Thread: HELP: Most of My Available Credit is Stuck on a Card that I can NOT Use

Hi Patrick -

I am by no means one of the resident experts, but looks like you posted this awhile ago with no response, so thought I'd give you my two cents.

First of all, my understanding is that the new credit card laws apply to ALL credit card companies regardless of when you opened the card. ALL of my cards (and they are ALL pre 2009) sent me notices about how the changes would affect me. Unfortunately, this doesn't stop "balance chasing" (a real frustration of mine bcs as I pay down my never-used Chase, the available credit line tends to go down with it).

Second, age of a credit card is (I hear) enormously helpful and works to your advantage when figuring your credit score. And as long as you are using it and paying it off at the end of the month, the new terms don't really matter. If you are worried about them closing you bcs of non-use, you could always pay your utilities or netflix or whatever, monthly.

On another note, I had an almost identical relationship with BofA that you describe....oldest card, got it in college, enormous limit that I ran up and paid down several times over two decades...I learned the hard way that it is best to stay under the radar with BofA. I called to ask them to lower my interest rate, and to make a long story short (this is pre credit card laws, don't know if that makes a difference) they put me on a repayment plan without my consent that, sure, gave me a 9% interest rate, but also closed my card and got rid of my beautiful credit limit despite the fact that I was aggressively paying my balance down and had less than 8k on a 30k card. Still makes me livid when I think about it...so beware.

Are you wanting to lower the limit on you BofA bcs you "can't" use it and don't want an open line bcs you MIGHT use it and get back into trouble with a high interest rate if big unexpected expenses come along? As far as increasing your other cards, sometimes it's simply a question of asking. But, be careful, bcs if your credit is less than stellar right now (high debt/income ratio), they will see it when they go through the approval process and once you are on their radar (which is what happened to me) the headache never stops.

Cristina,

Thank you for your reply. I've been doing a little more looking around since I got nowhere on my post. I've since made my mind up. First, pre-2009 cards are not subjected to Credit CARD Act of 2009. You might have gotten notices saying that your lender is going to follow whatever, but I've read the law and it was very clear that if your card is old enough, it is not, I repeat "not," grandfathered in.

Second, I do business publicly and privately based primarily on reputation. Bank of America has completely soiled their reputation with me, and I will never do business with them again. I will testify on the mountain top my distain of them to anyone that will sit still long enough. I have since decided that I'm going to strategically pay down all my principles to zero, then I am going to cancel my Bank of America first.

Once that is done, I'm going to shop around and determine the most stable credit cards that match my needs. This is what I want: I want my wife and I to each have one "use anywhere credit card" and each have one "boutique credit card" that nets us some kind of special benefit. So, perhaps something like: two CapitalOne cards, an Amazon.com card and a Kohl’s card. That sort of thing -- I'll figure those details out later.

I'm going to limit my line of credit, and I'm going to continue to make a conscious effort to not use credit on a day to day basis, even if I do intend to pay it off before interest. My wife and I have been on our new 2011 budget system that involves thorough documentation of all of our cash flow including our debt payoff strategy and even virtual escrow accounts for non-monthly expenditures (like auto insurance or termite bond, etc.). We have been very happy with the result, and as our principles decrease, we feel better and better about it every day.

Everything we do now, we do as a team. No individual even carries their credit card. Everything is in the safe. You have your allowance on your debit, and that is it. If there is something major we need, say a new roof or something, we will have to sit down and make a strategy that could or could not involve using a line of credit. Everything has been very precise, and moral has been orders of magnitude higher in the home.

I only even need to entertain the idea of having revolving credit accounts for the purpose of maintaining that stupid credit score, so if we need a car loan or go to buy a new house, we are treated with respect.

Thank you again, Cristina, for your reply. Our situation has been crushingly difficult, but through no one's fault but our own. Our solution has since been upliftingly affective, through no one's ability but our own. We feel dramatically empowered by the entire situation and only hope for the day when our marginal propensity to save is finally greater than our marginal propensity to consume.

If you would like more details on our budget, I would be happy to submit a blank example,
Patrick

Thanks for the clarification re: pre 2009 cards. I have not stayed as current as I had thought...most of my credit card woes are behind me and we are not using them anymore, just trying to pay them down (kind of like you)

credit boards dot com seems to get more traffic, btw. It's been so long since I've had a question that I accidentally landed here, as I had forgotten the difference

Cristina,

Thank you for the website suggestion. I will check it out.

Patrick

Great convo and info in here guys- thanks for sharing. I missed your original post somehow, Patrick, but here are my $.02 on the matter. I'm not an expert either, but I'd consider myself an avid hobbyist (simply because money matters play such a huge role in modern life). If it were me, I'd just close out the pre-2009 cards, especially those with BofA or other companies that you've had hassles with already. On the flip side, if you aren't worried about actually using the credit, you could cut up all your cards and leave it open but inactive. I have one or two from years ago that are open lines, but I haven't even had a physical card in 10 years. I'm not entirely sure if that is a net positive or negative effect on my credit scores, but the consensus is that it helps, and I can't complain about my scores right now.

On another note, the cards I currently have are pre-2009 and this thread has given me something to consider. I might move on to actively using new cards that are covered by the 2009 act, based on issues that *could* hit me in the future, even if I'm not at terrible risk right now. I do try to take advantage of rebate cards (air miles, cash back, whatever) but should I need to hold a balance, I think I'd be better off with a post-2009 card.

Anyway, just want to say congrats on all the improvements and here's to their continuation!

Magic,

Thank you! I'm glad things are working well in your situation. I've read things that say keep your cards open because the oldest card counts more towards good credit than a young card, etc., etc. I have an issue with that, because my wife has had a credit card number compromised before, and someone somewhere in the world charged her account. It was an active card, and we just happened to have been looking through that particular month's bill when we noticed it. We used to be real bad about not even looking at charges because there were so many, so who knows if that was the only time. Our lender did remove the charge, but that got me thinking that any active credit card can be charged simply for existing. My Bank of America card has a 5.9% fix rate on paper, but the moment I use it, it turns to a 17%+ variable card. I have hard copies of letters from Bank of America telling me this, but anytime I talk to someone on the phone years later, the representative says that she has no idea what I'm talking about. I have my documents, and they are very clear. So, that card for example would be a risk for me. I leave the account open at a zero balance, it sits for a few years, and then one day I get a letter that says that I'm being forwarded to a collection company for my unpaid account, because I left the account as paperless. If I'm lucky, I'll have set up paper statements again, and maybe I'll only have to dispute one $30,000 withdrawal one day. Oh, and that event will have "activated" my card, resulting in Bank of America doing whatever they want with my "new" variable account. Overall, it isn't worth my time or my stress to have "old cards for good credit." If I could go from a 18 year old college kid with no credit card, to a 24 year old employed professional with a 690 credit rating, then I'm pretty sure a 32 year old, post-graduate degree, employed, married homeowner could weather cancelling some cards.

Magic, thank you again for your contribution. Your words did not fall on deaf ears.
Patrick