Yasmina2005

Dear Expats:

I received today a letter regarding my AMEX card telling me that:

1- their records show that I have not used the card over the past 12 months.

2- If I wish to keep my account open, I will have to use my card within 35 days of the mail date of the letter.

3- If I should choose not to use the card within 35 days of the mail date of the letter, they will be closing the account, effective 45 days from the mail date of the letter.

Is this language normal, i.e. is receiving such letters legal? I feel like they are threatening me? Besides if they take the decision to close my account because I am not using the card, this will hurt my credit score. Even If I close the account myself, my credit score will be hurt. I believe I can use the card whenever I am pleased to do so. no?

What do you think of all this?

Please advice,

Thanks,

Yasmina

Auld Yin

Believe it or not, the card belongs to them and they set the rules for its use, misuse and non-use. Check out the agreement you received along with the card. Your credit score should not be damaged by its closure.

JonboyE

Yes

Yes

No.

As far as Amex are concerned why should they incur the cost to keep you account open if you are not going to use it and make them some money?

ChrisBoar

Actually it will in the short term, for 2 reasons.

1) Part of your credit rating is based on how long you have had credit facilities. If you cancel a long term card that will have a small hit on your rating, which will take a some months to be reduced.

2) Your overall % credit owed goes up if you suddenly cancel part of your overall credit availability. E.g. if you have 2 cards with say $20,000 credit limit total, and say $6000 owed on one card, you've used 30% of your total credit capability. Cancelling one card means your credit load suddenly shoots to 60%. I don't know what the exact threshold is, but I think if you hit around 70% of your total credit facility your rating starts to drop.

BristolUK

So if you think you might hit whatever that threshold is, apply for increased credit so you can still keep within it.

But that sounds a bit daft doesn't it?

ChrisBoar

Well yes. But then why bother canceling the card then?

BristolUK

Oh I wasn't concerned about the card. I was only commenting on the principle of trying to increase the credit limit so as not to reach the threshold.

I mean, it's pretty strange that they give you a credit limit based on your decent credit rating and your rating drops if you get near the limit they think you're good for. Then it's crazier that you can get the limit raised so as to not get too close to it.

JonboyE

Actually, that is a good point. If, by allowing Amex to close their account you end up with a high debt to available credit ratio it could damage your credit score.

cornmatthew

At least they warned you and gave you a chance to keep the card.

My wife had a TD Visa card she kept for emergencies, until one day it was declined.

Apparently she hadn't used it in two years, so they cancelled the account. Except that they didn't bother to tell her until she tried to use the card.

Moral of the story? If you have a credit card and want to keep it, charge something to it every few months. It doesn't need to be much -- a cup of coffee should do the trick.

Souvy

That's what I do with my UK one. I kept it for trips to the UK. I don't go there often, so I use it here occasionally to keep it active.

dbd33

I overpaid my Barclaycard bill, they owe me a couple of quid. They send me a statement annually reporting the fact which I suppose means the card is still alive (not that I know where it is).

Almost Canadian

When we first arrived we opened a PC Financial chequing account and a PC Financial savings account. My wife used the chequing account for her business and we placed $20 in the savings account. Each month the savings account acculumated interest payments.

Last month, we received a letter asking us what we wanted to do with the $1.20 of interest that had accumulated in the savings account. They had closed it within informing us that this was what they intended to do and charged us $20 for doing so.

Welcome to Canada

Souvy

I took great pleasure back in the 1980s of walking into my Barclays branch and giving them the cut-up bits of my Barclaycard. They had decided to introduce a fee. Chase Manhattan offered me one with no fees. I still have it, although it's changed names a few times and is now MBNA. I still don't pay a fee.

Jingsamichty

Be careful when you 'think' you've closed a credit card... a few years ago, my wife got a threatening letter from a Debt Collection Agency, regarding an outstanding balance on a long-cancelled Amex card - for 7 pence.

Souvy

Those agencies are tenacious. I had grief from one a few years back. e bought a house in Oakville. It was an estate sale - the bloke had dropped down dead playing golf. His family knew very little about his affairs, including a lodger he'd had. Said lodger had a debt. The agency kept writing and even followed me when I moved to QC. It took ages to finally get rid of them.