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I have a friend at work who got a letter stating that since she has not used her sears card in a long time, never been late, no balance, that they Sears/Citi bank decided to close it. They not only did that but now her credit report has a mark on it for that. Is this normal, legal and what can she do? She wants her card back and the mark removed from her credit report. Any advise or similar stories?

Thanks,
Luke

Posted: Tue Jun 10, 2008 2:04 pm Subject:

Unfortunately the creditors have the right to do that. Sad

She can call sears / citi up and try to apply for another card with them if he or she wishes.

Posted: Tue Jun 10, 2008 2:06 pm Subject: reply

mobile is right,every credit card has that
clause.where they can suspend or revoke accounts
without notice.

Posted: Tue Jun 10, 2008 2:07 pm Subject:

wow, but what about the report on the credit files, Im not sure if that is fair or not, what do you think?

Posted: Tue Jun 10, 2008 2:09 pm Subject:

Believe me you are preaching to the quire. I totally agree . Its not fair , but it is legal and there is no way around it reporting on the their credit report as a closed account. Sad

Posted: Tue Jun 10, 2008 2:15 pm Subject:

So a closed account is better than an write off, etc and since they did it and not here maybe it is not as bad as it sounds. Still her Fico scores suffers. I find it sad that if you pay your bill on time, a long customer and you decided to pull back for some time, then they cut you off. Maybe she is better for it.

Luke

Posted: Tue Jun 10, 2008 3:31 pm Subject:

I was hoping to tell her better news tommorow, but maybe she should just leave it and get her 3 credit reports in a few weeks to see what is really on there and take it from there. What do you all think?

luke

Posted: Tue Jun 10, 2008 3:35 pm Subject:

Sounds good. Trust me she shouldn`t miss it. Sears charges around a 21% apr anyways.

Posted: Tue Jun 10, 2008 3:39 pm Subject:

Very true mobile, and they have gotten in so much trouble for illegal services such as tires, etc in the last few years they are only a shell of what they use to be anyway.

Posted: Wed Jun 11, 2008 5:01 am Subject:

The fact that the credit card is closed, of itself, isn't affecting her credit score. What happens though, is that her total available credit went down when that account was closed, and so now there is a higher percentage of current-balance-to-available balance among all her open accounts. -- That percentage going up is what may be dropping her credit score, especially if it went up over 35%.

For example (and just to make this easy), suppose she only had two credit cards: 1) $1000 limit with Chase that had an $800 balance; and $5000 limit with Sears that had $0 balance. Her total available would be $6000, where total balances are $800. That makes her debt percentage (800/6000) = 13%, which is a safe number for the credit score.

When Sears closed the card, the Total Available became $1000, the balance stayed the same at $800; the new percentage (800/1000) = 80%, which is a very bad number for the credit score.

The fill the gap and make the available balance what it used to be, tell her to open up another credit card that had the same credit limit as Sears did (or she can apply at Sears again...).

Special comments like "account closed by consumer" or "account closed by credit grantor" DO NOT factor into the score. That's all they are -- just comments. If they account has a satisfactory status, then the only thing affecting the score is that the total available went down.

Posted: Wed Jun 11, 2008 6:26 am Subject:

Almost every credit card issuer has the right to close due to inactivity. Use your cards at least once every three months to avoid this.The person involved may have a chance to phone creditor and reopen account so they can keep the account with the current age.

Posted: Wed Jun 11, 2008 7:54 am Subject:

And that is another reason not to get a charge card. Smile

Posted: Wed Jun 11, 2008 10:21 am Subject:

I have had my Sears card for over 10 years, use it every few months, never been late, never been over. My credit isn't great but it isn't terrible, my bad habit has been to keep my cards high (which I am working on!) A few years ago they reduced my credit amount from 500 down to 250 because of that. I've never understoon that .... they are making money off of me by keeping a balance on a card, I've never been late etc, and they reduce my credit line? I HARDLY use the card now, and when I do, I pay it all off the next month, so now they get no interest from me at all.

Posted: Wed Jun 11, 2008 1:49 pm Subject:

Thanks everyone for your advise, etc. I will pass this on to my friend.

Thanks

Guest · Posted: Wed Jun 11, 2008 10:02 pm Subject:

I know someone who had a $8,500 limit on citi finance backed card and just got letter that credit line reduced to $5,000 because they reviewed his credit again and says he has too much credit(no late payments and is nowhere near limit)these companies are tightening up the purse strings on what is not profitable or is too risky for them and even though I disagree with many of their tactics I also know that they are just trying to do all they can to survive and maintain profits in todays ecomony Very Happy

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