You know how sometimes you can be surprised about something that you already was expecting to happen. Last week BOA axed all of my wife’s credit cards (and brokerage and eventually her checking/savings accounts.) She had 4 total personal cards and a total CL of close to $100K. She was Plat Honors and had like 175K in Merrill Edge. I actually got no notice from BOA about the closure so far. The only way to tell you were axed, besides your card not working, is that when you log into your account, you won’t see an available credit balance. There is no red banner or anything that denotes your card was closed. The other way to tell is that if your credit card had a $0 balance, it’ll be missing and won’t show up in your list of cards. That’s when I knew something was up.
About a week later, I got a letter from Merril saying her account will be closed in a month and that I should liquidate my stocks. So I’m going to transfer that to Schwab.
What happened? Well I had been cycling the cards about 2-4X per month for the past year. So I thought they were okay with cycling. But then I got greedy and cycled even more the past few months – about 5-8X. But what I think did me in was the big negative balances, which banks hate. Due to the slowness of a certain vendor to post charges, I had a few cards close with like a -$20K or -$30K credit balance lately. So I think it was mostly the negative balances that got me, more so than the cycling. I think if I had kept it to 2-4X and not gone negative, I’d still be alive.
Also, if you ever get axed, you’ll no longer be able to access your past statements. The cards are just gone, like they never existed. I heard you can go in branch and ask for paper statements, which would have been a pain. However, I had a refund come through and when that put my balnce into a negative, I could then go in and download old statements. So find a way to refund back to an axed card if you want previous statements. Or better yet, when you know you got axed, download the statements before paying off the cards.
It took me a few days to get over the axe, but luckily, they don’t go after the household. However, I do hear their axes have a looong memory so that’s a bit painful. I’m going to slow down my cycling on my account because I do like the cards for everyday spend. Also, RIP your pending points so there goes at least $3,000 of rewards on just this one card.
@Christian: “800K a month with BOA alone?!? I have no idea what you’re doing to generate that kind of volume…”. More than likely Costco gold was at least a part of this.
800K a month with BOA alone?!? I have no idea what you’re doing to generate that kind of volume but hats off to you!
What is “cycling the cards”? You use it to get cashback bonus?
It’s when you use a lot to all of your available credit on a card then pay it off very quickly so that the credit line is freed up to make another round of purchases. Each time is considered a cycle so the process is known as cycling.