We used to have 8 credit cards, but as of today that count is down to 7 as I found out Bank of America (formerly MBNA) canceled my Visa card. I knew it was coming because I haven’t used the card since 2006, but it still stings a bit because I don’t recall ever receiving a notice.
This morning I was going through my account information for all my cards to capture my credit limits and make sure everything else is kosher when I noticed that only my BoA Mastercard was showing in my account. I called up BoA to ask and the rep said they closed it due to inactivity back in March 2009…two months ago.
Luckily this card only had a $1000 limit, and it wasn’t my oldest card. I opened it in 2003, while my Mastercard was from 2001, back when it was MBNA. I’ve been with MBNA since 1999 when I got my first card back in college. The Mastercard has a $25,000 limit (a quarter of my total credit limit), and I made sure to use it late last year to ensure they didn’t cancel it. Good thing I did, and perhaps I should use it again soon!
If you’re wondering why all this matters, here’s why:
- If you don’t use a card for a while (time determined by the credit card company, which could be months or years), they’ll cancel it, especially in the current credit economy.
- If that card is your oldest card, your credit score will take a big hit. Credit age is a big factor in your credit score, so even if you don’t like your oldest credit card (like I don’t), you have to keep the account active. I don’t like the BoA card because there’s no rewards on the account.
- If that card has a high limit and it’s closed, your credit score will take a big hit. If they had closed my $25,000 limit card, which is a fourth of my overall credit limit, other potential creditors would see that as a sign of distrust and would reduce or pull back their offers when I need them most, like when we’re planning on refinancing our mortgages.
So whether you like the card or not, if it’s old or a high limit, use it every few months, and make sure to pay it off immediately too. I probably won’t bother to look at the damage to my score from this little incident, but it did remind me to keep all of my other cards active!
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