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

by Evan

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 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?

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Cheapskate Sandy September 28, 2009 - 3:06 pm

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.

Evan September 28, 2009 - 7:53 pm


So are you still using your CC? Are you paying the amount you charge monthly in effort to be come debt free?

DebT July 16, 2010 - 1:40 pm

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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