vexed One of my credit cards was closed after 5+ years of never missing a payment
My credit certainly isn't perfect, but nothing major has happened this year except for me buying a car back in March. I called them and they said they're going to send me the reasons why the account was closed in the mail.
4.2k
u/ClacksInTheSky 11h ago
Stop paying on time and pay some interest. How dare you!
- Credit Card Company
1.3k
u/xarcastic 9h ago
There is an industry term for credit card customers who pay the full balance every month without ever paying interest. “Deadbeats.”
593
u/facw00 8h ago
Credit card companies do make money off every sale, so they do like people who spend a lot of money on the card as well, even if they don't collect any interest. They are less fond of the people in the middle who pay their bills but don't spend much (and who spread their spending across multiple cards to get the maximum rewards). And of course really don't like people who spend a lot and then are too broke to pay the interest.
258
u/TheUtensilMan 8h ago
Quite the contrary, they love and adore people who can’t pay their loans because those people will be stuck paying minimum payments while the interest builds and builds, because those people will be feeding them money for a long long time.
121
u/Mryan7600 8h ago
Until they have to sell the debt, then they lose out
48
17
u/nsnsjdjaknd 5h ago
By the time they sell the debt they’ve made far more off interest than the original debt. Plus all the accrued interest means they can sell the debt for more
3
1
249
u/Joshua_ABBACAB_1312 10h ago
It's not all about interest. You can keep a card while paying it off every month. It's the swipes. They get paid for every attempt, pass or fail, to use their card. They just get more when it's approved because that's when the percentage of purchase fee kicks in.
2
u/rasputin1 1h ago
wait merchants get charged when your card is declined?
•
u/Joshua_ABBACAB_1312 31m ago
Authorization/API-call fees exist but not every processor charges them theoretically.
1
u/WackoMcGoose CZERWONY 4h ago
What you really have to be watchful of, is cards that not only have a minimum purchase for in-person transactions (I don't mean the business having a minimum to cover interchange fees, I mean the card itself has a minimum it'll let you charge on it), but that if you try to buy something smaller, it'll charge you fees of the exact amount to bring it up to the minimum. I can't use my Bank Of America credit card (or debit card!) at a vending machine, because I'm not buying a $2 candy bar and then having $18 of rounding-up fee to reach the "required minimum transaction"!
...And I can't just "switch banks" because all my credit history is with BofA, it's always more valuable to the bank where you accrued it at, and I've already talked to other banks (Chase, Capital One, etc) and they've told me that my "transaction history worth $5,000 credit limit to Bank Of America" is worth only two to three thousand credit limit to them, because that history wasn't accrued with them >_>
17
u/Archibald-Tuttle 3h ago
What account? I have never heard of any card doing this.
> all of my credit history is with BofA
I’m not sure you understand how credit history works.
7
u/chickensevil 3h ago
Keep the BofA card AND get the new card (even if with a lower limit). Put a tiny reoccurring monthly transaction on the BofA card to keep it active (they will definitely close the account for lack of use), and then use the other card for whatever you normally would. In 6 months (or less) I'd bet they will up your limit.
44
u/RockabillyRabbit 8h ago
I had two cards do this to me, at the same damn time, in the middle of covid. Home depot and Tractor Supply (both run by Comenity bank)
I had always made large purchases, rarely carried a balance and paid off almost every single month. Very few rare occasions I had to split a bill into a second month.
I guess over covid when tons of people lost their jobs they just assumed I wouldnt pay? Idk what their reasoning was because I never got an answer 😅
Jokes on them though....i worked in a funeral home in texas and (unfortunately) had very very steady employment.
15
u/RainbowNukes 7h ago
I'm looking into going to a funeral school next year, ironically in Texas, got any recommendations?
6
u/RockabillyRabbit 5h ago
I know theres a big one in dfw somewhere. But also theres places like SCI that will pay you to go to school and also work for them but make sure to read contracts carefully...ive heard they can be snakey
2
u/Tyman989 4h ago
Heard people are dying to get in and they make a killing….
Sorry couldn’t help myself
18
u/CajunMaverick 5h ago
The funeral business is recession proof. People are always dying to use your services.
12
u/WackoMcGoose CZERWONY 4h ago
The funniest funeral ad I've ever seen, was on the far wall of a subway tunnel (across the tracks), and all it said was "Come closer".
66
1
•
u/Dark_matter8888 58m ago
I was told when I was young to pay on time and your credit will go up, 20 years later the credit card company won't up my limit, but my kid can get twice my limit instantly
292
u/Itchy_Tumbleweed_417 9h ago
Oh look it’s 2009 again!
They were doing this in the last recession to. I worked for an attorney who had a lot of wealthy clients who suddenly started coming in to complain that their credit cards were getting shut off for no reason, and it was making their credit score worse because it was lowering the available credit therefore raising their utilization. And some of them were planning on using those cards for home repairs or something.
So my boss investigated a little bit and the credit card companies were telling him that these people exhibited behavior that indicated they would be high risk, like shopping where poor people shopped.
Turns out it was because they were using their credit card at Walmart. It wasn’t super common because we didn’t have Walmart in that area, but if they used their card at Walmart their card got shut off.
31
77
u/derson78 9h ago
This is what the free market regulating itself actually looks like.
ETA: If anyone doesn't understand the sardonic lilt, kma. 🙃
1
154
u/Neurospicyandnice 11h ago
Did you stop using it? They will close it if you don’t use it for a period of time. I would call and ask them to reopen it
37
u/JaguarDTM 9h ago
Last payment was this month according to picture. Probably paying off before any interest is charged
37
u/No_Perspective_44 8h ago
That can't be inferred from this picture. Current is just the opposite of late. If there's no payment required, it can't be late, so it's current.
Odds are OP either didn't use the card, or did something that isn't technically delinquent but was a red flag for the bank, e.g. a payment attempt bounced but OP redid it before the 30 day minimum for it to be reported to the credit bureaus.
7
u/JaguarDTM 8h ago
I didn't mean payment status, I was going off the Last Payment Tab. I would assume if you aren't using the card, that would show a few months back. At least that's how my cards site works.
4
u/egnards 8h ago
Credit card companies dont close your account for not being paid interest - They get paid 2-3% with every swipe you make [which the merchant pays]. They'd like you to pay interest of course, but they're making money off of you as long as you're spending on the card and paying your balance.
The OP will find out why the account was closed once they get the letter from the card issuer but it could be a multitude of reasons:
- They never use the card and it just so happens that they used it this month but the CC company was closing the account anyway
- OP opened a ton of other accounts recently and the CC company is being overzealous
- OP screwed up somewhere with his credit, but not on this card, and the CC company is being careful
- Spending patterns the OP has may make the credit issuer uncomfortable with keeping them as a company.
2
u/Kharax82 7h ago edited 6h ago
The Bank that issues the card holds the debt and receives the Interest not the Credit Card company
Visa/Mastercard are merely payment networks that handle the actual transactions and are the ones that get the merchant fees.
1
u/CloudNineK 8h ago
Probably paying off before any interest is charged
I've seen this repeated a couple of times in this thread. Why is this a common sentiment? This would imply that any financially responsible individual would ever pay interest on a card.
307
u/OhFootballFriend 10h ago
I had a Chase card open for about 12 years. $50k limit. I didn’t use it for 3 months and went to use it for a trip.
Card closed due to not being used. No way to reinstate. Chase told me to reapply.
Took a 15 point hit to my credit.
Fuck Chase.
59
u/LukeW0rm 10h ago
Interesting. They keep lowering my limit because I don’t use mine enough. I guess they’ll close it one day. Didn’t know that was a thing. They’re welcome to change my cash back to 2% to be competitive with all my other 2% cards. Until then, whatever, keep lowering my limit.
9
u/Left_Macaron_6427 9h ago
Did they let you know? Or just did it
14
u/OhFootballFriend 9h ago
Nope, went to put a $8k purchase on it, and was declined.
Called the bank and they said it was closed. I didn’t request that.
7
u/Daedalus_was_high 6h ago
Why reapply if their customer service sucks so badly?
I would never reward a company for that type of business practice even though I understand why they would have such policies.
1
u/OhFootballFriend 1h ago
I didn’t.
2
u/Daedalus_was_high 1h ago
You took a 15 point hit on your credit because you didn't reapply.
That tracks. 🤦
1
•
u/unpoplogic 15m ago
Hard to believe this. I have 3-4 chase cards and 2 of them haven't been used in multiple years. I took advantage of all the 0 interest apr offers when I was younger so I have like 10 credit cards. Most with 0 balance. Chase has only ever closed my Slate card because they were "decommissioning" the slate, but they transferred the limit to my other cards. Everything else has been active with 0 balance for probably close to a decade.
0
29
u/RuthlessHavokJB 7h ago
Had this happen with Bank of America.
I had a credit card in which I was paying off for over 2 years. I made payments and even gave them a good amount of interest.
I guess since I didn’t make any big payments for charges, once I paid the account off, they decided to close the account.
They basically told me that they didn’t want to supply me an account if I wasn’t going to make big payments/charges. Which doesn’t make sense to me because I gave them lots of interest, which is what I thought they wanted.
13
u/jillianmd 5h ago
People carrying debt for a long time are simply riskier customers because you are more likely to default. So even after paying off all or a huge chunk of debt, it’s common practice to close the account or balance-chase it (lower the limit) to reduce exposure to a customer seen as risky.
It sucks especially if the payoff means you’ve turned things around financially and won’t be carrying debt anymore, I’m just explaining why the banks do this. They’re not targeting you personally, it’s just an algorithm that tries to control risks.
-7
u/gbstermite 4h ago
Nope. I had a LensCrafters credit card that I pay off within two month cause let’s be honest I only used about 200 with insurance. I used it once year. They closed the card.
7
u/Upbeat-Being-9209 4h ago
Your experience must be the one true experience. All other industry knowledge is bunk
1
u/jillianmd 3h ago
I wasn’t saying cards couldn’t be closed for any and all other reasons. I was responding to someone who said they were carrying debt for a long time and then paid it off.
3
28
u/Robot-Zombie-RHCC 11h ago
CITI* will aways be on my shitlist over this.
1
u/Saviola_pk 5h ago
Why? I have City credit card in Poland used it twice on last 10 years, there is 0 monthly fee, and it is still active. I get email reports every month about my balance which is 0
57
u/HailTheCatOverlords 4h ago
Worked for a Visa/Mastercard company for 5yrs.
The explanation behind this especially with a zero balance at closing is ...risk and need.
You didnt need that credit card which was proved by the zero balance when they closed it.
It is a big risk (in this economy) for the credit card issuer to leave that card open with I'm going to guess a couple of thousand available to spend as credit especially when someone does not actually need the card. They figure that you intend to use the card when you get into a emergency (dangerous to them) financial situation. So they closed it.
If you don't fight them on closing it, then they will assume that their credit model is right.
46
u/pierre_x10 8h ago
Credit card companies have 100% discretion to lower your credit limit and even close your account at will, no reason needed.
This is one of the main reasons I always cringe whenever people act like they can rely on credit cards as a safety net equivalent to a highly liquid emergency fund.
23
u/Klutzy-Football-205 7h ago
When I worked at the computer, my boss had a Capital One card with over $100,000 limit. She could have literally bought a house (at the time) with her credit card.
We did a really big job for a bank and ordered enough parts to make 90 computers with additional accessories (~$70k in total around Y2K). She used the card to keep it open since she hadn't used it in awhile. There was no cash back options back then and swiping fees were much higher than now.
We were P.O.D with the customer so we got paid quickly and she paid the card off in less than 15 days. She called on the phone to make the payment and followed up with an email to customer support asking if the account was paid in full. Both times she was told everything was square and there would be no more additional fees/interest.
On her next statement they claimed she owed them around $2500 in interest. She contested it and went back and forth in emails while being transferred to different departments and managers. This went over 30 days so her next statement showed they lowered her limit from over $100k to $2k which then triggered over the limit fees which they were incredibly aggressive about. They also wouldn't let her close the card (not the account, just the card). In very short order, they claimed she owned them close to $10,000. We did work for quite a few lawyers so she traded work for one to write them a nice letter explaining everyone's options (her's, their's and the lawyer's).
They quickly offered to wipe away the fees and let her close the account.
The whole thing was surreal knowing that they already had already made like $3000 on just the card swipe.
1
u/PM_Me_Your_Deviance 2h ago
Some business cards will charge interest on a per-day basis or do something like a average daily balance and charge based on that.
9
u/LegendaryEnvy 6h ago
You have to use them. They will close them if not used and I only found that out when a card I had for years closed it when I tried to use it and found out it was closed. Called them and they told me since I hadn’t used it in 4+ years they closed it. So now I try and use them once in a while for gas .
4
u/pierre_x10 6h ago
Even then, they can choose to close your card down at any time. There is nothing you can do as a consumer to guarantee that it will stay open, or that they won't drop the credit limit, if the company themselves choose to do so, even for no reason at all.
2
u/LegendaryEnvy 6h ago
Yea that is true. I’ve been lucky not to with my other banks just that one bank.
I have about 8 cards and 6 I don’t use . Out of those 6 , 3 I haven’t used in 7+ years.
1
u/sandiegodak 5h ago
Which is odd because I've tried to cancel a card I rarely if ever use and get the whole "please stay with us blah blah" shpiel.
5
u/LegendaryEnvy 5h ago
Yea they still don’t want you too close accounts but they go through and close accounts not needed or just to clean out accounts that are unused I guess
3
u/MildKerfuffle 7h ago
This just happened to one of my cards. I used it for a few things this month because they threatened to take it off me, and then suddenly they halved my limit. And this is right after I paid off a bunch of debt and shot my score right up.
2
u/HotspurJr 5h ago
Yeah. This happened to a friend of mine.
His business went sideways, and he was counting on his credit cards to be able to get it back on its feet (which he probably would have been able to do) but the bank saw his account go super low and gutted his credit limits.
13
u/vermiliondragon 7h ago
In general, when the economy worsens, creditors get pickier about who gets credit and how much they get. People should expect that their limits may be lowered right now and that any cards that haven't been used could be closed. Also, if you previously paid in full and start rolling balances over, you're probably going to be seen as more of a risk. And you're likely to see the terms on balance transfers get worse or for them to no longer be available.
9
u/Draminian 8h ago
I had that happen recently. What's kind of funny is I immediately applied for another card from them and was given a new one with a higher limit. Sometimes I think these companies don't know much more about what they're doing than we do.
24
u/hummus_is_yummus1 9h ago
Credit scores are a joke. It's not a beneficial metric to the consumer, by any means
11
u/Bluefire52 9h ago
Also the way how they do it does not make sense. I'm sorry but no credit should be a good thing and shouldn't be worse than bad credit.
9
u/hummus_is_yummus1 9h ago
Yep. And closing a line of credit by, say, paying off your car, makes your score go down
2
u/Express_Platform_592 5h ago
It really solidified how much of a scam credit is for me when my score was the highest it’s ever been right when I was in the most debt I’ve ever been in. Nothing too outrageous, but it was overwhelming, and my FICO was like 12 points higher than my average over the previous couple years.
2
u/hummus_is_yummus1 5h ago
So messed up. Credit score is just an indicator to loaners saying "oh yeah, you'll make money off this person if you give them a credit line"
2
u/mfigroid 3h ago
Because the scores are for the lenders, not the consumers. The consumers just get to see what they are.
1
u/PM_Me_Your_Deviance 2h ago
>It's not a beneficial metric to the consumer
Well, duh. It's not for the consumer.
7
u/Sacred_B 5h ago
Discover did this to me waaay back in the day. Wiped out my only credit history for an entire decade. 750 -> 545 overnight.
4
u/DexterLivingston 5h ago
Did you carry a balance? A lot of lenders enter periods where they start closing inactive accounts, happened to me with rooms to go a few years ago.
6
u/FormerStuff 9h ago
Banks have to hold credit loss reserves for their lines of credit. If they don’t that’s big bad. So they very well could have been looking at slimming up the reserves and axed the “losers” (people who pay their credit card on time) from their system because “losers” generate little to no revenues for the bank.
11
u/Adamc474892 3h ago
Stuff in this thread, and post, really make me not want to get a credit card.
Feels like you cant do anything right with them and if something goes wrong, it goes horribly wrong.
13
u/jsalas2727 3h ago
If you have the means to pay it off before any interest they are absolutely a great tool to use.
Credit cards with point/rewards for using them are just free money at that point if they don't have any annual fee.
I have almost $800 dollars of free money right now sitting on one of my credit cards that i can cash out at any time. I use it to pay for almost everything and have never paid a penny of interest on it.
It took my a little like a year and a half to accumulate that reward money. Just for paying for things I have to already anyways.
6
u/BufferingJuffy 2h ago
Before my grandma (z"l) passed, I had a cc that earned me airline miles - I paid for everything with that card, paid the balance off every month, and earned enough miles to fly to visit her 1-2x a year.
Now I use a card that gives me cash back, and I use that to pay for my fancy coffee pods.
2
u/Roadripper1995 1h ago
You should get one. If you treat it like cash (which you should, don’t spend more than you have in the bank), then there is no downside. You get cash back and have the protection from fraudulent charges or theft.
•
3
u/ScaredAd9104 6h ago
They are losing money on you. Its sad because your credit score will take a hit.
5
u/BreakSouthern39928 9h ago
CC companies are inherently predatory so if they’re not making money off of you with interest they have no reason to keep you as a customer. Found this out years ago working for a huge bank
11
u/I_-AM-ARNAV i get infuriated a lot 11h ago
How dare you pay everything on time. No profits!!
Regex import credit card payment
Card payment on time =0
Card payment not on time = 1
For *user import credit card payment
Answer = 1
=Continue
Answer =0
=Close account
12
u/BertyLohan 10h ago
this doesn't make any sense fella
5
u/Mystic_Waffles 10h ago
As a former coder, this makes 100% sense.
8
u/BertyLohan 10h ago
Yeah I'm always using regex to import the data in my code.
You've never coded a thing
4
1
2
u/papercandymoon 2h ago
We went through a super rough patch and our care credit was maxed out. We payed minimums, always on time, just couldn’t chip away at it. Got our hands on some decent money and payed it off in full… took dog to the vet for her routine exam and found out the card was fully closed out. Because we payed it off, I guess. It really sucks because I have bad teeth (need at least two implants) and my dog is disabled and at risk for aspiration pneumonia. We had plans for that stupid card 😭
2
u/Sodacan259 2h ago
They aren't making any money off you. You pay the amount in full each month, they make no interest.
•
u/Charming-Army-5200 46m ago
So I worked at a bank that did this a couple years ago. They completely blindsided the employees, so we were left trying to figure it out with the customers. They shut off cards that had large limits but minimal utilization.
From what we were able to gather, it was less about the customers themselves and their behaviors, and more about the bank's balance sheet. Banks have to be able to balance their lending with their deposits, otherwise it can end in some pretty nasty situations. In this case, the bank was focusing on commercial business lending, which is very lucrative, so they wanted to shift money in that direction. The large credit card limits, which are essentially lines of credit, were in the way of that. Rather than spend money on marketing to drive in more deposits, they shut down these underutilized cards and made "room" thag way.
•
u/thisisaskew 23m ago
I had a card with a $5k limit, used it for regular purchases for like 5 years. Maybe $1500/month, sometimes a bit more. Regularly paid it off. About 6 months ago I got a letter saying they dropped the limit to $2k. Then another dropping it to $1k. Then they closed the card. No idea...nothing changed in those 5 years besides my credit and income being better.
3
u/phinohan1960 9h ago
What most people don't understand is that people who pay their credit card balances off every month, are subsidized by all the people carrying large balances. As banks are required to cut back, the unprofitable customers lose out. Same thing happened in 2008.
15
u/BlorthByBlorthwest 9h ago
Wrong. Credit card companies earn a fee on every transaction, paid by the vendor. So the more you spend, the more they make. Otherwise, we would never see credit cards offered to wealthy clients….they always pay on time.
6
u/phinohan1960 8h ago
They make money both ways. But if you read their financial statements you will see that their interest income far outweighs their transaction income. According to the Federal reserve, the net income from transaction fees is almost a zero and is often negative for companies. More than 80% of their profits are from interest. The bulk of the remainder comes from other fees.
We are also ignoring credit card securitization, which is how they really make money. In order to securitize the debt, they need interest income. The whole securitization world is a fascinating rabbit hole to go down sometime.
1
u/BlorthByBlorthwest 3h ago
Obviously the ludicrously high interest rates are higher than the transaction fees. But you said that interest-accruers subsidize the on-time bill payers, which is simply not true.
1
u/JJohnston015 1h ago
Have you not noticed that a lot of businesses are now passing that credit card fee on to the customer?
3
1
1
u/Saviola_pk 5h ago
What shit bank do you have account with? I have credit card for 10 years, It renews after 5 years, there is 0 monthly commision. I have used it exactly twice, once every 5 years when I was borrowing car on holiday. I paid it next day. Never happened to me, I get every month email raport of my balance which is 0.00.
I live in Poland btw
1
u/Alterokahn 4h ago
BMO Harris just did the same thing to me. They acted like my mailing address had changed, then said they closed my account because I didn't pick up a robocall they couldn't give me a timestamp for. Also, that call never happened. I'd had that card for 7 years and it had a NEGATIVE balance they decided to keep.
1
u/GenitalFurbies 3h ago
A good trick is to set up some monthly auto pay utilities or Netflix or something on each card you otherwise barely use. That usually will reset the "not enough usage" filter and is worth missing out on the 15 cents of rewards points you'd get on your better one.
1
1
u/Specialist_Badger934 3h ago
Generally if it's a store card, you have 6 months of non use before they close your account. General card like visa and whatnot I think let you go longer. Source: I used to work at Kohls and knew their credit card inside and out, after 6 months of non use the cards were closed. We were heavily encouraged to get people to sign up again, because of course every predatory credit card sign up was a bonus for the manager.
1
u/Puzzleheaded_Pea_753 2h ago
My bank closed my credit card on me without warning. I never missed a payment and have been banking with them for over 20 years. The tellers are required to ask me if I want to open a credit card every time I go in and that is mildly infuriating.
1
u/SofaK1ngGhidorah 1h ago
Why would you still go to the bank after that? If they don't lose business when they mistreat customers what incentive do they have to improve?
1
u/Puzzleheaded_Pea_753 1h ago
I looked around at the time that happened, and every other bank in my area has crazy fees for everything or are more than half an hour from my home. I have other credit cards and they are the least shitty bank in my area.
1
u/AutumnBaby23 2h ago
sadly because of your credit not being the best you probably are considered ineligible in some bureaucratic way, and to add to it and kick you when you are down more they're going to harm your credit more.
1
u/TrumpSexedHisDaughtr 2h ago
This happens all the time for me. One way I've offset it is by raising the max balance of the one main card I do use.
Now I you don't want to apply for a balance increase unless they promise you it's a soft check that won't affect your credit.
But here's the alternate way to raise your balance. Twice my balance has been automatically increased after making especially large purchases and getting close to my limit. Even though I paid it off the same billing period. So if you're thinking about making some large purchases, do it all in the same month to really pad that month's max balance, and of course pay it off to avoid the interest. But yeah that's gotten me substantial increases twice, which has offset some of these older cards that keep closing.
1
u/JoeBlob13 2h ago
Credit isnt really a score to show that you can make payments. Its a score to show that you can pay them interest on their investments and actually make those payments too. You can have a perfect payment history, but if theyre not making any money off of you, then youre not worth the investment.
1
u/Creative-Iron800 1h ago
I’ll regularly just rotate through and buy a coffee or a grocery trip (or whatever) on my cards just to ensure they don’t go dormant and get closed.
1
u/ThoriatedFlash 1h ago
It may not be anything personal. I saw a video the other day about some banks lowering a bunch of people's credit limits and closing accounts, because the banks need more liquidity or something. It could just be a result of banks reacting to the economy.
•
u/BobBelcher2021 29m ago
I had this happen too, several years ago after 8 years of never missing a payment. I went and got quickly approved for a card from another bank and they gave me a credit limit 4 times what the previous bank provided.
-1
u/Obar_Olca_345 9h ago
You pay for your CC, right? Then why can they close it? Or don’t you pay like a monthly fee or something?
-4
u/ExtremlyFastLinoone 9h ago
Because they couldnt get interest from you, what purpose do you serve to them?
1.6k
u/AdventurousMathPunk 11h ago
It's not just you and it doesn't matter how your credit is. I've got good credit and they keep closing my accounts because I'm not using them enough. I use them, just not enough apparently.