Credit Card Closed for Non-Use

in Credit cards
35 replies 3.6K views
Hi all

The weirdest thing happened to me yesterday, which I just wanted to guage peoples feelings on, and also if this will affect my credit score.

I had a cc with Halifax with a £4300 credit limit on it. I cleared the balance last year and have had it on stand by for emergencies.

I received a letter from Halifax stating that as they are responsible lenders they audit customer accounts from time to time and mine had been earmarked. My credit limit had been reduced to £500 for non use and was going to be closed in 2 months.

I rang them and argued why? They kept on pushing the responsible lender argument and as I hadn't used the card for 6 months then there is nothing they can do, the account is going to be closed.

This seems extremely bizarre to me as I am clearly not getting myself into debt and was only planning to use it for emergencies. It also seems that they didn't value my custom at all. Surely it costs them nothing to have a customer with a credit card that has no balance on it?

Of course then my finacee and I then rangled over what was the correct course of action in keeping a credit card, as I want it for emergency purposes only but not to run up huge debts on. And of course to spend on it then defeats the purpose of saving on a bargain when the interest is added.

So firstly has anybody else run across this?
Secondly what is a good plan to keeping a credit card?
Third do I have a right to complain and ultimately is my credit score going to be affected?

Cheers
Graham
«134

Replies

  • edited 8 May 2013 at 11:26AM
    zx81zx81 Forumite
    35.3K Posts
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Forumite
    edited 8 May 2013 at 11:26AM
    spydersweb wrote: »
    Surely it costs them nothing to have a customer with a credit card that has no balance on it?

    If you don't count the system costs, the residency costs, the recard costs, the annual statement costs and having to reserve funds to your credit limit, then no.

    It's simply loss making to keep dormant accounts on the portfolio.

    The best way to use a card is to use it regularly and pay off in full each month. Hey presto - a working credit card, keep your savings in the bank for longer, no interest, section 75 protection, potential cashback or whatever and an improved credit history.
  • geekonthepcgeekonthepc Forumite
    152 Posts
    Forumite
    Agree with zx81, just get a card and use it occasionally. Pay off the full balance every month and then you've safely got a card that's in use.

    Card companies will start to loose interest in you if you're not even generating them income from using your card and then paying it off.
  • JakeGreenJakeGreen Forumite
    168 Posts
    A credit card is a privilege not a right.

    They have reserved over £4000 ready for you to spend at any time.

    You haven't used even a fraction of that for a number of months so they are perfectly within their rights to close the card.

    Equally, if you have a high limit and only put a few pounds on your card every now and then you may find that they reduce your limit.

    You're costing them money by not using the card, they could lend that money to someone else. There are also costs involved with keeping your account open.

    Most people will recommend that you use a card at least once every six months so that when the lender reviews your account at least they can see some sort of activity on it.
  • One of my card providers told me that they won't issue me with a new card unless I use the current one within the next two months. I used it and that was the end of it.
  • edited 8 May 2013 at 3:11PM
    pqrdefpqrdef Forumite
    4.6K Posts
    edited 8 May 2013 at 3:11PM
    FD had a different excuse - "unused cards are a security risk". But in their case, they just suggested that I should buy something on the card to stop them closing it. It's on my list now for an annual £5 donation (well there's no need to go mad).

    I don't suppose they'll close a card if there's a balance on it. In fact I've kept a Barclaycard and a Lloyds card open for years by leaving a small credit balance, about £3. It's less hassle than spending and paying off - basically you don't have to do anything.
    "It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis
  • fozmcfcfozmcfc Forumite
    3.1K Posts
    Part of the Furniture Combo Breaker PPI Party Pooper Debt-free and Proud!
    Nothing wrong with this as others have said.

    I expect mine will go the same way, haven't used it for well over a year, nearer to 2 years in fact. They keep trying to tempt me, with balance transfer deals, but the only thing that would get me using the card again, would be a 0% purchase deal.

    My Tesco card has gone through non use, Barclaycard are trying to get me to use their card with a 24 month BT offer, but again I only do purchase deals nowadays.

    The only exception using my Virgin card for a money transfer to bank account.

    It's worth having at least 2 credit cards for emergency and if you are abroad, so I tend to use 2 or 3 cards, every few months at least.
  • ChopperSTChopperST Forumite
    1.3K Posts
    Tenth Anniversary 1,000 Posts Name Dropper
    If you have a credit card you don't use and want for emergencies why not get one of the cashback cards that you can use regularly, clear in full every month and get paid for what you buy anyway?
  • pqrdef wrote: »
    FD had a different excuse - "unused cards are a security risk". But in their case, they just suggested that I should buy something on the card to stop them closing it. It's on my list now for an annual £5 donation (well there's no need to go mad).

    I don't suppose they'll close a card if there's a balance on it. In fact I've kept a Barclaycard and a Lloyds card open for years by leaving a small credit balance, about £3. It's less hassle than spending and paying off - basically you don't have to do anything.

    I had a credit balance on mine. But their issue was sending out a new card when I hadn't used the old one.

    Can just buy a newspaper to keep it in use. Not sure why some choose to make a drama over using a CC to keep it open.
  • pqrdefpqrdef Forumite
    4.6K Posts
    I had a credit balance on mine. But their issue was sending out a new card when I hadn't used the old one.
    That's what surprised me. Barclaycard and Lloyds didn't just leave the accounts to fester, they kept sending me the new cards.

    Cahoot also sent me a totally unexpected new card when I hadn't used the old one for years, and hardly ever at all.
    "It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis
  • FOREVER21FOREVER21 Forumite
    1.7K Posts
    Energy Saving Champion I've been Money Tipped!
    This seems to be common practice took out a John Lewis card for a large purchase, paid off debt and no further use for a year. Got letter from them saying if no further purchases then card would be cancelled.
    Hey Ho !! their loss as I point out to them when they frequently try to get me to take out one of their cards when they have a promotion.:)
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