A long time ago I applied for a bank account and got it. I only needed a debit card since that I was what I was using at the time. The bank also gave me a $30k credit card.
No this isn’t the brag and its going to be relevant why I am sharing this in a moment. Last week I got an email with one line saying that my credit card was closed. I thought it was a joke since there was nothing in the email to make me believe it was real.
Still I called today to verify that was the case. I had looked a few days ago at my credit score and it went down a few points. I guess that got me thinking that perhaps they did close the credit card. Today the bank told me that they closed the credit card and if I wanted a new one I would need to apply. I thanked them and hung up.
I didn’t want the credit card in the first place, and now they take it away and it hurts my credit rating. Why should someone who was responsible and didn’t spend money deserve to have credit taken away because he didn’t use it?
Last week I also applied for another credit card at the suggestion of my CPA who suggested that it would be helpful. I was approved at CreditKarma for that immediately at about $10k. I am not saying this to brag, but rather that I understand that if credit is taken away, the amount of credit and the history of having the account can hurt your score. By getting a new credit card I am minimizing the damage.
After all of this my credit score dropped about 8 points. I still have an excellent credit rating, so this is really a non issue. No I am not bragging just being transparent. I regularly use the other credit cards I have and fully pay them off. I also have the apple credit card since I thought it would be interesting, but it has really been boring and not helpful. I will keep it since sometimes it can be helpful like when you are traveling, but having a few credit cards is enough for me.
Apparently in the credit world, use it or lose it is the way they operate.