Chase closed my credit card... Will it affect my credit?

This message was edited 1 time. Last update was at 07/23/2009

Hi everyone!! I am a newby to credit.com so please be patient. I got a letter from Chase Card Services today informing me they are closing my credit card. My account was recently accuired by them from Washington Mutual. I have a balance on the card. I am concerned what this will do to my overall credit score and I am looking for advice.

The Facts:
I have NEVER been late
I had a credit limit of $17,500.00 until I used my credit protection option and came off of it about 6 months ago. They then lowered my limit to $9800.00
About 30 days ago I closed my Chase (WaMu) bank account.
2 weeks ago I cancelled my credit protection with Chase.

I have a few other cards and they are in good standing.
1 year ago I took a medical retirement and am now on Social Security.

NOW:
I am in the process of paying off all my bills & cards in full including my car. Total owed is about $30,000.00. I also intend to close many of my cards.

What are my options in dealing with Chase regarding this untimely cancellation of my card? Should I call and negotiaite? I would prefer closing the card myself. (This card is one I inteneded to close at payoff)

My FICO score is good and I have recently qualified for a new home.

I don't understand why they did this as all my cards and bills have been paid on time and always more than the minimum.

Any opinions and/or advice you can give would be greatly appreciated.

Thanks in advance

Hi protech - welcome to the boards!

As far as options go, there really aren't too many. With credit card companies making a last minute rush to push all of their account changes through before the bulk of the new credit card reforms go into effect, we're all kind of at their mercy. In the current economic environment, the best way to manage your credit card accounts is to keep them open (closing them can hurt your scores) and pay them down as quickly as possible. In fact, if you can pay them down and only charge what you can afford to pay off at the end of each month, the changes that the card issuers are making probably won't cause nearly as much damage as they are to consumers that are already highly utilized on their credit cards.

I've answered each of your questions in order:

"I am in the process of paying off all my bills & cards in full including my car. Total owed is about $30,000.00. I also intend to close many of my cards." Don't close your credit cards unless you absolutely have no other choice. Doing so can have a detrimental impact on your credit scores. You can read more about this here: Will closing my old credit card accounts help my credit scores?

"What are my options in dealing with Chase regarding this untimely cancellation of my card? Should I call and negotiaite? I would prefer closing the card myself. (This card is one I inteneded to close at payoff)"

It never hurts to try contacting the issuer to negotiate and keep the account open. All they can do is say no. As far as closing the account goes, there is no difference between "Account Closed by Consumer" or "Account Closed by Issuer". As far as your scores are concerned, it's just looking to see if the account is open or closed. You can read more about this topic here: Account Closed: If a lender decides to close my account, will it hurt my FICO scores?

"My FICO score is good and I have recently qualified for a new home".
That's great that your scores are good! If you've recently qualified for a new home but have not closed on the loan, I would strongly advise against making any sudden changes to your accounts. This can actually backfire, tank your scores and mess up your chances of qualifying.

"I don't understand why they did this as all my cards and bills have been paid on time and always more than the minimum."

Don't take it personally, it's not you. Credit card issuers are looking for any way they can to minimize their exposure to risk during these rough economic times. It's happening to all of us (millions of consumers have had their credit card account terms changed over the past several months) through no fault of their own. We've got another 7 months before the largest portion of consumer protections under the Credit CARD Act go into effect in February. In the meantime, all we can do is continue to pay down those credit cards, keep the balances as low as possible and be prepared for more changes.