No. of Recommendations: 0
As to the squeezing of inactive accounts, the mantra here and elsewhere has long been to not close inactive accounts because of the impact on your credit score. I have worked in banks where I have been told the cost of maintaining an inactive account is minimal - it exists only as a record in a database.

Plus the risk of fraud, reissuing cards and any other overhead. Estimates I have seen are $10-15 a year.

The mantra here has been not to change any credit before applying for major credit. Those in debt paydown need to make certain they don't have inactive accounts.

These indiscriminate actions taken by the banks do have real world implications and in a number of cases have pushed consumers who have been dealing with major issues such as reduced or loss of income, devalued mortgages and such, over the edge.

Banks should take action to protect themselves from those who are no longer credit worthy. Living off of credit is not a right. It may push someone into bankruptcy or foreclosure. More likely it will push them there sooner rather than just delaying it.

Fortunately my score was solid to start with so I did not have difficulty replacing the credit (which I did for reasons other than to lower my debt to credit ratio), but that also resulted in a ding to my credit score because of the opening of a new account.

How much did both change your credit score? Credit scores don't always drop when new accounts are opened. Since you score decreased with the loss of the previous credit limit, the new credit limit should have offset some of the change due to new credit.
Print the post  

Announcements

UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.