Fight Back Against Credit Card Companies Cancelling Your Credit Card and Hurting your Credit Score

Fight Back Against Credit Card Companies Cancelling Your Credit Card and Hurting your Credit Score

A couple months ago I received a notice from a credit card which was previously eradicated from my modified debt snowball.  I had dual thoughts, “hahahaha, it doesn’t matter if you jack up my interest rate, I paid all my credit cards off already, tough guy” and “You better not be trying to get a way with annual fee, because I am not having that.”

When I opened the Letter, it informed me that my account was closed due to inactivity.  Of course there is no activity, I am attempting to get rid of all CC activity for now.  Regardless of how much sense I thought I was making, they weren’t hearing it, and so, my 5 year old credit card with $5,000 limit was now gone.

Why Did I care about a Credit Card Being Canceled If I wasn’t Using it? How is your Credit Score Calculated?

In his Article, “Everything you Need to Know about your FICO Score, staff about.com writer,  Jeremey Vohwinkle (who also runs a great blog, Generation X Finance) highlights which variables and to what extent those variables go into making up your FICO score:

  • Payment History – 35%
  • Total Amounts Owed – 30%
  • Length of Credit History – 15%
  • New Credit – 10%
  • Type of Credit in Use – 10%

So a 5 year card, which was on the longer side in my credit history dings variable #3.  Also, since “total amounts owed” is basically a credit utilization ratio, and while I am credit card free, I am not debt free (mortgage, auto, and education debts).  A such, you should care if a credit card company cancels your credit card!

How to Avoid a Credit Card Company from Cancelling your Outstanding Credit Cards

Being annoyed about the situation, I decided to come up with an idea.  While I am sure I am not first with this idea, I think it is particularly bad ass for those of us that are done using credit cards.  I bought a business card holder…yup an ordinary business card holder from Staples.  Credit Card Holder

Then I put all my credit cards into it and made a note of the last purchase, if I didn’t have a last purchase within 30 days, I created one, by simply paying some amount certain on my Cell phone (similar to what I do with semi-used gift cards)

Credit Card Purchase Note

Then I paid off the Credit Card 2 days later.

Anyone have a different system?  Or Use this system?

5 Responses to Fight Back Against Credit Card Companies Cancelling Your Credit Card and Hurting your Credit Score

  1. I do that now with my B of A but I find the SMALLEST thing I can possibly charge, say, gas and that’s it. I accrue points when I pay my bills with my debit cards so it’s more valuable for me to use my debit card anyway.

  2. The same thing happened to me. They cancelled some of my cards that I hadn’t used in a while. But the worst was my HELOC reducing my credit line from $41k to $10k.

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