How does closing a gas card account hurt credit score?

Submitted by chefgirl5 on Tue, 11/25/2008 - 12:37
Forums

I received a letter from Chase stating that they are closing my account due to buying too much gas and not using it for household use? I had already decided to stop using this card when I stopped receiving the rebate back due to reaching a credit limit of $270 per year which I didn't know about. Will closing a credit card affect my credit score? We have had this card for several years and used it on and off but my husband works on several different job locations 1-2 hrs away from home and with the cost of gas it had increased use this year. I am a bit peeved at Chase, we have our mortgage and another card through them. I just want to know if it will look bad on our credit that they closed the account so I can call them and get this settled and would it look better if i close a credit card account?
I have debts on some of my cards and I want to pay them off. How can I go for credit card consolidation by myself?

I have seen this happen to a couple people recently. I would imagine the way they list it on your credit report is going to determine how much it hurts your credit. I would have to think it would have some effect on it though. Lets see what the others have to say.

Tue, 11/25/2008 - 21:08 Permalink

Hi chefgirl5
Yes, if Chase close credit card account there may be a negative impact on your credit score because as per FICO credit scoring model, repayment history contributes 35% in your score and you will lose the entire repayment history if the card is closed. However, if they have already closed your credit card and if it gets reflected as "closed" in your credit report, you can ask the credit bureaus to change the status of the listing to "closed by grantor". Do you have any idea about what affects credit score?

Wed, 11/26/2008 - 13:36 Permalink

I agree with Mary on this point that you should ask the credit bureaus to change the status of the listing form "closed" to "closed by grantor". This will also lower your credit score but not as much as if you yourself close credit card account. Moreover, you should immediately start spending on other credit cards to build up a good credit history so as to offset the reduction in score due to closure of chase card.

Tue, 12/02/2008 - 07:51 Permalink

closing a credit card account - particularly and older, more established one - can definitely hurt your score! The age of your open accounts is a major factor in determining your creditworthiness.

Cut up the card if you need to, or don't carry it with you all the time, but whatever you do, DON'T CLOSE IT.

If you already have, do request that they report the card as "closed by consumer". It seems like a minor detail, but it does matter.

Tue, 12/02/2008 - 11:58 Permalink

Credit score depends heavily on the length of the credit history,credit limit and the repayment history, the former contributing 15% and the later 35% in your credit score and therefore an old card contributes 50% in your credit score. So as soon as you close an old credit card, both the length of the credit history and the repayment history is lost and so your credit score falls whether the company itself closes the account or you yourself close credit card account due to your inability to maintain such account for its annual charges. So as far as possible try not to close such old accounts.

Wed, 12/03/2008 - 06:08 Permalink

Yes, Carol is right, but what I think is that if you want to close your existing credit card due to high interest rates, you should not do it, instead, you can transfer the outstanding debt with an existing credit card to a balance transfer zero APR credit card which comes with low interest rates. However, you may not use the existing credit card and keep it in safe custody and use the new card which comes with low interest rates as compared to the old card. Now you should use this new card and build up a good credit history so that if the credit card company close credit card account due to non usage, your credit score will not affect much.

Wed, 12/03/2008 - 06:45 Permalink
vickie (not verified)

Received a letter that chase is closing a credit card account that was opened in 2002. It was in good standing always paid on time for the last 3 years. late once in 2005 and before that 2003 a couple of times. I paid the full balance due in oct because the apr was way to high. The reason were ..listed as three diferent possiblities. current or history of servere past due or public record item (not the case) Toatal available credit to low ( not the case , total credit was avalible) Too few open accounts with time on file greater than 24 months. ( this could be it , only had that charge card open and 2 car loans and authorized user on american express) My credit score is 781 as on now. After this closing I'm afraid it will be greatly affected. I checked my credit report with the burau they referrred too and all seems well. I don't understand. Any advice out there

Sun, 12/28/2008 - 07:17 Permalink

I don't have a Chase CC or Gas Card. ....but, what I've been reading is people are ahving the same thing happen. The OP say they have kept up with the payments, never late, etc. Seems like there is a 'trend' going on with Chase. I think everybody should know what affects credit score.

Sun, 12/28/2008 - 15:33 Permalink

I use to have a mortgage loan with Chase mahattan and I will say they were not too bad. I stay away from gas cards because they are too easy to use and if you think about the high gas prices we were experiencing over the summer and then consider the interest you would pay on the card it would really add to those high gas prices.
Vickie, I have been hearing of companies closing cards once people pay off their accounts. This happened to us recently when we paid one off and when we went to put a small item on it they informed us the account had been closed. Sometimes if you get a loan to pay off an account the bank will send along paperwork also asking that the account be closed. Not sure if this is oyur case but it may be.

Sun, 12/28/2008 - 21:48 Permalink

Since it is a very old credit card account, it will greatly affect your credit score because once the account is closed, both your credit history as well as the length of the credit history will be lost. Now most credit card companies are closing credit card account which they have already issued due to the economic crisis in the fear that the credit card holders may not be able to repay back in the present state of financial crisis. Now if they have already closed down your credit card account, all you can do is to ask the credit bureaus to change the status of the listing to "closed by grantor".

Mon, 12/29/2008 - 09:32 Permalink

Yes, I agree with Justin. If you find your credit card closed in your credit report, all you need to do is to send a letter to the bureaus asking them to change it to "closed by grantor". This may help you to prevent lowering your credit score. Since you also have some already open accounts like your car loan on which you are making regular payments, your credit score will not affect much with closing of your chase account.

Mon, 12/29/2008 - 09:49 Permalink
GS (not verified)

Chase just close credit card account of mine without a balance. Their excuse that I have too much credit! Meantime on a separate business account I have under my business we got an increase of 8% to our interest rate forcing us to actually close the account ourselves. Something is up with these guys. I think they are trying to cut down liabilities/risk (by closing accounts with no balance) and increase profits by increasing rates on those without a choice. Part of it is the economic climate, part the potential of consumer favorable legislation/regulation, part of it Chase being a credit card predator. The fact that they are the "usual" suspect in most credit card related issued on the Internet, is not accidental.

And one note on my personal experience with their "customer service" (if one could call it that), they are for the birds. The reps that answer the phone cannot tell you more that what the automated system or online service will give you and anything related to closure or interest rate increases has to be addressed by some special department open M-F 9-5 (now you have something to do at work...). My personal experience was that I was dealing with the Sopranos in disguise.

Sat, 01/31/2009 - 18:25 Permalink
Debbie (not verified)

On the advice of my tax adviser, I made the mistake of calling my credit card co. and requesting my interest rate be lowered. Not only did they not lower it, they closed my account. I spent for days trying to determine what went wrong, and have received no sufficient reply. I have had the cards (2 accounts) since 2006 and 2007. I am sick over the probability that my credit score will fall. On both cards I have had an excellent repayment history. I will not be using this company ever again.

Mon, 02/02/2009 - 22:05 Permalink

You should now pull out your credit report and check whether the credit card company has reported as closed. If it is reported as closed, send a letter to the bureaus asking them to change the status to "closed by grantor". Most of the credit card companies are either closing credit card account or are lowering the credit limit on cards after the sub-prime crisis. If your score has not come down yet, you can apply for a new credit card right now.

Tue, 02/03/2009 - 09:46 Permalink

Yes, my account was closed by chase june 25, 2009. For almost same reasons I have read here. I have had this account since 2002 and paid religiously on time and most time in full . So if they close the account. Why would anyone want to pay what due? You can go to "www.creditkarma.com" sponsor by or partnered with TransUnion . Follow process and it will get your credit score and tell you on credit simulator what if you dont pay.. I mean I have 691 and I know I owe chase but it makes me mad that they just closed my account.... I wouldnt bother me to go down to 685 for their stupidity. Ofcourse I need to consider it will be there for 7yrs.. toss up..

Fri, 07/03/2009 - 21:16 Permalink
lauren (not verified)

CHASE is THE worst bank in the country. They do not want "little" accounts. When they took over WAMU it was a nightmare. They have just been waiting to 'FORCE' out all of WAMU's old customers. They only pander to the very, very wealthy and that is the way they want it.
I hope they go out of business. They closed my account - no warning - nothing AND SENT ME A NEW CARD THE SAME DAY!!! My account was ALWAYS paid on time, I had a very long history with Wamu. As soon as Chase took over I paid the account in FULL every month and barely used it. They immediately raised my interest rate to 31%!!! And my fico score is way up there.
YOU SHOULD BOYCOTT CHASE. THEY ARE DISPICABLE AND SHOULD NOT BE IN BUSINESS. IT'S DISGUSTING WHAT THEY ARE DOING. You can hear these stories from tons of people.
Consumers - we the people - are the only ones who have the power to STOP DOING BUSINESS WITH THEM AND SPREAD THE WORD.

Thu, 07/16/2009 - 02:28 Permalink

Hi

Why would anyone want to pay what due?

I am afraid lauren, if you owe the money you will have to pay it. I know this is really frustrating, but the fact s you do owe them the money. You could try and talk to the authority about working out a feasible payment option that is comfortable for you (if they agree at all i.e.)

Thu, 07/16/2009 - 11:53 Permalink
Bess (not verified)

They sent me a letter (supposedly) I haven't received yet. I went to use my card today and it was denied. I have two cards with chase and the other was denied. Had close to 1200 avail on both cards and when I called them today they said your account is closed. I FREAKED. I'm wondering why and thinking someone got my info..no they said I don't have enough avail balance on other cards. I only have one other card and it's bal is low. I ran a credit report today and it says the accounts open. webside where i pay the bills EVERY MONTH MORE THAN MINUMUM and it still says open. but it's not. they are creeps! Can't believe they have the right to close it but apparently they do. They blaimed it on Experian saying they received notice from them about my rating. There is no listing of that inquiry from them or anyone else in the last 2 yrs. I didn't realize Experian weould send them that kind of info. Had both cards since 2007 and always paid on-time, early and never minimum. I will never use chase again in my lifetime and will tell everyone I know what creeps they are. if this screws my credit history I'm really going to be p.od!

Sun, 07/19/2009 - 01:30 Permalink

I know this thread is kinda old , but I wanted to add something.

I recently closed one one my credit card account. That account was one of my oldest accounts I had ( but closed it due to an anual fee).
It did not have an impact on my credit score, whatsoever.

But I also have (now) 5 cards. If you only have two...it would be a different story.

I thought it made a difference when THEY close your account and not you. Or does that not matter at all who closes it?

Sun, 07/19/2009 - 02:23 Permalink
gmoney (not verified)

thanks guys i was thinking about some of these things myself all of you really helped out

Tue, 07/21/2009 - 01:19 Permalink

Well gmoney

If you can get a loan with a lower rate of interest and one that covers your existing debts, you could apply for a loan (if you qualify). This way you can also pay off your debts in an affordable manner. IMO, this is a good idea.

Tue, 07/21/2009 - 12:50 Permalink
LittleBird75 (not verified)

In the last two weeks I've had both Chase and Citybank close one account each I had with them. Both accounts are over 5 years old and I've never been late on these or any of my other accounts. I've had both accounts paid down to zero at various times and always pay more than the minimum balance.

The reasons cited were things like

"not paying off the balance soon enough" - I didn't know that was a requirement

and balances too high - which they have been high with the economy and a few tight spots where I had to use credit.

At first I was very upset - but I've heard they are doing this across the board. I'm not sure what the advantage to the bank is since I still owe the money and the terms all stay the same. I'm anxious to see how this impacts my credit. Each one states it will show "closed by credit grantor".

This thread isn't too helpful so far. If anyone has specific examples of changes to their credit based on similar situations, I would love to hear it.

Tue, 07/21/2009 - 16:03 Permalink

Already told you that it depends on how many credit cards you have. You need to provide more information.

Tue, 07/21/2009 - 16:12 Permalink
Joe (not verified)

I called Chase today to update my new address, only to find my account closed yesterday. They told me 3 possible reasons for the closing the account:
1) Total Credit Line was too low. (not the case)
2) History of severe past due. (not the case as I was NEVER late)
3) Too few open accounts with time on file. (not too sure what is meant here.
I checked my credit report, everything looks fine. Is this a common trend with Chase? And what are the odds of Chase opening the account again? Or should I just contact the credit bureaus and request them to have it show closed by grantor?

Wed, 07/22/2009 - 16:24 Permalink

It will show "closed". Just be patient. It can take a while ( whenever your next billing cycle starts, for instance).

Wed, 07/22/2009 - 18:52 Permalink
Sonya (not verified)

`Citibank is raising int rate from 16 to 30%. I can opt out of it and pay off at 16 but the account will change-- threre is $10,000 on it. What should I do?

Wed, 07/29/2009 - 04:03 Permalink
Lynda (not verified)

I have just had the same thing happen with my Chase Visa, I have had it for probably 20 years, always in good standing. Always paid off. They sent me the same 3 reasons for closing it, that the others have stated, also not true. Is there any recourse to protect my credit rating from them closing an account on me that I was in good standing with. Not to mention it had the highest credit limit of all my cards. Which are all in good standing too.

Sat, 08/01/2009 - 18:29 Permalink
Lynda (not verified)

From what I'm reading here it would appear Chase is in trouble and hurting consumers credit reports by unjustly closing their accounts. I wouldn't be surprised to see a class action lawsuit come out of it.

Sat, 08/01/2009 - 18:33 Permalink
Ben (not verified)

Chase sucks. They always have and always will. My credit card account was closed recently, and received their "Dear John" letter the other day. I had that account for nearly 4 years, was never late on payments and had a very good credit to debt ratio. Seems like the douchebags at corporate weren't satisfied enough with the bailout money they spent on themselves through bonuses, so they are literally "Chase" away long-time account-holders. Thanks Chase for ruining my credit score! I hope your company gets slaughtered like the squealing pig it is.

Sat, 08/01/2009 - 19:21 Permalink
End war in Omaha (not verified)

I don't care about my credit score because I don't want to have a credit card. Any time you give money to people just because they have money, credit companies, gambling organizations, etc., you are creating a divide. Giving yourself less and giving them more.

They closed my account without any justification and now it affects my credit score. The decision was never based on my credit worthiness. Plus, I got two credit cards filled beyond $10,000 without ever earning that amount in a year. It sounds like a stupid system.

They give loans because they have money to give, not based on your score. If you don't get a loan, it's because they don't have money. The score is just a deception.

Now banks are getting their regulation overhauled to prevent these kind of stupidity.

Tue, 08/04/2009 - 21:52 Permalink
renagade (not verified)

Those Nasty Ooh ...... they did the same thing to me. I pay my bill every month the full amount, never late had account since 2007, once Chase took over, My account was closed because they claim too many inquiries for credit and too low blance,Hey, I did not know that I could telephone the credit bureau and be put on the opt- out list for 5 years from all pre approval credit cards and junk.... But I feel something needs to be done about these bo zo's, I can't stand this Bank, It' treats it's employees crap

Wed, 08/05/2009 - 17:21 Permalink
Anonymous (not verified)

Life is so much more than your credit score! what about love and friendship and relationships people ? I mean credit is out of control anyway! if you cant afford it you shouldnt buy it right? I got myself into trouble with too many credit cards and now i have poor credit. I use to lie awake at night and get sick everyday thinking of it. in reality how many years did i take off my life stressing over it! you are who you are not what your credit is!

Wed, 10/07/2009 - 21:48 Permalink
defcon (not verified)

I have old credit cards accounts that i closed long time ago they are in good standing should i remove them?

Wed, 10/28/2009 - 23:36 Permalink
Desiree (not verified)

I have 2 cards with chase. They recently closed one I had for only 7 months, but never used. They stated because I hadnt used it I didnt need it.
My other cards ares are in good standing. Paid on time and more than what they ask for. One in fact, my capitol one, is paid off entirely.
Will this recent closure hurt my FICO.

Wed, 11/04/2009 - 22:45 Permalink

HI defcon,

No you shouldn't remove them. That is what determines your credit history. As long as they are in good standing why remove them. The longer they are on there the better your score will be.

Wed, 11/04/2009 - 23:49 Permalink
yiw (not verified)

Last Oct (10/2008), all my 4 Chase credit card accounts, plus the 2 accounts of my spouse, have been closed (quoted "too many inquiries in last 6 month" (I have 6 inquires and my spouse only has 3)and "too short credit history ( I have 8-years and my spouse has 10-year history)" while I believe the real hidden reason is our usage pattern -- never late in payment and always pay in full, try using different cards for different rewards (such as gas card for gas, and everyday card for daily shopping) so that Chase can't earn money from us easily. I called and tried to get them at least reopen a couple of frequently used card (those used on daily basis), but was rejected firmly. Alright, I took it. Now, more than one year later, I tried to apply for another Chase card (I have no chase application at all during 2009, and only 2 inquiries in total on my credit profile for the entire past year). However, I got denied with the reason of "the applicant has bad bank relationship since this customer' accounts have been closed by the bank before". I tried to explain to them even the past "forced closing" is kind of unfair to me, but I am told this is the policy and can't be changed. When I ask "does that mean I can't apply for any chase card at all in the future?", the representative simply replied with "You are always welcomed to apply but the policy said we can't approve the application for any customer with bad banking relationship"... This does not make sense to me.. we are innocent to start with, but not only our accounts have been unfairly closed by Chase, but we are put into a lifetime jail under a hidden blacklist customer lists denied for any future application, and the more we are “welcomed” to apply, the more lost we will suffer since we give them chance to pull out our credit (and this increase the inquiry hit) with a pre-known result of denial. Can we complain? And where to?

Thanks

Fri, 11/20/2009 - 00:49 Permalink
Billy Bob (not verified)

I've closed my old credit card accounts before and it didn't effect my credit score. All of the history is still on your report, even if the account is closed.

Thu, 12/30/2010 - 21:28 Permalink

'LIU'..what happened with Chase Bank? Why did they close your account. Depending on the reason WHY they closed tyour account with them, can hurt your credit, yes.

Tue, 01/10/2012 - 18:02 Permalink
susan more (not verified)

If I pay my crdit cards on time does that help my credit number?

Thu, 03/08/2012 - 23:25 Permalink
crorkz matz (not verified)

Jmm18p I really liked your article.Much thanks again. Awesome.

Tue, 08/05/2014 - 09:44 Permalink