Credit Card Vendor change, any impact upon personal credit rating??? Your thoughts please

catch22

Morn'in,
Received notification today that our long time credit card vendor has either sold or otherwise their credit card operations, and B of A will be the new vendor. We have no desire to have any financial connections with B of A.
The vendor swap will take place in October; and our plan will be to open a new credit card account with a local and financially strong credit union prior to this change in vendors.
Our credit rating is at the very top of the rating score; but I recall reading in the past that the score may change when the rating agencies see cc account changes. Are any of you aware of any impact with a cc change upon one's credit rating score?
I thank you in advance for your thoughts.
Regards,
Catch

Old_Joe

Hi Catch-

Same here re credit rating. Have acquired a couple of new cards within past year or so for various reasons not having to do with running charge balances (ie: Amazon card, because of good offer of free "points" for getting it). No impact on ratings.

OJ

icyone

It is my impression that this should not impact, but that it may be best to just keep the BoA card for a while until you have a "history" with the new card. This may be more important if you do not have numerous cards (I have exactly 3), and particularly if you have a long history with the old card.

FWIW, I share your opinion -- have been a local credit union member & card holder for over 40 years, as well as customer of a local bank. (And BTW my mortgage was never sold, either, and when I bought my first car with a loan from the credit union and paid it off early, they did not use the screwy interest calculations used by most banks to penalize early pay-offs. ) I have never had any desire to deal with huge "national" banks, whether BoA or any other. 'nuff said.

hank

Shouldn't change anything. Biggest ingredient (among others) is the % of available credit actually used by you compared to your available line. Example 1 - You have just 2 credit cards or other "open" (revolving) lines of credit with a total "limit" of $15,000. You have long carried from month to month a balance of $10,000 and you often charge up close to the max before paying some of it down. You're a danger to yourself and possibly creditors & likely will have a low or marginal credit score. Example 2 - You have 3 such lines of credit with a total "limit" of $50,000. You typically run the balance up to around $5,000 - and than routinely pay this down to 0 or a much lower amount. You're an excellent credit risk & will likely have a high score - provided there's nothing else out of line in your history. In a nutshell it's best to have a high credit limit and than use only a fraction of it.

One other thing - frequent credit "inquiries" can ding your rating. I suppose it suggests to them that your "tapped out" and looking around for more credit. A certain number, however, is considered "normal" - and I've been told that when you run a check on your own it's not counted as an inquiry the way it would be if submitted by a potential creditor.

MikeM

Actually, I think it does affect your credit slightly negative for kind of the reason Hank stated. The total of your total available credit limits is the denominator and the outstanding debt the numerator. If you remove available credit from the denominator your percentage of debt to available credit increases. Bad for the score.

Don't quote me on this, but I think your credit score is affected - negatively.

I suppose if you replace the card with the same credit line it's probably a wash.

icyone

Re: MikeM That would be the reason for not actually cancelling the undesired/BoA card immediately, especially if you have only 2-3 cards. Guess I didn't make that point clearly. I'd just set it aside, & when things settle down, look at the potential effect of cancellation, & pick your timing to cancel it. If you always pay the balance every month it probably affects things much less anyway because you don't "have" an outstanding balance.

MikeM

http://moneyover55.about.com/od/managingdebt/a/creditscore.htm

Hi icyone. I agree with you. I was responding to catch's original question, would canceling the credit card affect the score.

Catch, above I linked an article from money magazine. #2 on their list was what I was trying to convey. I remembered later that was where I saw the debt to credit line statement.

hank

Reply to @MikeM: Hi Mike. I didn't get the impression Catch's total line of credit would diminish any - just a switch in vendors. Otherwise, agree with you.

hank

Maybe should add that don't think loading up on credit cards in an attempt to boost your score a good idea. We're fussy - so just have 1 card from a local bank we've long liked. Nice for travelling, reserving cars, rooms, etc. As a backup, have couple debit cards linked to our bank accounts with cc logos & could use them as credit cards in a pinch. We "fired" Citi years ago & cancelled their card because they would use our legitimate calls regarding problems with specific retailers to try to hard-sell us products or services. I think they have a right to sell their products, but not to co-mingle this with legitimate account inquiries. fwiw

catch22

Howdy Old_Joe,
Thank you for your note about this.....good news.
Take care,
Catch

catch22

Howdy icyone,
First, thank you for your thoughts about this situation.
We have an excellent history with this current card back to 1979.
As you too noted; our preference is to maintain and support our local
bank and CU's; all of whom are in very good financial condition. I do
and have known several folks for many years at the bank we have acct's. with and the consideration is the possible sale of this bank within this year. I suspect this may be a real event. Thus the credit union thought and also, we may indeed take advantage of a Fidelity credit card, which has lots of nice aspects and would further tie us into our long time, existing Fidelity accts.
The likely scenario is to determine with the cu and Fidelity as to setting a limit on a new card to match our current limit; although we have never hit that limit. We never run a balance, with all due amounts paid in full monthly.
Obtaining a new card now from one of these two, establish the card with charges and full payments; and then cancel the existing card prior to the swithch to B of A, appears to be the plan going forward.
Take care,
Catch

catch22

Howdy hank,
Thank you for your thoughts about all of this with your posts. Likely will obtain a new card now from the cu or Fidelity, let the card be happy for a few months and then cancel the card that is moving to B of A sometime in September.
Take care,
Catch

catch22

Howdy MikeM,
Thank you for the link and your thoughts about all of this situation. I suspect this event is common for some folks; but we have not encountered this before.
Take care,
Catch