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Smart Money Needs Your Help!
By JLP | May 6, 2008
I got the following email from Lisa over at Smart Money magazine:
Hi JLP,
I need your help again. I’m working on a story about credit card companies closing consumers’ inactive accounts (usually without warning). Can you post a message on your site like this:
Has anyone gotten a notice from their credit card company saying an inactive card was closed? Which company was it and how long did you have the card for?
Thank you.
Best,
Lisa
lscherzer – at – smartmoney.com
I have never had this happen to me? How about you?
If you have experienced the above situation and wouldn’t mind talking with Lisa, you can either leave a comment below or send Lisa an email (lscherzer – at – smartmoney.com).
Topics: Credit Cards | 18 Comments »
May 6th, 2008 at 10:22 am
We had ours closed for inactivity by Bank of America. BofA stated that they will close if there is no activity for 6 months. They didn’t even warn us. The way we found out was when we tried logging into our account but could not, receiving an error message that there was no valid account associated with the userid. We had the card for 5 years. In Oct 2006, we identified a fraudulent charge, so BofA issued a new card. BofA suggested we not use the card until the issue was resolved, because every month I saw that both the new card and the old card had not been fixed due to the fraudulent charge. In fact, after the old card finally became zero balanced three months afterwards, BofA still had a credit amount on the new card to offset the fraudulent charge amount. It actually took me another two months to get BofA to take back the credit on the new card. We did not want to use the new card until all the issues stemming from the fraudulent charge was resolved, which BofA stated from the beginning that it could take at least 6 months.
After I spent considerable amount of time and effort to get BofA to take back the credit amount they put on the new card (I didn’t ever think it would be so difficult for a cc company to take their money back), they closed the account the next month as I wrote above. Here’s the real catcher, despite having the account for 5 years, paying off in full every month and not being late, etc, being told not to use the card until the fraud charges were cleared, instead of just reopening the account, we had to essentially reapply for the credit card and the credit limit. This of course required BofA to do a hard credit check. They eventually reopened the account with the same credit limit, and from my newest credit report the age of the account remained the same.
normally, i’ve been informed by other credit card companies that if you close your account, you can reopen it within 6mo-12mo of closure without any issues or procedures than to simply call them up to reactivate the account.
although I have since moved all our money and accounts from BofA because of this and other incidents, we still maintain this credit card account because it is my wife’s oldest account and has a substantial credit limit. The only problem is we have to actively manage the account, in order to prevent it being closed again without being notified.
May 6th, 2008 at 11:15 am
We had this happen just last week with a Chase card. We just got a letter in the mail that said our account was close due to, and it listed a generic response that said: “Bankcard is near or exceeding credit limit.”
Which was interesting, because the card had a 0 balance, and had been paid off and not used in nearly a year. So, I don’t know if it was a mistake and it didn’t say the reason was inactive or not, but that is the only reason I can think of.
I did pull our credit reports just to make sure there wasn’t some other red flag that may have caused it, but it was all fine. I also didn’t bother to call Chase and get to the bottom of it because it was just a promotional card we used a few years ago to get 15% off our new TV purchase. The limit was small and the length of credit history for that account won’t really matter in terms of the credit score, so I let it go.
May 6th, 2008 at 11:25 am
My corporate AmEx was closed once for inactivity – not sure if they still do it, this was years ago.
This was pretty annoying because it was a corporate card that I am not supposed to use except for business trips even if I am the one who gets the bill first. Since I don’t go on business trips that often, only occasionally, I don’t use the card for long stretches of time. So this one time, I was making a reservation for a business trip using my corporate card, and it didn’t work. I call AmEx and they say it was closed for inactivity. There had been no letter, or anything. It had been inactive for three years or so when it happened. To make matters worse, this was a last minute trip, so I really needed the card ASAP: I could use my own, but with corporate it’s more convenient since our travel reimbursement application can get charges directly from it – makes doing expense account simpler. They did re-activate it quickly enough, in all fairness. I don’t remember if they sent me a new one or just reactivated that one, but I got it on time. I think they gave me a new one, but they also gave me number information over the phone, so I could use it for my travel reservations – which were done through their agency, anyway.
It’s been a few years after my last business trip, so I have no clue if my current one is still active.
Interestingly, I also have personal AmEx, and I hadn’t used it for a while, and they’ve never closed it. Maybe because it wasn’t activated until recently, but when I decided to activate it, it went fine.
It didn’t happen with any of my personal cards. in fact, I have a couple of store cards that I wouldn’t mind if they closed – I’ve never used them, only got to get the discount, just never got around to closing.
May 6th, 2008 at 11:52 am
I had an HSBC credit card account closed on me with no warning after being open (and never used) for a little over one year. It was a rewards card that they no longer offered to new customers with 5% on everyday purchases (gas, groceries, drugstores). I imagine they were anxious to get that particular account closed due to its generous reward structure.
When I called to ask if it can be reopened, I was informed that it was not possible. I also was given no response as to why no warning was given. This happened during the fall of 2007.
May 6th, 2008 at 12:23 pm
I opened a credit card account with capital one roughly seven years ago. Yesterday I read on the consumerist that capital one was closing inactive accounts. When I got home I found a letter stating that they had closed my account due to inactivity.
May 6th, 2008 at 3:14 pm
My experience has been the opposite. My wife and I have gotten credit card accounts that we have never used, or haven’t used in several years, but they keep sending us replacement cards and letters trying to cajole us into using the cards. We have long since shredded the plastic and wish they would just close the account, but they don’t.
May 6th, 2008 at 3:22 pm
I also received a letter from Capital One closing my inactive accounts yesterday. It said something about 36 months of inactivity. I don’t mind (other than this card being one of my oldest cards) because Capital One is horrible.
May 6th, 2008 at 3:49 pm
@Tim – That’s bizarre that Bank of America said that they close accounts after 6 months of inactivity. I have a card from them that I hadn’t used it for 3 years (until last month), and I had no problems using it last month and they’ve never said a word about canceling it.
May 6th, 2008 at 9:11 pm
Amy, yes it was odd, since 6 months is pretty short and I would assume 1 year would trigger. Do not know exactly why the account was closed without warning, it could have been that the card was the replacement card for the one BofA closed due to fraudulent charges, so BofA may have thought that since it was a brand new card and never been used, that they would close it. it could have been retribution since we were threatening to close all of our accounts over several things BofA did (i.e. not answering our emails concerning our accounts, not giving us promo cash although we completely fulfilled the requirements, etc). I can’t prove retribution, but it seemed odd to us that after our barrage of complaints the card was closed, despite the complaints not revolving around the credit card. So, my guess is that since they issued a new card number, and it hadn’t been used since it was issued, then they considered it an inactive account and closed it. bottom line is that they closed the account, without warning after 6 months of inactivity.
May 6th, 2008 at 10:27 pm
I had an HSBC card closed after about 6 months of inactivity – after I paid off a credit transfer balance.
May 25th, 2008 at 6:15 pm
Never. I have one card from Providian (now Washington Mutual) that I haven’t used in at least 5 years, but I keep it because they provide me with a current credit score from TransUnion. So I can check my score as often as I want at no charge. I hope the account doesn’t get closed!!
June 1st, 2008 at 11:58 am
I also had a Capital One card closed this week. I probably haven’t used it in nearly 2 years. It is my oldest credit account, so it will likely affect my score, but I’m not going to be shopping for a house or anything for at least another year, so I’m not terribly worried about it. It is weird though, because not even 6 months ago they sent me a new card.
July 10th, 2008 at 10:32 pm
This month I received a letter saying that my HSBC card (GM Card) was being closed due to inactivity. I just called them to tell them that they didn’t even try to call me to even ask me if still wanted to keep the card. 5 mintures into the conversation they told me that they would reactivate my card. Well at that point I told them that I didn’t want the card because I rarely used it. Anyhow, I also found out that my Best Buy (I think from HSBC too) Cancelled my card due to inactivity…thats a bummer! I dont shop that much at best buy but when I do….I do purchase bid ticket items which I was planning to do this month. Cslled them up and was hoping that they would suggest reactivating it but they didnt….they even told me that they didnt have my information on their system…. I would have to go to the store and reapply…… This is really annoying!
August 26th, 2008 at 11:30 am
I just received a letter from HBSC this week saying my account is closed due to inactivity. I carried a moderate balance on it for at least a couple of years and used it as recently as January.
I’ve contacted them in the past, before a period where I would be using my credit cards to see if they would at least match the rate of my lowest card, they declined to be competitive.
Since Washington Mutual was offering a lower APR and a good transfer rate, I paid off the HSBC card 6 months ago. Every other card I have has offered me an increase in my limit when they’ve been paid off – I heard nothing from HSBC until I was notified my account was closed.
I’m certainly not impressed by the way they do business – maybe they’re in trouble?
September 14th, 2008 at 4:22 pm
This is a letter I just sent to HSBC: “I am VERY angry that you would just send me a computerized letter saying that you have suddenly just closed my credit card account due to inactivity! I have always been a very good customer with a very good credit rating. I have NEVER missed a single payment at any time with you. I have NEVER been late with a single payment to you. I usually doubled my the minimum payment due each time I made a payment to your company. The reason for the my recent inactivity is that I had simply consolidated my monthly credit card bills to a lower interest rate credit card and paid off my entire balance with you. I thought this is supposed to be a GOOD thing as far as a person’s credit is concerned! I had hoped to keep your card for emergencies and for any future needs. By closing my account in such a way, you have negatively affected my credit rating and me punished me for being a responsible customer. HOW DARE YOU! I will NOT sit by and allow this to happen. I am VERY protective of my credit rating and will NOT allow you to negatively affect it after I have given you my business and was a decent and loyal customer. Your customer service supervisor sounded like a computer and was completely unwilling and supposedly unable to help me. After doing some initial research, I see a large number of complaints by other people online pertaining to this same issue. I intend to inform EVERY news agency, My congress person and any other agency or person I can think of to see that this NEVER happens to another person ever again. I intend to create a
substantial web presence to address this issue and to create a forum in order to start a petition to be sent to ALL of the above. I am not only very insulted by your actions, but YOU should be VERY concerned as a business that you now have a very large amount of angry and insulted former customers. Your supposed computerized policies will most definitely lead to a loss of business from many people with excellent credit ratings. I personally will NEVER use ANY HSBC service EVER again. I will also see to it that EVERYONE is made aware of this ridiculous policy and that your already unstable company loses every single remaining customer! It is time that companies like yours stop leaving every action to a computer and put real human beings back into the machine! At the very least you should have sent out a warning letter that a person’s account was in jeapordy of being closed if not used within a reasonable amount of time. Youhave not heard the end of this. I promise you!”
September 15th, 2008 at 11:58 am
HSBC just hit me too. I have a fine credit history and they just closed me with the “due to inactivity” form letter.
Now my credit rating will take a hit from the loss of credit and that it was closed by the bank.
This ia rotten thing to do to customers and I hope they’re held accountable for their poor behavior.
September 30th, 2008 at 12:42 pm
I received a letter from HSBC cancelling my credit card due to inactivity. I didn’t received any warning. This is so bad. Definitely I will send them a letter like Dylan Taylor did.
January 10th, 2009 at 11:49 am
is the creditor required by law to notify you when they close an account? i just reviewed my credit report and two creditors closed my account and i was never notified. I had no idea they weren’t open anymore. one of them i used in october. No issues (payments late etc… in my history with them). does anyone know?