Banks Canceling Unused Credit Cards

By admin

If you have a credit card that you haven’t used in a couple years, expect to receive a letter from the bank abruptly announcing the cancellation of your account. Especially if it is a no annual fee account. Even if you have had the account for twenty years! This is a by-product of the current credit crunch, where banks are finding it necessary to cut costs in every nook and cranny.

If you have a credit card that you don’t use and do not pay an annual fee on, maintaining that account is a cost to the bank which brings back no revenue. They are taking a closer look at things these days. Once they get a feel that you are not one of the suckers who enslaves themselves for life to living on credit, they are going to cut you out of their balance sheet.

I received three of these notices over the last six weeks or so. Two from Chase and one from Discover. One of the Chase accounts had a $24,000 credit line and had been open since 1987. I don’t think I used it this decade however.

Papa Riah used to carry some pretty serious credit card balances back in the mid-90’s. To manage the accounts, I used to do something called balance surfing – which basically meant that I kept transferring the balances around to the bank offering the best terms for balance transfers. This sort of thing dried up a few years ago but was big in the 90’s. Because I never made a late payment, every bank in the country wanted my credit card balances and used to offer me crazy things like 0% interest for 6 months for whatever I transferred to them.

I was only too happy to oblige them. That was the way I kept my credit spotless. At one time I had over $50,000 in credit card debt. Of course when the teaser period was up the bank tried to hit me with something like 16% interest payments. But I simply transferred the balance to the best deals from my other banks at that point, oftentimes to the same bank I transferred the balance away from a few months earlier. There were always plenty of offers in the mail from all the cards I had a zero balance with.

They didn’t care. This is what the banks did back then. I suppose it all worked out for them and guys like me who worked the system were just a necessary cost of doing business. I had over $100,000 in available credit that I accumulated in the late 80’s when banks were at war trying to build credit accounts. (Back in my youth I used to use that credit for business purposes like financing the buying and selling of used cars from my front yard.)

The thing that I find hilarious about the banks sending me credit card account closure notices is that they wouldn’t let me close the accounts when I tried to a few years ago. One day I saw how ridiculous it was to have all these credit cards that I do not use and called many of them in an effort to close them. They were very adamant that I did not close them! They insisted that my credit score would go down and that I should keep the accounts. Not being in a mood to fight them on it I conceded and kept the accounts. Now I get notices that they are closing them on me!

Oh, and in case you are wondering how I ever paid off $50,000 in credit card debt, I got into the sub-prime mortgage business in the late 90’s. Piece of cake.

Papa Riah

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