A Negative Side Effect to Paying Down Credit Cards

September 17, 2007 by Marcel

About six months ago, my wife and I sent the final payments into our two biggest credit cards. We had struggled with the credit card debt for the better part of five years, but, with the help of a large bonus and other miscellaneous cash, we were able to crush the remainder in one fell swoop. This would be the end of our dealings with the credit card companies, right? Wrong.

Last Friday I received yet ANOTHER set of cash advance checks to use for “special vacations or emergencies.” They keep telling me that “because of my strong financial history” they are offering me this great deal of quick cash at “only” 14.99%. Only 14.99%? I have kindly called them several times explaining that I didn’t have any use for their money anymore, and that they could stop sending these checks for security purposes. Each assures me that I will receive no more mailings, and, for good measure, attempts to convince me that I should do a balance transfer or increase my credit line. Uh, yeah, go ahead and increase it, so you look even more ridiculous with a $0 balance on a $40,000 credit line.

My biggest beef with these guys is not that they’re out to make a buck. Where I get angry is that every customer service representative seems to solve the problem, but I find out later they were unsuccessful. It is just too large a risk to have checks coming in the mail that could be used to throw me right back into debt. I’ve already stopped nearly all credit card offers using OptOutPreScreen.com. Why can’t they follow suit and just stop?

Has anybody else had any luck in stopping these mailings?

14 Comments

Randy Peterman said

am September 17 2007 @ 11:06 am

What you need to do is close down the card accounts. If you kill the accounts they will no longer send you the checks. Once I pay off my discover card that’s exactly what I’m going to do. To kill the argument out of the employees told not to let you close the account: Tell them Dave Ramsey sent you. That apparently works 99.999% of the time.
Brian said

am September 17 2007 @ 12:05 pm

Randy – thanks for the suggestion. My only concern for closing them down completely is that they are large credit lines, and I am unsure of the effect they will have on my credit rating. One card I’ve had for around 10 years (which plays into the Length of Credit History criteria) and has a maximum limit of ~$38,000 (which plays into the utilization or Amounts Owed criteria).

Check out my previous post http://www.financialdominance.com/capital-one-to-report-credit-limits/ that has a nice graphic of the criteria on it.
Pinyo said

am September 17 2007 @ 9:52 pm

Shredder is your friend. That’s all I am able to do so far. Closing the account will hurt your credit score because of lower credit line and credit history.

By the way, very nice new look.

PS: You may want to kill those 2 trackbacks because they are spam.
Debt Free Revolution said

am September 17 2007 @ 10:53 pm

I agree with Randy…close the accounts! Since the fools obviously can’t “fix” the problem, then you should give them the boot, and specify that it should read “closed by customer due to company’s incompetence!” on your credit report
glblguy said

am September 18 2007 @ 10:51 am

I just shred them and use the “shreddings” to light our outdoor fireplace Makes good packing material for eBay stuff and gifts too!

I think credit scores of over rated, so I wouldn’t worry about it.
Erabulus said

am September 23 2007 @ 4:33 am

Regarding the cards you aren’t using, I would worry more about having several open lines of credit, than about closing them down.

Lenders sometimes look at the amount of available credit when considering a loan, so having a bunch of different consumer credit lines with no balance can actually be a black mark. To the lender that means you have the potential to get into trouble quite quickly, and are therefore higher risk.
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Brian said

am September 23 2007 @ 11:28 am

Erabulus: It’s definitely a difficult balancing act between having enough credit versus too much credit. I do sometimes use one of the cards (the one with the high balance) just to maintain a transaction history, but I suppose I could cancel the others.
Credit Cards said

am October 11 2007 @ 4:36 am

Hey…I agree your image on credit history is good. You are hoping good credit. So don’t be close the account still wait for another credit companies is offering good credit for that.
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Michael said

am January 19 2008 @ 4:18 am

Seriously, if one is facing problem with credit cards which he use, then immediate action is just to close the account of that credit cards. Its a good step rather paying extras for your credit card, which is just unnecessary expense. Closing account can be the right step in such cases.
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am September 5 2008 @ 3:41 pm

I think that early cash can be useful if it is needed in many cases. It is up to the person to be responsible not to use the credit cards or checks if they don’t need them.
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am October 31 2008 @ 8:46 am

Lenders sometimes look at the amount of available credit when considering a loan, so having a bunch of different consumer credit lines with no balance can actually be a black mark.
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am December 26 2008 @ 3:18 am

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