Last night I got a letter in the mail from MasterCard letting me know that they were closing my account. I read the letter three times to make sure I hadn’t missed something. Close? My MasterCard account? WHY?
Facts About my MasterCard Account
I have not had a late payment on that card (or any debt of any kind) in years. YEARS.
My balance on the card is like, half of the limit.
I maintain a balance but make double the minimum payment every month.
I don’t use the card. In fact, I have followed a cash-only policy for nearly a year.
I am a credit card company’s wet dream.
So, now that I’ve been denied credit, I have earned ONE! FREE! Equifax credit report. Which I downloaded this morning. And look! It’s pages of “Pays as Agreed” or “No Negative Accounts.” And not a single missed ior late payment for years. But then, right down at the bottom under collections, I see a defaulted credit card I never opened. In a state I haven’t lived in for ten years.
In 2002, I realized that I’d had my identity stolen and went through a horrific process of trying to have it cleaned up. I thought I was successful. But here it is, seven years later, and one of the accounts I spent three months clearing off my record pops back up. When I tell you that resolving identity theft is a horrific process, I don’t think you can really understand the horrific-ness I’m talking about, until you go through it yourself. Much like passing a kidney stone or driving cross country in a 1984 Ford Escort in August with no air conditioning.
These are things you have to live through to appreciate.
Anyway, I have to go through this all again. And for what? A $627 debt to the University of Utah Credit Union. And after I go through it all again, you know what happens? Nothing. One call to the lender told me that once the account is closed, it cannot be reopened. Even though I have done nothing wrong. It’s closed. Fine. I don’t want to use the card. But from here on out, my credit history will have the words, Closed by Bank on it. And I don’t have to tell you that’s not good. Other lenders will see it and go, “Eeew. Don’t trust her. She’s been closed by the bank! And probably drives with an out of state driver’s license!”
I feel like crying. We’ve been trying so very hard to eliminate our debt, to save so that we can buy a home and have a family and all those others things people who didn’t spend their twenties racking up credit card debt seeing the world (Costa Rica, I’m looking at you) and buying groceries during unemployment have. This? It’s a setback. And I’m not really in a good place to handle any setbacks, you know?
Bummer… I just got a letter from CitiBank as well. They are increasing my APR from 4.9% to 14.9% effective in June. Thats right, it is retroactive. Their explanation is the ‘economic times’.
Gah. I’m sorry. This really sucks. My husband is a fraud detective; I see this all the time. In fact, it happened to my sister-in-law.
The saddest part is the attitude of the banks, who, in the past have made it so easy for identity thieve to operate. Then when someone falls victim, they are not only no help, they are brutal.
Have you put a fraud alert on your credit reports? If you haven’t, you should. It’s free. And do you have documentation of the identity theft? Because you should write a letter to Citi, attach copies of your documentation and insist that they at least put a note on your report that this was NOT your fault. It’s worth a try at least.
And honestly? Insist. Be a bitch. Really.
Hope this helps.
Oh man I’m so sorry to hear about this. It’s prompting me to check out my credit score just in case. Like you, I always make at least the minimum payment, I think I’ve missed it like twice. And I’ve been yards and miles better about not charging things I can’t afford and going back to the old school method of [gasp] saving for things I want or need. But sometimes it’s just necessary to use one and that really sucks. Someone also tried to steal my identity a few years back but I was lucky enough that they happened to be the dumbest identity theft ever and I caught it before anything too devastating happened.
Good luck – I hope everything works out and you get back on track to your dreams!
it’s stuff like this that makes me want to revert back to an agrarian society.
banks. credit. BOOOOOOO.
Remember what Dooce did? You can do that too. Maybe not the exact same thing but you have influence too. Granted, this is a bank we’re talking about but Finn is right. Be a bitch. If you know bitchy ladies, recruit them to help you write a letter, make some calls and keep up the pressure on this bank. Big hugs! Yes it is a setback but setbacks are temporary and in a while you will be looking back in time at this. One last thing: your boyfriend is better than Citibank’s boyfriend
Such a crappy situation, but it may actually have come about not because of the one outlier on your credit report but rather because of your good standing. Sound a bit crazy? Well, my husband just had a card of his cancelled and he never once carried a balance- paid it off every month (and has a credit score in the 800s to boot!). In fact, because of the card’s cash back bonus, he basically made money off the credit card company. And that’s why he got cancelled- because he was too good with the card and the company didn’t make any money off of him. They’re cancelling lots of people like my husband (and upping interest rates) because in these “economic times” the companies need the assurance of cash flow to chip away at their debts
Don’t ask how I know the stuff I’m about to tell you. Suffice to say I’m way older than you and have been through credit hell and am living to tell the tale.
Citi doesn’t give a rip about you and your performance, you do realize. They are not making enough money off of you, despite their interest rates and Draconian late payment and overlimit policies. The cc companies are scrambling right now to leverage themselves prior to the new legislation that actually limits their usury comes into effect. You are not a moneymaker according to their analytics. Period. It’s nothing personal, to them anyway. And you’re not alone. Longer term, the matrices the FICO people use will adjust simply because of all the people they’re doing this to.
Here is what you can do in the short term. Wait until the “account closed by lender” notation comes onto your credit report’s listing of this debt. Then contact Experian and the others to insert a note of your own. This way *your* explanation supercedes the account closed by lender one. They generally only have room for one note. Bone up on dispute resolution strategies with the credit report people. There is lots of information online about this.
Do the same for the identity theft notation from way back. It’s not worth it, time and aggravation-wise to try and get it removed now. Just insert a note. Right now lenders aren’t lending to anyone. When it comes time for you to get your mortgage (not within the next six months, surely), the game will have changed. It is stressful and ultimately non-productive to try and beat the game if it’s changing constantly. Just go about your business as you have been doing, on the up and up, and make sure your side of the story is evident for an underwriter to review.
In the meantime, make a friend of a mortgage lender’s representative. Someone you can trust, not an opportunist. Select a major mortgage company, not a broker. Brokers are into the latest and greatest, and are more likely to put you into a product that could bite your butt. When the time comes, you’ll get a loan. These people have to eat and banks need to make money.
If you are really concerned about your credit rating, go out and buy a used car, pay on the loan for a year on time. You’ll surpass this temporary hit to your score. Trust me. One point difference in mortgage interest on a $150,000 mortgage translates into negligible monthly outlay. You’re doing the right thing saving for a 20% down payment. Screw Citibank. Now go have a cocktail.
crap
I had that happen with an outstanding $96.72 phone bill in a town I have NEVER visited let alone lived in – I so feel your pain (discovered it YEARS later when applying for a loan)
AMEX cut my husband’s credit limit in half last month….he earns almost 6 figures, barely uses credit, has perfect credit and pays his balances off each month. I took the card and used it at Wal-Mart for house supplies, and it was that way for about three months, when all the sudden we got a letter stating it was being cut because of our shopping habits. AMEX likes to think that if you shop at costco or wal-mart, you must be a poor dirtbag who doesn’t pay their bills, which to me sounds like profiling, and that HAS to be illegal. But they get away with it…. now I tell everyone I know to close their AMEX accounts. CITIbank sent us a letter yesterday too saying they were closing the entire Home Depot credit card program, that wasn’t based on us individually. So I am guessing CITIbank is going through some pretty tough times.
F*** mastercard. I had a citibank card with them up until this past May. I got the card because it was the same one my Mom used and I earned 5% cashback. Several years ago I got one of those mailers that they have to send out, updating privacy policies, changes to percentage rates, stuff like that. I learned a long time ago that it is very important to read those and I was very happy that I read this one. It was notifying me that they were reducing my cash back rate from 5% to 1%. It also said that if I wanted to opt out of this to call the number printed. I called the number and gave the necessary information to opt out. End of story….not so much. This past May my card was due to expire. I had several things that were automatically billed to the card in order to earn more cashback. I called in early May to find out when my new card would be sent so that I could make arrangements to give the new card number of expiration date to the necessary people. They said it would arrive before the end of the month when it was due to expire. May 31 rolls around and no new card so I called again. They said the would overnight the card to me. The next day, no card. So I call again and finally after asking to speak to a supervisor did I find out that they were not going to issue another card b/c I called all those years ago to opt out of reducing my cashback. I said that was fine, just send me a check for the remaining cashback that I had on the card. They said they couldn’t because the account was now closed.
So not only did I switch to a visa card, my Mom called and canceled her citicard because of their shady method of telling me that my new card was coming and waiting until after the expiration date to close the account and erase my cashback that I had earned. Had they told me that I would not be issued another card, I could have still collected the cashback before the account closed.
I don’t really care if my credit report says closed by bank because I have flawless credit as it is. But I hold grudges and I will never ever deal with mastercard or citi again.
These are the most frustrating economic times! I’m so angry at ALL of the credit card companies right now! They can do whatever they want to make money. My credit limit from BofA was $5,000 and they decided to drop it to $500!!! I didn’t even have a balance!!! This dropped my credit score 100 points! 100 POINTS!!! Yes, my score is still in the “ok” range, but how is it that people who are responsible and pay their bills on time get punished? Everything feels so backwards right now. How sad that I feel like the luckiest person alive just to have a stable job/income and to be able to pay my bills. Wow, I feel better, thanks for letting me rant!
You are not alone! I went thru the same experience in 2002… and again in 2005… and again last year when my bank closed my account due to an account I never opened being in collections.
If it’s any consolation, I work for a bank (not Citi); one “closed by bank” will NOT cause problems if it is the only flaw in recent history. I still see a picket fence, a massive international postcard collection, and years of happiness in your future.
And if someone can introduce me to a hot, single, 30-something guy in Boston, I’ll happily use my “closed by bank” status to buy the fence next door…
American Express recently closed my account because I had not used its credit card in over a year. No balance. No late payments. Just inactivity. So, that may be why MC closed your account. (AmEx agreed to re-open the account, so it wouldn’t hurt to ask MC the same.)
It sounds counter-intuitive, I know, but technically, you are not as “important” to the Credit Card Company (“CCC”) as you might expect. When you behave appropriately (as you are doing) with your credit card, they do not make any money (or not as much).
Do you pay your bills on time? They don’t make anything off of your late fees. Do you carry a balance of only a half of your total credit limit? They make less on interest. The only way you could possibly be a less valuable customer in their eyes is if you (GASP!) paid your entire balance in full every month.
To a CCC, you are only valuable to them if they make loads of money off of you and your spending habits. If you behave like a responsible human being, to the CCC, you are worse than a total deadbeat.
[Sorry - I know that was painful to hear..... would you like a tissue?
]
Heather:
You aren’t, in fact, the card company’s wet dream. You’re their nightmare. Paying double the minimum due, on time, with half of your line of credit untapped makes you a responsible person, and they’re looking for just the opposite. The more a person owes/is late/misses payments, the higher the fees they can charge. That’s what they want.
Twisted much?
Take heart, though. We just went through foreclosure (due to losing most of our investments last year, a business, and, subsequently, income), and our perfect credit is now in the crapper. But we’ve lived to tell the tale. There is life after consumer death.
The upshot of it all? I will never owe anyone anything, ever again. The banks are shooting themselves in the foot on this one.
Keep your chin up. It will get better.
Best,
Pamela
Even if you pay off a card entirely on time you are worthwhile to the bank just by using the card. They make money on the transaction fees charged to the merchants. If you don’t use a card at all and keep no balance they are not making anything off you. So use your cards, even if it’s for relatively minor purchases that you pay off in full. I have a number of cards and although I keep only a small running balance on one of them I try to use each of them for various purchases from time to time. So far I only had one card for my non-profit canceled due to no use. HSBC sent a letter they were reducing my limit but so far, after a few months, it appears they haven’t. Capitol One raised my interest sky high so I transferred the balance and complained. They responded with “thanks for being a good long term customer” and a short term offer of 0% until Jan. I made a new charge and found out they are not honoring that offer. So no more charges with them, except perhaps an infrequent small token purchase to avoid inactivity cancellation.
UGH! Why do these glitches always come up right when you’re in the middle of acting responsibly? As if NOT jetting off to Costa Rica and eating out isn’t hard enough, you’re faced with the annoyance of fighting customer service lines and muddy channels to fix a problem you left behind long ago without irresponsible retail therapy? It’s enough to make you want to relapse (NO! Tack a picture of the dream house to your card!)
I wish I had more words of comfort, but I’m angry on your behalf. That’s all I’ve got.
Unless I am misunderstanding something, a card that was closed 7 years ago should no longer be on your credit report. You can file discrepancy reports with most credit bureaus online. Request that it be removed. He’ll even bankruptcies fall off your credit report in 7 years. I also would have to agree with the other commenters in that this one collection account is likely not the culprit. If anything, it would just give the credit card companies leave to raise your rate.
I agree. Make a big fat internet stink about it. I’m game to help…Banks and Credit companies should already be feeling shame for putting the American Economy in a tailspin. Make it stink to high heaven.
You are misunderstanding.
The collection account is not closed. It has never been paid. But it was opened by some other Heather Hunter, with a different birthdate and a different SSN. But because they want to be paid, they don’t seem to care that they’re accusing the wrong person of defaulting.
And I know it’s the reason they closed the account because THEY SAID SO.
Jeez.
That really really sucks. Identity theft is a hell that never ever seems to go away. It makes me feel so helpless thinking about it. Which in turn makes me want to punch someone.
ARGH!!!!!!!
Fish, I feel your pain! I have been busting my hump over the past few years to clean up my credit and have paid off my credit cards numerous times along with a number of other things such as two car loans. My hubby on the other hand had debt up to his eye balls. Once we got married (see below to find out why I waited until AFTER the wedding), I paid off his debt with money I had saved up so we too could buy a house.
Well in July we decided to buy and started going through the lending process. That when I found out that my past had come back to haunt me. You see 10 years ago I co-signed a loan for (yea REALLY dumb move – but I was in love and we were going to get married – or so i thought) for my ex-fiance and come to find out he filed bankruptcy! Now the loan shows on my credit! So now hubby’s credit was better than mine! Go figure! We were able to get a great interest rate on the mortgage by just using his credit (using mine actually made the interest rate go up). So now I am not on the mortgage, but because we live in a community property state, I would still have rights (and responsibility to the liability) to the house.
I guess what I am trying to say is that it doesn’t mean you cant get a house and live out the dreams you guys have planned. I don’t know what Texas divorce (not that you guys will end up there) are, but it might end up that The Boy can put the mortgage in his name if all else fails!
Where are you from? Is it a secret?
Thanks
ok so despite the crappyiness (its a word im sure of it) two things made me happy in your blog… you mentioned buying a home and starting a family in one post!! i love it!!
(im sorry to hear about the troubles.. ive personally never gone through that I but couldnt imagine the nightmare)
It may not be an identity theft thing. It may just be an economy thing. Creditors are closing accounts all over the place.
Fish, So sorry you’re having to deal with this. In order to protect myself from identity theft I requested a “credit freeze” on all 3 credit agencies. No one can open up a new line of credit on my account. If I’m going to refinance or buy a car or whatever, I can unfreeze my file for 30 days. There is a small charge ($5-10?) for each but it is so worth the piece of mind.
all these credit cards (sorry Fish, by the way!) .. can you get debit cards in the US?
the whole system is very different here in Oz … but having transferred from credits to debits has been the best move I’ve ever made ….
::waves:: Hi, bank manager here (Banks are not evil, executives are, btw. I’m getting really tired of being a pariah because of decisions I have nothing to do with). Email me if you’d like. I can maybe try to help out or give you a new idea from the bank’s perspective.