Your % credit available to you matters. They like you to keep credit utilization to 30%. If you have 3 credit cards with 10k credit limit each, and you have 3k balance on 2 credit cards then your usage is 6K/30K = 20%. If you were to cancel one credit card without any balance on it (because you are not using it) then your credit usage would be 6K/20K = 30%, and that would be bad.
Interest rate is irrelevant if you pay them off every month. I only have rewards cards so they all have higher rates but since I don’t carry a balance it does not matter.
The most likely reason for your credit score to drop like you describe is credit utilization. If you’re carrying a balance pay it off and watch your score climb over the next month or two.
You should get the free Credit Karma and Credit Sesame apps to keep track of changes to your credit. Transunion is the agency that I find is used the least by creditors.
- It's not available credit but proportion charged to total available credit.
- Yes, closing an account changes total available downwards. So what you do charge is a higher proportion. I reported an account not mine and it tweaked my score temporarily.
- Paying the full balance on time, not carrying charges, does mean they earn less (or nothing) off you.
- I doubt it's age or the medical. More likely, I suspect AmEx needs more profit and made some sweeping policy changes to a category of users.
- You're too young for any age penalty, imo.
But the kicker is what jym said, you aren’t paying interest, so does it matter?
Try Credit Karma which is free and comes to your email once/month or so and will explain what affects the credit score or a change. I think it’s Transunion and Experian. Easy.
If you cancel that card, your credit score is going to go down even more.
As I said I don’t care one bit what the interest rate is, it has no relevance to me. I only care about what my credit cards can do for me. I get the most value from my chase sapphire reserve. The $450/year cost has been totally worth it since I get $300 back in travel credits ( that includes money spent t on my commuter train ride so I get it back within a very short period. )The 3xpoints on travel and restaurants add up to thousands of dollars a year to me in money back. (I get to charge business travel and restaurants on my card). The other card of value to me is my Amex blue. The $95 cost is more than offset By’6 percent back on groceries and 3 percent back at gas stations as well as department stores like Nordstrom and Khols. I figure I get about 500 plus back a year.
I use only one card that costs to own, but because it give me a free companion ticket every year that is worth more than the cost of the card. Otherwise I dont pay to have a credit card.
I don’t pay for any of our credit cards. We get enough back via rewards to cover an awful lot… before graduation it used to totally or almost totally pay for college books. Now I have to figure out what I want to use the points on as youngest graduated last May. My most used card is a credit union card. I suppose I’m thinking I’ll just make that one totally primary and skip using AE since both offer rewards and AE has me pissed, but not cancelling it does sound like it’s in my best interest.
Correct me if I’m wrong, but the companies earn money when one uses them via the fees they get from the seller, no? If so, they earn enough from my usage that they don’t need annual fees. Interest from not paying back the complete balance is just another source of income for them.
Another here who has no idea what my credit card interest rate is. I put all expenses possible on credit cards and never carry a balance. I refuse to pay any annual fees, but instead make money on my cards. Once a year I redeem points for cash back, enough to pay our homeowners insurance last year. My cards pay me. I also quit worrying about credit scores a few years back since, due to a series of fortuitous and unexpected events, we won’t need to apply for any more loans. We don’t have a perfect credit score. No idea why. It doesn’t impact us anymore than the credit card interest rate. So I find other things to worry about instead. 
As mentioned above, the store cards are likely the reason for the change. Part of your FICO score is based on credit utilization and without that amount of available in your “credit denominator”, it shrinks and your utilization rises. You may want to check your other two credit agencies (Equifax & Experian) to see what is on your record. You can’t just rely on TransUnion. It is my understanding that anything above 720 is considered excellent credit, so you might want to dig into your record to see where a change would have occurred.
I only pay for credit cards that pay me at least 4x what the card costs me. I’ve never had a card that does for me what the sapphire reserve does. But that’s mostly because I charge business travel there.
Additional thoughts. I have no idea of the details, but a friend with cash flow issues, due to kids in college, told me she put her credit card balance/debt on one of those “zero interest for a year” cards. My impression was that she was able to pay it off before being required to pay any interest.
Other friends take advantage of cards that offer thousands of points for signing up, use them for travel, and cancel when the annual fee becomes due. Too complicated for me. I wonder if that impacts their credit scores.
Sign up with creditkarma.com and creditsesame.com. You can monitor your accounts there. The sites show where the “weaknesses” in your credit score are. Also you can download the Experian app and get similar. But the other two have more info.
I’ve had an AmEx for 20+ years and have never been charged interest. Traditionally Amex required you pay the full balance each month and if you were late you were charged a late fee but no interest. Did you opt-in to extended payments or something? If so, perhaps you can opt-out?
^^^Same here—I have an Amex card and so does my H (separate account). I have never been charged interest. H pays an annual fee on his card. We keep charge everything we can on it to get travel miles.
I typically monitored my credit score each month because Discover for some years now provides it every month. I had a similar experience several years ago of suddenly dropping for no discernible reason ( granted from well above 800 to 700s), and in a panic I did free credit reports from all agencies, plus signed on to Credit Karma so I can check the other two reporting agencies there.
What I learned was there were no dings on my reports, and the other two scores remained over 800. So I really didn’t ever know why one of them dropped the score. It did bounce back in the next couple months, though.
And yes, I know these are high numbers, but I still found the sudden drop to be worth investigating in case there was a hidden problem somewhere.
This is AE Optima - their true credit card vs their pay it off each month card. No fee. Interest only if a balance is held. Rewards points on purchases. It can sit in my bedside stand and collect dust.
Quite honestly I only kept it during our purge some years back because they were superb helping us with a Toshiba issue when a computer we bought our lad had problems and Toshiba said we had to pay for it to be shipped/fixed in spite of the warranty. I never had to contact Toshiba again after my first call with them - AE did it all and we didn’t pay a dime to get it fixed. With terrific customer service I thought they were worthy of being kept and used.
It was our highest interest card even then and there are times we keep a balance - esp if we’re traveling and aren’t home for over a month to put more $$ into our checking account. H is self employed and can work from anywhere. He gets paid from clients by check - if he’s not home to get/deposit those checks our account won’t reflect his income until we stop home. I could pull from other sources, but it’s not easy to do so, nor do we earn much from our checking account to make it worth keeping more than a month’s expenses in there compared to investing. So… on some of our travels it’s simply easier to pay the interest on a low interest cc until we get home. We can afford it. I don’t have to try to do the math to the penny to see what hassle would be worth it.
I tended to use this one for travel…it’s in my computer for flights/hotels/cars, etc. It was also the card I used with Amazon as the points from it could be used there making books and many Christmas/birthday presents free. Now I will mainly use my other credit card (Visa - accepted in more places - so used all over town, etc). I used that one whenever AE wasn’t accepted anyway.
I just have to modify my “old dog/new tricks” ways. It can be done.
@garland Thanks - it helps to know I’m not alone! I have to wonder if it was a mistake on the reporting end - someone entering figures entering an incorrect one, but maybe it was just due to Bon Ton closing (and Sears) coupled with a month of paying medical bills - not catching that those were paid off later.
I’ll see what happens next month.
In the end it really only changes the card I’m going to choose to use. We’re no longer buying college books so I rarely use Amazon anymore anyway. Christmas should use up the points/credit I have there.
My credit score dropped about 50 points when our car was broken into and we had to cancel all our credit cards and close out bank acct and open new ones. It was still high 700s but certainly added insult to injury. It has crept back up to the low 800s. I’d be livid if they increased our interest rates on any of the cards, especially with a good history with the company. I’d cancel too!
I was going to ask if you used the card for tuition payment and this semester there was none, but it appears that you didn’t use the card for that. You mentioned in other posts that your dad passed away recently, did you share any credit cards or assume any debt through that process?