Money Talk: Credit card accounts are difficult to reopen
June 21, 2009
Dear Liz: My credit card issuer has informed me that it is closing my account due to inactivity. I’ve been a customer since 1993 and used the account extensively until two years ago, when I decided to get my financial life in better order and stopped charging purchases to this card.
I don’t want to lose this financial resource or have my credit score affected. I talked to an account manager about reopening the account and offered to make a balance transfer with a guaranteed monthly charge for my health club fees, but he said he could do nothing — the bank had made the decision to eliminate inactive accounts.
What can I do to reverse this decision? Whom should I contact at the bank and what should I say?
Answer: Credit card issuers don’t seem to be interested in reopening closed accounts, even for formerly loyal customers.
In the past, issuers were willing to keep these accounts open, hoping you would return. These days, however, credit card companies are trying to reel in lines of credit wherever possible, and inactive accounts are an easy place to do so.
If you have several other credit card accounts, the damage to your credit score is likely to be minimal. If you’re concerned about not having enough access to credit, though, consider opening another account. This, too, can put a ding on your score, but the damage is likely to fade quickly.
If you have any other cards you’re not using, consider keeping them active by using them to pay those health club fees and other monthly costs. Pay the balance in full every month: You don’t need to pay interest to have access to credit and healthy scores.
Dear Liz: My husband signed up for a time share when we were on vacation, just months before we bought our first home. Now, one year later, with a baby on the way, this time share is taking $189 a month out of our pockets plus $2,828 a year for maintenance fees.
This is dragging us down financially, and no one can tell us how to get rid of it! Please, please tell me how.
Answer: You can try to sell your time share, but typically there are far more desperate sellers than there are buyers for these “opportunities.”
At best, you’ll reap only a fraction of what you originally paid, and you may have to in essence give away the time share to anyone willing to pay the maintenance fees.
You’ll still need to pay off the loan you used to buy the time share, or you’ll risk damage to your credit.
You can learn more about selling time shares from the Timeshare Users Group, at tug2.com.
If you haven’t already done so, it’s time to have a chat with your spouse about impulse purchases. Many happily married couples learn to discuss all purchases above a certain dollar amount, such as $100. They certainly don’t enter into long-term commitments without advance discussion and the agreement of both partners.
Liz Pulliam Weston is the author of the book “Your Credit Score: Your Money and What’s at Stake.” Questions for possible inclusion in her column may be sent to 3940 Laurel Canyon Blvd., No. 238, Studio City, CA 91604, or via the “Contact Liz” form at www.asklizweston.com. Distributed by No More Red Inc.