mrmandel

That's not how it works. This won't affect the AAoA at all. The only thing that affects it is time passing or new tradelines (which usually lowers the Average Age but can increase it with backdating).

Centurion

In the middle of the great recession it was happening like crazy. I also made the mistake of calling up a company that managed several different credit cards I had and was told I could combine credit lines by the CSR. When we finished I had well over 150,000 credit line. This lasted for about 48 hours prior to risk department canceling everything. After a long call I got 65k usd restored.

ddallas

I think the closure of dormant cards is standard operating procedure for the industry, at least it seems to have been since 2007. In my experience, most cards will remain open if you use them once per year.

LAX_Esq

I try to convert miles/points cards I've churned to no-fee cards when the fees come due rather than closing the line of credit. The difference is that it's involuntary here.

I'm not saying it's a major effect, but it will affect your average nonetheless.

Let's take this scenario:

- Someone has 3 cards, which are 7, 4 and 1 years old.

One year from now, what is the average age of accounts if: (1) they close the 1 year old card today vs. (2) they do not close the 1 year old card today?

Explain how it works and where I'm wrong:

- Their current average age of credit is 7+4+1=12 divided by 3 accounts, which gives 4.

- If they keep all 3 cards open, one year from now, their accounts are now 8, 5 and 2 years long. And their average age of credit is 8+5+2= 15 divided by 3 accounts, which gives 5.

- If they closed the 1 year old card today and kept the other 2 cards open, one year from now their accounts are 8, 5 and 1 years long. And their average age of credit is 8+5+1 over 3, for 4.67.

PaulMSN

A couple years back my CU sent me an email warning that they would close my CC for inactivity if I didn't use it soon, so I did. Now I use it (and my other cards) every 4-6 months and haven't received another email. CUs are nicer than banks.

mrmandel

AAoA doesn't distinguish between open or closed tradelines. So the average in your example goes from 4 to 5 after one year because they haven't added or removed any tradelines. The average will age at the same rate time passes unless you add or subtract tradelines. Open or closed has no effect on AAoA.

zippy the pinhead

I would surmise that every major bank has slightly different policies/SOPs and various triggers in their software which, together, work like a carrot and stick to achieve their goals. And then there are humans who sometimes get involved, as well. Hard to predict, no?

For example, I had a card with B of A for some time, and I wasn't using it. Long story short, I applied for a new card with them and they closed my other one, without even asking. Certainly they were within their rights, but it could have been done in a way that came across as a bit more polite (not that there is any love lost on B of A from my end).

Some months before, I had a card with Chase which I had allowed to become inactive. They emailed me a very attractive offer: spend X, get a 2X point bonus, which I promptly took them up on.

In all the years I had the B of A card, I can't recall receiving any marketing push from them, though my memory is like a sieve.

startbyservingothers

Having a card closed will likely have very little immediate effect. If it's an old card, you are relying on that raising your average age of accounts. I'd rather not argue the specifics of when the formulas stop counting the credit line and age in its formulas.

The point is: You are better off with the formula's counting an older card card. At some point they will stop counting it after it has been closed.
(Tomorrow, next month, 2 years, 10 years? I don't care! The point is I want them to count it forever! )

Lesson Learned. You got lucky by them waiting two years to cancel you. Go use your other inactive cards right away. Be sure to set up autopay before hand or pay them online right away, because these are cards in the back of your mind at this point.

If you want to keep a relaxed approach going forward, just be sure to use every card every 12 months and hope for the best. I prefer a more active approach of every 3-4 months for older cards. I already lost two of my older trade lines to this in the past and hope to not lose any more.

snackboxes

Reminds me to use the Citi Dividend card that has been sitting in my drawer for almost two years...

sdsearch

That doesn't help if you're getting several Citi no-AF HHonors cards a year. They're already no-fee cards, but just how many can you collect? You have to start cancelling them after you've had a few, or else you can't get them any more ("you have too many Citi cards open").

Perhaps you've never churned a "frequently" churnable card before. What techniques work for one-bonus-a-lifetime cards (Amex personal now) or one-bonus-only-every-few-years cards (Chase, for example) may not work for one-bonus-every-few-months cards (some from Citi, for example).

Also, techniques like converting rather than cancelling tend not to work forever, if you keep on getting more cards from the same bank, due to limits that each bank has on how many cards they're willing to let you hold.

So while converting rather than cancelling might be great for someone starting out, or someone churning very lightly, it doesn't tend to be a useful technique for people who churn more heavily and/or have been churning modestly for many years.

Rob14

I had two citi cards I had not used in at least 4 years cancelled out of the blue. I wonder if it has anything with my recent 6 AA card sign ups.

xcalibir

Hey guys,

One of my longest credit history cards was just canceled by the CC for inactivity for 2 years. I was really pissed and my credit score took a hit.

My question is

1. Is it enough to charge 5 dollars a year on my no fee credit cards?
2. Do the CCs that have fees i.e. IHG Card, ever get terminated for inactivity?

Thanks

guv1976

Wirelessly posted (BlackBerry: BlackBerry8530/5.0.0.1030 Profile/MIDP-2.1 Configuration/CLDC-1.1 VendorID/417)

Which card issuer?

xcalibir

Citi which canceled it. I have another citi card and Barclays card that I plan to spend 5-10 dollars a year to keep the account open.

sdsearch

There are already plenty of existing cards with similar questions answered, such as: