Author Topic: Paying off a credit card that keeps lowering my available credit  (Read 3097 times)

Tris Prior

  • Magnum Stache
  • ******
  • Posts: 2794
So, about 2 years ago we did a short sale on our condo, which had the predicted consequences to our credit. My B of A credit card immediately lowered my available credit to just a hair above what my balance was. And every time I paid off another chunk of that card, they would again lower my available credit. This happened at least 4 times.

(My mortgage was not with B of A so I am assuming I got caught by that practice of credit cards penalizing you if you have a black mark elsewhere on your credit. None of my other credit cards did this, though.)

Anyway... my score has improved to 705-ish. I've paid off all of my other debt but I am afraid to pay this one off out of fear that they'll close it entirely if I have a 0 balance. I've been keeping a $100-ish balance on it and I have a recurring monthly bill charged to it so it remains active. It REALLY irks me to see that balance sitting there when I'm perfectly capable of paying it off.

Has anyone been in this situation and had this happen to them (bank closes your account when you hit a 0 balance)? It will be 2 years in May since there have been any black marks of any sort on my credit but I know the short sale will stay on my report for 7 years.

I would not care so much if this weren't my oldest credit on my report (got the card in college, in 1992, though it was not owned by B of A then). If that weren't the case, I'd happily never do business with B of A again, as I had many customer service issues with them before this happened. (We refer to them as Bank of A-Holes in our house.)

kpd905

  • Handlebar Stache
  • *****
  • Posts: 1717
Re: Paying off a credit card that keeps lowering my available credit
« Reply #1 on: March 26, 2016, 12:44:05 PM »
Who cares if they close it?  It isn't worth paying interest to keep it open.

vhalros

  • Bristles
  • ***
  • Posts: 309
Re: Paying off a credit card that keeps lowering my available credit
« Reply #2 on: March 26, 2016, 01:39:40 PM »
Who cares if they close it?  It isn't worth paying interest to keep it open.

+1

lakemom

  • Bristles
  • ***
  • Posts: 399
Re: Paying off a credit card that keeps lowering my available credit
« Reply #3 on: March 26, 2016, 01:57:19 PM »
I'd call and close the account TODAY.  That way it shows as closed by you and not BoA.  I wouldn't keep it for any reason unless all other credit is 2yo or less.

Tris Prior

  • Magnum Stache
  • ******
  • Posts: 2794
Re: Paying off a credit card that keeps lowering my available credit
« Reply #4 on: March 26, 2016, 02:58:23 PM »
Doesn't one's credit take a hit for having a shorter credit history, though? I REALLY would love to just give B of A the middle finger and not do business with them any more. But we may need to find a new apartment soon (landlord has the building up for sale) so I'm worried about my score.

Or, does it not matter if other accounts are more than 2 years old? My next oldest card is maybe 15 years old or so.

dess1313

  • Bristles
  • ***
  • Posts: 442
  • Location: Manitoba Canada
Re: Paying off a credit card that keeps lowering my available credit
« Reply #5 on: March 26, 2016, 03:00:25 PM »
why should you worry about it?  close it.  your credit is rebounding, its been 2 years, apply for another one in a short bit. you owe them nothing.  why bother paying them interest if you don't need to?

look up ones with good rewards for little or no fees.  if you have no other credit card, pick one that's free to use.  then later on if you want rewards, you can pick another one to use for specific situations

If you're concerned about your rating not being good enough, apply for the new card now, get it then close the other one

ShoulderThingThatGoesUp

  • Magnum Stache
  • ******
  • Posts: 3057
  • Location: Emmaus, PA
Re: Paying off a credit card that keeps lowering my available credit
« Reply #6 on: March 26, 2016, 03:36:15 PM »
Have you tried calling and asking for a credit increase? I know it sounds dumb, but it would trigger a human to look at your account and maybe realize the automatic decreases are silly.

VladTheImpaler

  • Stubble
  • **
  • Posts: 214
Re: Paying off a credit card that keeps lowering my available credit
« Reply #7 on: March 26, 2016, 06:00:30 PM »
A credit score of 705 is considered Good by Experian and will get you approved for almost all home or auto leases.
I'm with everyone else, pay it off and close it.

Tris Prior

  • Magnum Stache
  • ******
  • Posts: 2794
Re: Paying off a credit card that keeps lowering my available credit
« Reply #8 on: March 26, 2016, 09:00:29 PM »
Shoulder, I didn't think of that. That's not a bad idea. At least that would tell me if they still consider me high risk. I can at least try.

But really, I want to ditch them, so thanks for the info, everyone! Everything I've read has told me that you should never close your oldest card as it's a hit to your credit so I was wary.

cchrissyy

  • Pencil Stache
  • ****
  • Posts: 734
  • Location: SF Bay Area
Re: Paying off a credit card that keeps lowering my available credit
« Reply #9 on: March 26, 2016, 09:06:24 PM »
your next-oldest card is still 15 years old?! that's great!

 yes, close this one, and do it before they do it to you

dess1313

  • Bristles
  • ***
  • Posts: 442
  • Location: Manitoba Canada
Re: Paying off a credit card that keeps lowering my available credit
« Reply #10 on: March 26, 2016, 09:11:28 PM »
Doesn't one's credit take a hit for having a shorter credit history, though? I REALLY would love to just give B of A the middle finger and not do business with them any more. But we may need to find a new apartment soon (landlord has the building up for sale) so I'm worried about my score.

Or, does it not matter if other accounts are more than 2 years old? My next oldest card is maybe 15 years old or so.

perfect!  go for it and close it!  15 years is great.  even 3 or 5 years would be good.