HSBC closed CC due to inactivity!!???

[disneynutt]

I had DH call HSBC today because I wanted him to see if he could get a line of credit increase on his CC. He's been an HSBC cardholder for over 3 years. So, he called and was told that his account was closed on Monday, July 9th. I was very confused - so I prompted him to ask who closed it. He asked for a supervisor and she told him that because his account hadn't been used in a while (around 7 months), it was closed.

Apparently the computer system they use automatically closes accounts after 4 months of inactivity. The timing makes no sense to me (it automatically shuts you off after 4 months of no charges, yet it seems to have waited 7 months), but we did pay off the CC on December and haven't done anything with it since.

The funny part is, we just received those "convenience checks" in the mail yesterday. When asked about that, we were told that the marketing department handles those and they have no way to check if an account is active.

The only way to re-instate his CC is to re-apply! I told him we're walking away from HSBC and never looking back.

Have you ever heard of such a ridiculous thing? I guess it's a bad idea to "sock drawer" a CC in case they wind up closing you due to inactivity!

[sweeps]

That's not uncommon. The CC company loses money on customers that aren't making charges and have no balance being carried month to month. Not to say it's right -- just that it happens a lot.

[Newbie]

Wow, the EXACT same thing happened to me last week with an HSBC card. It had a $1000 limit and a zero balance so I requested a higher limit just for the heck of it.

They closed the account the next day and when I called, they said it was due to inactivity (I used it twice since I opened it a year ago)

Maybe it's a security feature cos they're wondering why folks who don't use the cards suddenly want a higher limit?

[JanH]

I was thinking the same thing. I wonder if they worry that a security problem is involved when a charge appears after a longish absence. I guess we need to charge something small every couple of months and pay it off immediately to keep the cards active?

[humandraydel]

I have had a credit card transaction denied before. I called to see why and they said it was for security reasons since I hadn't used the card in a few months and the transaction was not in the city I lived in. It was annoying, but better safe than sorry, I guess.

[Like2Plan]

Originally Posted by Newbie

Wow, the EXACT same thing happened to me last week with an HSBC card. It had a $1000 limit and a zero balance so I requested a higher limit just for the heck of it.

They closed the account the next day and when I called, they said it was due to inactivity (I used it twice since I opened it a year ago)

Maybe it's a security feature cos they're wondering why folks who don't use the cards suddenly want a higher limit?

Newbie,
I would think that a security feature would cause them to freeze your account until you talked with the fraud dept...but then, they should have asked you verification questions at the time you were raising the limit.

I think it is really strange that they close the account after such a relatively short period of inactivity (ie- 4 months for the OP). I can't verify this, but I heard that it costs a bank about $200.00 to attract a new customer--if this is so, this is costing HSBC a lot of money to close accounts.

My worry would be how does this show up on your credit report?

The only positive I can think of is you could apply for a different card and receive an incentive for applying. There are tons of cards out there. Chase has an offer right now for a Marriott card where they give you a free night's stay (cat1-4) plus 20000 points (after you use the card once) and Marriott elite status and waive the first years' annual fee (Maybe that is where they get the on average $200.00 cost to attract new customers?)

[disneynutt]

Originally Posted by Newbie

Maybe it's a security feature cos they're wondering why folks who don't use the cards suddenly want a higher limit?

I guess I can understand that reasoning. However, it still doesn't sit well that they can't re-activate the card if asked by the consumer. When I worked in a bank, we would flag an account after 6 months of no activity. Wouldn't close it, just procedurally it would be more questions asked when the customer came into the bank for a transaction. We'd always send a letter when it was nearing the 6 month mark and if they did one transaction - in or out - the account would be unflagged. I don't understand why they couldn't do the same thing in this case.

And supposedly they mailed out a letter the same day they closed it. I don't understand why they wouldn't give us a heads up that they were closing it. Not a big loss - I just won't be using HSBC for anything in the future.

Originally Posted by Like2Plan

I think it is really strange that they close the account after such a relatively short period of inactivity (ie- 4 months for the OP). I can't verify this, but I heard that it costs a bank about $200.00 to attract a new customer--if this is so, this is costing HSBC a lot of money to close accounts.

My worry would be how does this show up on your credit report?

This is my worry as well. I guess I'll be pulling my husband's credit report next month to make sure everything is kosher.

[disneysteve]

Originally Posted by Like2Plan

I think it is really strange that they close the account after such a relatively short period of inactivity (ie- 4 months for the OP).

I agree. Four months is nothing. I could see them doing it after a couple of years, but not just a few months. We only use our Discover card when they are doing a good 5% cashback bonus (like now for gasoline purchases). Otherwise, we strictly use our Marriott Visa. Months go by without using Discover. They've never closed the account on us.

[simpleyme]

the whole having accounts closed is weird ,i have cards that have not been used in 20 years and the accounts are still open, I have not used my discover in at least 5 years and they keep sending me letters asking me why I do not use it,I have attempted to close accounts with citibank only to find out they are still open
I guess i wont ever bother with HSBC

[disneysteve]

Originally Posted by simpleyme

I have not used my discover in at least 5 years and they keep sending me letters asking me why I do not use it

FYI - You might want to follow up on this. The last time we had a long period of inactivity on our Discover card, they called and offered a $10 cashback bonus if we charged a nominal amount, like $25. I don't remember exactly, but I jumped right on that offer.

[safari]

I have Chase and Citi cards that I haven't used for 3-4 years, but they haven't closed my accounts. I used to have an Associates card, which was my first credit card that I got back in college with a $500 limit. When I got better cards, I stopped using that one, and eventually they sent me a letter that they had closed my account due to inactivity, but my account had been inactive for 4-5 years before they closed it.

[simpleyme]

Originally Posted by disneysteve

FYI - You might want to follow up on this. The last time we had a long period of inactivity on our Discover card, they called and offered a $10 cashback bonus if we charged a nominal amount, like $25. I don't remember exactly, but I jumped right on that offer.

I call and activated my new card a while back, they asked me what they could do to get me to use their card, i was mad at myself that I did not know what to ask for , they said they would give me 5 bucks on a purchase and sent me some coupons that were nothing I would use

i did not use the card so I did not get the credit , so next time I should ask for ten ?

[Mamaw]

Credit cards Companies still send new cards to my husband and he has used his in 6 years because he is dead. we also got a letter offering him a loan. In the letter they said they had done careful research and they could save us money. I wanted to write them back if they had done such careful research they might have noticed he was dead and wouldn't need a loan.

[sweeps]

I am sorry for your loss, but your comment made me laugh. I envision a new TV commercial...

Bad credit?! No credit?! Not even alive?! Don't worry, you can still get a loan!! Call now!!

[disneysteve]

Originally Posted by simpleyme

i did not use the card so I did not get the credit , so next time I should ask for ten ?

I honestly don't recall exactly what they offered. It might have been $5 on the first purchase. Whatever it was, it was free money so I took it and used the card to get it. Free money is free money.

[disneysteve]

Originally Posted by Mamaw

they said they had done careful research

Love this. You've got to wonder how "careful" that research was if it failed to turn up that minor detail that he had passed away 6 years earlier. I guess he still has good credit, though.

Have you ever ordered a credit report in his name since he died? You might want to do that and make sure nobody borrowed his identity. I've read of cases where that happened.

[neatdesign]

Originally Posted by Mamaw

Credit cards Companies still send new cards to my husband and he has used his in 6 years because he is dead. we also got a letter offering him a loan. In the letter they said they had done careful research and they could save us money. I wanted to write them back if they had done such careful research they might have noticed he was dead and wouldn't need a loan.

It's very possible (perhaps probable) that the credit bureaus are unaware that he is deceased, and that's why he continues to receive offers. You might consider sending them letters and copies of the death certificate so that they know and can update their records.

When I worked for a credit card company, on VERY rare occasions (although they DID happen) I'd get calls from people who'd applied for a credit card and got letters saying they were denied because they were listed as "deceased" on their credit reports. Obviously they weren't, but that just goes to show you what kinds of things can happen when there are errors on credit reports. In your late husband's case, my guess is that it's the opposite problem -- he's not listed as deceased when he should be.

~ Jenney

[jamai]

its crazy that they're willing to loose customers in such a silly manner!
come to think of it, its actually better than some banks who instead charge you for innactivity.

[disneynutt]

How long do you think it will take for us to receive our letter of cancellation? Supposedly they mailed it on the day I made the initial post. I don't think it takes 9 days for mail to get anywhere anymore - unless they sent it via pony express. We still haven't recieved any word of the closure.