- This topic has 10 replies, 5 voices, and was last updated 10 years, 9 months ago by
earlyretirement.
-
AuthorPosts
-
April 28, 2014 at 12:08 PM #21059April 28, 2014 at 12:14 PM #773428
livinincali
ParticipantApril 28, 2014 at 12:15 PM #773429spdrun
ParticipantI thought if your balance-to-limit ratio stays the same (i.e. you open another card w/o annual fee with same limit) then your credit won’t be affected. Closing an account IN ITSELF isn’t a reason for damage to credit.
April 28, 2014 at 12:17 PM #773430bearishgurl
Participant[quote=spdrun]I thought if your balance-to-limit ratio stays the same (i.e. you open another card w/o annual fee with same limit) then your credit won’t be affected. Closing an account IN ITSELF isn’t a reason for damage to credit.[/quote]
AMEX Gold doesn’t have a “limit.” When Gold (and above) cardmembers want to buy something expensive using their card, they will “consider” it based upon prior payment record and known assets.
April 28, 2014 at 12:43 PM #773431Anonymous
GuestYour credit score is high enough that it won’t matter if it drops a little.
April 28, 2014 at 12:53 PM #773432Participant[quote=livinincali]Maybe this helps.
http://www.creditcards.com/credit-card-news/help/cancel-credit-card-6000.php
[/quote]I can pay off the $39 balance I owe on the card today and have already transferred two small reoccurring charges I had on it which the vendors assure me will not appear on my AMEX bill for May or beyond.
The $64M question I have from your link is “If I cancel the acct, how will my utilization ratio be higher (and thus have the potential of lowering my credit score) if AMEX Gold has no utilization ratio (because they have no credit limit)?” Acc to the article, in my case it appears that the only way my FICO score can be “dinged” by my canceling the acct is if AMEX’s reporting of my cancellation to the credit bureaus make it appear as if I have a higher utilization ratio after cancellation.
If AMEX IS using some sort of (unknown and unquantified) utilization ratio when they report to the bureaus on a customer, then what if I asked my longtime Visa carrier to upgrade my credit limit, say, by $5K (not that I’ll use it but for the purpose of creating a higher “utilization ratio” for me on my credit reports)? I have a perfect payment record with them over ~15 years and so I would probably be successful. If I did this BEFORE canceling my AMEX acct, would this prevent my credit score from being lowered by the acct closing?
April 28, 2014 at 1:04 PM #773433Participant[quote=harvey]Your credit score is high enough that it won’t matter if it drops a little.[/quote]
harvey, I’ve been told that but JUST IN CASE I want to take out a small residential mortgage on my own, I want to retain the “sterling” FICO score because my “income” is very low by mortgage lenders’ standards. I wouldn’t want anything but the very best rates available to me at the time.
I’m one of those people who could comfortably make a mortgage payment indefinitely on time which was 55% of my monthly income. But telling this story to a lender isn’t exactly what they were hoping to hear.
Most likely, I’ll pay all cash for my next home but prices have gone up a bit in some of my “choice” retirement areas, mainly in the last 2.5 years.
April 28, 2014 at 1:09 PM #773434ParticipantI just pm’d ER to see if he can contribute his wise counsel here on manipulating the CC companies (and his extensive knowledge on AMEX, in particular) …
April 28, 2014 at 1:41 PM #773438earlyretirement
ParticipantHey BG,
Just my opinion so please take it with a grain of salt. I’ve had an AMEX card since I was a teenager (I had a job in high school and they gave me one while I was still in high school). I’ve had it all these years.
I agree with some of the other posts. I wouldn’t worry in the least about this. Your score won’t go down much at all.
One of my clients works at FICO and he told me a while back it’s this formula for your FICO score:
35% Payment History
30% Debt Usage
15% Credit Age (Average age of all your credit accounts)
10% Credit Inquires
10% Account MixAlso, something important to note with American Express is they will allow you to get a new card and KEEP your “member since” date. So even if you downgrade to the Blue card, request that they change your member since date to when you got your Gold card and they will do it! And it should reflect as such on your FICO report.
For example, I started out as a teenager as a Green card member. Then in college I upgraded to Gold then when I graduated from college I got the Platinum. A few years ago I got the SPG AMEX card they sent out a new card and it had member since 2011 and it reflected as such on my credit report. Then I asked them to change it to match my other cards. They did and immediately fed ex’ed me out a new card a few days later. The next FICO report the following month it was already reflecting back to the original member since date. They don’t automatically do that when you downgrade cards but they WILL do that if you request. (I learned this trick many years ago from an AMEX executive client of mine).
So I’d recommend that you call AMEX and cancel your gold card. They will try to get you to keep it. That’s when you can tell them you’d be willing to downgrade to the Blue card but request they keep your “member since” date as when you first got the gold card.
I’ve ALWAYS done that for the various AMEX cards that I have and they have done it and it reflects as such on my credit report. Keep in mind if you have additional members they will NOT backdate their member since dates. Just yours as the primary card owner.
Even if you didn’t do this as you can see above from the breakdown on the FICO score, you wouldn’t lose many points at all. Realistically anything over probably 775 is probably all the same. I’m also over 800 but never really noticed anything different at all.
But if it’s that big of a concern for you, which I don’t blame you for wondering is make sure you request once you convert over to the Blue card to keep your member since date the same as Gold and it WILL reflect as such on FICO report.
I hope that helps.
April 28, 2014 at 2:23 PM #773450ParticipantThanks so much, ER, especially for the advice on keeping the “Member Since (2009)” date. I have already been told by their CSR this morning that they were pretty sure I could keep my same card number for the Blue card if I chose to later downgrade. If this happens, it is likely that no change at all will appear on my AMEX account on my credit reports, except, possibly a new “credit limit.”
It seems like a new “credit limit” will only serve to help my credit score, not hinder it.
Well, I guess I better check out Amazon and spend whatever remaining points I have pretty soon ….
April 28, 2014 at 3:04 PM #773452Participant[quote=bearishgurl]Thanks so much, ER, especially for the advice on keeping the “Member Since (2009)” date. I have already been told by their CSR this morning that they were pretty sure I could keep my same card number for the Blue card if I chose to later downgrade. If this happens, it is likely that no change at all will appear on my AMEX account on my credit reports, except, possibly a new “credit limit.”
It seems like a new “credit limit” will only serve to help my credit score, not hinder it.
Well, I guess I better check out Amazon and spend whatever remaining points I have pretty soon ….[/quote]
I’m not sure about keeping the same credit card #. I would doubt it if you are changing types of cards but maybe they changed that. IIRC, when I was changing between gold to platinum I couldn’t keep the same # but that was a long time ago.
But I wouldn’t get too stressed at all thinking about this. Your FICO is really high and even if you closed this card I doubt it would cause your score to go down too much and certainly nothing to worry about.
Realistically when you are this high I’ve been told by my friend at FICO it’s all the same really. But I’ve been guilty of also being worried about these sorts of things.
Because it’s been so long ago that I had a mortgage on a house or a car loan that these things dropped off my credit report and I pay off my credit cards each month. So rather than paying cash for my last new car I just got a 1.9% loan so I’d get the account mix back up and sure enough once I got the car loan added my FICO went up higher.
It’s funny how FICO works. And how they have gotten some of us consumers to really focus on that score.
-
AuthorPosts
- You must be logged in to reply to this topic.