9 ms·

What happens after a bank closes all of your credit cards?

85 points by ic4l 6y ago

speedgoose 6y ago
The Wikipedia articles about credit scores mention the Chinese social score that is criticized a lot. I think a lot of arguments against the social score are valid against the credit score.
- linuxdesktopfo 6y ago
  Credit score is by far the most dystopian thing for somebody outside the US.
  - Freak_NL 6y ago
    It's a really strange phenomenon to read about. In the Netherlands unpaid debts are registered which affects your ability to get mortgages and other types of loans, but that is about the extent of it, and more of a flag than a score. There is no numeric value you can influence other than not having any open debts (mortgage excluded). Credit cards are really only used for purchases abroad on the internet; the whole notion of using credit cards to build up credit score is… foreign.
    - lotsofpulp 6y ago
      It’s the same thing in the US. Credit cards are popular in the US because due to far higher payment processing, people in the US can earn lots of cash back or other rewards. Of course, many Americans also purchase things by actually using the credit on their credit cards and paying interest on it, but you can easily go through life never paying interest to a credit card company. The numeric value known as a “credit score” is simply a number that someone calculated based on your history of re-paying debts. It can exist in the Netherlands or anywhere, I can even make up my own formula. It’s probably more popular in the US than elsewhere due to its efficiency to evaluate someone’s credit worthiness for a credit card and the US using more credit for regular purchases than elsewhere, but it really isn’t something devious or magical or legislated. For example, a small retailer wants to offer it’s customers credit (i.e. lend them money), but they don’t have the underwriting staff or capability to analyze everyone’s credit history (from their credit reports). Then the small retailer may choose to simply purchase credit scores from a company that does analyze people’s credit history, such as the popular FICO score from the Fair Isaac Corportaion.
  - ValentineC 6y ago
    It's quite amusing how the US focuses so strongly on the separation of powers, but US financial institutions rely so strongly on FICO scores as data points to determine whether to issue credit.
    - tptacek 6y ago
      Those scores replaced a far worse system.
    - Godel_unicode 6y ago
      Separation of powers is a government thing, FICO is a product sold by a private analytics company. It's also not the only score used
    - lotsofpulp 6y ago
      Almost all big financial institutions do not solely rely on FICO scores. They almost all have their own method of scoring. For any large items, such as home mortgages and business loans, I don’t think scores are even used. There’s a person evaluating the applicant to determine if they meet underwriting standards.
      - Spivak 6y ago
        Mortgages definitely use credit scores — they just don’t only use credit scores. Without that data point they would have a hard time evaluating if you’re a good borrower. They can independently evaluate if you could pay your mortgage but not that you actually will.
        lotsofpulp 6y ago
        I specified FICO scores. Mortgage lenders might also use their own credit scores, or credit scores from a different data analytics company. Either way, a score is just a heuristic to avoid wasting underwriter’s time combing through someone’s finances. Once you pass whatever score hurdle a mortgage lender has set, you still have to pass the manual review.
      - 6y ago
  - Godel_unicode 6y ago
    I'm not sure where you're referring to, but virtually all modern economies have an equivalent of credit bureaus for the simple reason that a modern economy cannot function without it. The main difference is that they largely just expose the person's history and let the lender decide, as opposed to trying to distill the whole history into one score to rule them all. Edit: the Dutch bkr, for instance, has recently been sued for charging users to access their database of payment histories. This is important because that record is provided to companies wishing to make credit decisions about an individual. It's also noteworthy that the Dutch in general don't really go in for credit cards the way Americans do, so they interact with that part of the financial system less. That in turn makes for much less interesting "credit reports".
    - jltsiren 6y ago
      In many European countries, credit bureaus only report negative credit history. Most people have empty reports, which is the best possible result. Lenders may ask aggregate statistics about other debt (total debt €X, total payments €Y/month) directly from the person, but they have no right to more detailed reports. Also, it's my impression that people in the US often overestimate the importance of the credit score, as opposed to the detailed credit report. Major lenders tend to use private scoring systems anyway. Far too many people know how credit scores work and how to game the system, making public credit scores less useful than secret scoring systems.
  - throwaheyy 6y ago
    Debtors’ prisons are probably more dystopian.
- nicolas_t 6y ago
  The problem of the Chinese social score is the fact that political behavior online could affect it. So it can create a climate of fear and self censorship. The US credit score while it has its problems at least as well known rules of what impacts it. I know that if I have a good high credit score I can get a mortgage with a decent interest rate whereas, in other countries, there's no score I can check to know what my chances are and no public way to evaluate how banks see me and if they are likely to approve me or not.
  - lotsofpulp 6y ago
    There is no “US credit score”. There are credit reports, as compiled by the 3 credit reporting agencies. Underwriters who purchase these reports are free to use that information in their lending practices, and that could include calculating a specific number. Some companies, such as the Fair Isaac Corporation, sell their analysis of people’s credit reports to others who may want to use them to make lending decisions, including the popular FICO score.
barlo 6y ago
The credit reporting triopoly in the US really needs to be looked at, and likely restructured in some fashion. Three private enterprises should not have this much control over a consumer’s ability to interact with the economy.
- toomuchtodo 6y ago
  As always, call and write your legislators and the CFPB. Regulatory bodies and legislation are the only ways such disenfranchisement get fixed. In this person’s case, they should’ve reported Chase’s actions to their state’s attorney general, their state’s financial services regulatory body, the CFPB, the OCC, and the Federal Reserve, in order to generate a robust and and comprehensive paper trail. Sometimes, this resolves an issue when compliance becomes aware a paper trail has been started. Failing that, it’s easier to hand over reference and case tracking numbers to legislators to reference and obtain documentation directly versus your own complaint package. Also, just don’t use Chase. They’re a garbage too big to fail institution. Lots of better banks out there, but also don’t report security vulnerabilities yourself for your banking relationships. Provide them to an arms length third party to report them who can’t be impacted by retaliatory behavior. (advice provided from personal experiences)
- NovemberWhiskey 6y ago
  You could have a thousand credit rating agencies, and if they all use the same data and the same model, they'll all give the same scores. I don't see how having more of them really helps; nor how having (say) the government operate the service would help.
- chrisco255 6y ago
  Build a decentralized version. If it was built on blockchain you could: 1) save the original agreement in IPFS; 2) encode the payment terms into a smart contract; 3) record all payments on the blockchain as proof of payment. This could all be abstracted from user.
  - fedorareis 6y ago
    How does any of that help though? All you have done is move the existing system to blockchain. But if creditors still want to pull FICO scores to determine if someone is suitable it will still be the same result. Also the ability for information to fall off your credit report over time or for hard inquiries to be grouped together is a feature not a bug. If you went with a blockchain approach that bankruptcy from 11 years ago will always be on your report but with the current system it isn’t there because it is no longer determined to be relevant.
jinkyu 6y ago
just wait until this starts happening due to your social media posts
- colllectorof 6y ago
  People who pay attention know that this is already happening due to social media posts.
  - root_axis 6y ago
    Do you have any examples?
    - Millenialboomer 6y ago
      I highly doubt the veracity of these sources, but I got worried and did a quick internet search: https://nypost.com/2019/05/25/jpmorgan-chase-accused-of-purging-accounts-of-conservative-activists/ https://nypost.com/2019/05/25/jpmorgan-chase-accused-of-purg... I don't have much sympathy for these guys, but if true, there's our precedent.
    - jinkyu 6y ago
      have you heard of gab? he listened when they said "if you don't like Twitter, make your own". now he can't do things like use banks, etc...
lawrenceduk 6y ago
Surely the drop in credit score is attributed to opening a load of accounts in a short space of time - it's something that people generally do when they're desperate for credit so is used as an indicator.
- ic4l 6y ago
  Actually the score already crashed at that point. It was around 620 by the time I got around to opening new cards. I think the crash was mainly due to the length of my average active credit history going from 10 years to 0 years, as I really did only use Chase credit cards.
- fedorareis 6y ago
  It would have crashed from having a credit limit, number of lines of credit, and age of credit of 0 since all of the accounts were closed. If I remember correctly all hard inquiries that happen within a 30 day window get bundled together on your credit report. This allows people to shop around for credit cards when opening a new one without killing your credit score. So opening all of the new cards would have added a hard inquiry but it would have caused the number of lines of credit and average age of credit to start increasing thereby causing the credit score to start rising from the score when all of the accounts were terminated.
maxerickson 6y ago
Is having 5 cards at one bank something a lot of people do? I have less (consumer financial) accounts than that spread across multiple institutions, never mind credit cards.
- ic4l 6y ago
  I opened my 5 cards across the span of 13 years, and was advised to have more credit cards as only having 1 was negatively impacting my credit score. According to Experian the average American has 4 credit cards. Also chase incentivizes you to open up more than one card with their signup bonuses.
  - maxerickson 6y ago
    Yeah, I've been banking for 25+ years, so that isn't really what I was asking about. My main credit card has all sorts of incentives to open more lines that I don't pay any attention to.
  - lupire 6y ago
    > only having 1 was negatively impacting my credit score. Is this a real thing? I've always had 1 card and highest credit score. Having multiple cards seems like a risk of taking on excess debt.
    - leetcrew 6y ago
      your credit score benefits from having a history of managing more than one line of credit. it's debatable how much opening a bunch of credit cards helps with this (in the short term, it actually hurts). ideally you would have a mix of credit cards, a mortgage, and some other type of debt, all of which paid off on time. it's only a moderate impact factor though. having an extremely long history of on-time payments and low overall utilization can still get you an excellent credit score. it just takes longer.
    - DaveExeter 6y ago
      You should have at least 2 credit cards, and not both with the same bank, of course. I had two credit cards with Chase (and an Amex with BoA) when Chase decided that I had died. If it wasn't for the Amex, I would have had some big problems!
sneak 6y ago
Chase is hot garbage. One time they robbed me of all of the money I had in the world: with no evidence whatsoever of any wrongdoing on my part, they charged me a $150 legal fee to process a tax warrant from Indiana and completely emptied my account. Bank accounts are guilty until proven innocent in the USA.
- roflc0ptic 6y ago
  From Chase’s perspective, I think the tax warrant was evidence of your having done some wrongdoing.
  - sneak 6y ago
    Chase charged a fee for their legal team to examine it. There was no basis for the tax claim, and no burden of proof whatsoever upon the people who issued it. It was entirely fictitious. "It's a tax warrant, we process them entirely uncritically, steal the money" is not worth $150.
- lupire 6y ago
  What's a tax warrant?
steelframe 6y ago
We are rapidly approaching a point where you cannot do commerce without a bank card of some sort. My daughter is old enough to walk to the ice cream store with her friends, but they will not sell her any ice cream unless she pays using a card. They are unable to except cash. I tried getting her a card, but none of the local banks would do it, and even the prepaid cards that you buy at supermarkets will not allow you to activate in your name unless you are a certain age. I finally found a card with FamZoo that worked for her, but it was way more difficult than it should have been finding a way for her to legally buy ice cream from that store. I am paying closer attention when I go to a brick and mortar store these days, and I am seeing more and more signs advising customers that their cash is no good there. This is a scourge that is starting to get out of control. My HOA advised me that I would only be able to pay them using a money transfer app. When I tried using it, it rejected my bank account information for some reason. I sent them a check with a letter explaining that their required method of payment didn't work for me. They didn't deposit the check, and then they tried charging me late fees. I had to go out of my way to escalate to resolve that. This is getting to the point that we will need some regulation to protect the right to pay for ordinary things like ice cream and HOA dues with cash and checks.
- Theodores 6y ago
  This is quaint. Some parts of the world - China - bypassed the whole credit card and went to QR codes for payment with your phone. Even in Europe there is progress over the USA. Chip and Pin is all some people have known, the idea that you should have a signature or a cheque is just unimaginable, only old people could remember that. Cash is not without its costs. Bitcoin isn't the answer. The credit cards take a slice of everything, what we really need is a government that can make a payment system work for everyone, the customer and the retailer, with nobody taking their slice or selling your data. It just needs will.
  - lotsofpulp 6y ago
    Supposedly, the US Federal Reserve is working on this: https://www.federalreserve.gov/paymentsystems.htm https://www.federalreserve.gov/paymentsystems.htm
barbazoo 6y ago
I'd just get a new card or two with different banks and wait for the score to go back up. It doesn't take that long and isn't even a big deal unless you're applying for mortgage or something similar. Or am I mistaken?
jkepler 6y ago
Why do we need credit cards, or a credit score? Seems to me we'll all be in better shape if we called them 'debt cards' so we'd be less inclined to load on debt. Can't we architect an asset-based economy, rather than debt-based? It would be more resiliant, and the trifecta of credit reporting agencies wouldn't hold any particular power over our economy.
- prepend 6y ago
  > Why do we need credit cards, or a credit score? So we can reduce risk of default and get lower interest rates. Mortgages sucked a lot before credit scores. Credit scores have many problems, but are pretty useful for getting credit.
- lilactown 6y ago
  I don't understand the dichotomy of asset vs. debt-based economy. AFAICT an asset-based economy is one whose growth is based on appreciation of equity assets[0], rather than creating value via goods or services. In such an economy, debt would be as relevant if not more so, due to the fact that as asset prices rise the only way for many to buy in is to borrow. [0] https://en.wikipedia.org/wiki/Asset-based_economy#:~:text=The%20asset%2Dbased%20economy%20is,as%20well%20as%20real%20estate https://en.wikipedia.org/wiki/Asset-based_economy#:~:text=Th....
- lotsofpulp 6y ago
  > It would be more resiliant, and the trifecta of credit reporting agencies wouldn't hold any particular power over our economy. One might argue that one of the most important factors contributing to the US’ economic power is the existence of a reliable credit (and court) system for lending money, enabling it to grow far quicker than others.
  - barbazoo 6y ago
    Does that include consumer credit cards though? If it had to be backed by assets, people would just spend the money at a different time. I guess the economy would be missing out on all that predatory interest.
netfortius 6y ago
Which is why you should treat the banks and credit cards legally but extremely selfishly: e.g. Sapphire 80K reward points if you open and spend $XX/time_interval = done, then paid in full, no more touch unless promotions, same with Freedom, then move onto CapitalOne Quicksilver ($200 f/$500 spent in 3months), etc., etc. Temporary minute drops in credit score when applying for new card, recover once the balance payments happen in full. And keep an eye on sites like https://www.nerdwallet.com/best/credit-cards/rewards https://www.nerdwallet.com/best/credit-cards/rewards, for any new opportunities.
- ValentineC 6y ago
  > Which is why you should treat the banks and credit cards legally but extremely selfishly I'm doing this with Amex now, ever since one of their customer service reps gave me wrong information about a benefit, I relied on it (it was multiple transactions totalling $300), and Amex (after much investigation) closed the issue by citing their terms and conditions and not having my back, despite customer service saying that they'll always make good on the promise since chats are logged. I used to be a huge fan of Amex and their customer service, but they treat customers like numbers all the same, like every other large financial organization.
underseacables 6y ago
There’s something retaliatory in this, it is a damn shame you cannot sue them. Banks are a lot like human resources, they are not there to help you.
ic4l 6y ago
If anyone wants to read the first HN thread 6 months ago about the termination it's here https://news.ycombinator.com/item?id=24988301 https://news.ycombinator.com/item?id=24988301
pacman2 6y ago
1. Never call a bank if they close your account. They will never give you a reason for legal reasons and their ToS allow closing it. 2. Just open a new one. If you really can't get one, try here: https://myfirstcenturybank.com/ https://myfirstcenturybank.com/ They open Bank Accounts for Russian criminals. Hence, should be hard to open one yourself.
Effortfully 6y ago
Well first you wouldn't be able to access your account, all of the account assets will be frozen, more than likely your credit score will go down.
simonblack 6y ago
Second, PLEASE diversify your credit cards across different financial institutions. ABSOLUTELY. There is an old saying "Never stay with with the same Bank, Insurance Company, or lawyer for more than two years. Otherwise they think they own you." While I think that 'two years' is a little paranoid, I like the overall gist of the saying.
happyjack 6y ago
https://www.cnbc.com/2020/10/19/7point1-million-american-households-didnt-have-a-bank-account-last-year.html https://www.cnbc.com/2020/10/19/7point1-million-american-hou... Just some food for thought.

85 points by ic4l 6y ago

The Wikipedia articles about credit scores mention the Chinese social score that is criticized a lot. I think a lot of arguments against the social score are valid against the credit score.

linuxdesktopfo 6y ago
Credit score is by far the most dystopian thing for somebody outside the US.
- Freak_NL 6y ago
  It's a really strange phenomenon to read about. In the Netherlands unpaid debts are registered which affects your ability to get mortgages and other types of loans, but that is about the extent of it, and more of a flag than a score. There is no numeric value you can influence other than not having any open debts (mortgage excluded). Credit cards are really only used for purchases abroad on the internet; the whole notion of using credit cards to build up credit score is… foreign.
  - lotsofpulp 6y ago
    It’s the same thing in the US. Credit cards are popular in the US because due to far higher payment processing, people in the US can earn lots of cash back or other rewards. Of course, many Americans also purchase things by actually using the credit on their credit cards and paying interest on it, but you can easily go through life never paying interest to a credit card company. The numeric value known as a “credit score” is simply a number that someone calculated based on your history of re-paying debts. It can exist in the Netherlands or anywhere, I can even make up my own formula. It’s probably more popular in the US than elsewhere due to its efficiency to evaluate someone’s credit worthiness for a credit card and the US using more credit for regular purchases than elsewhere, but it really isn’t something devious or magical or legislated. For example, a small retailer wants to offer it’s customers credit (i.e. lend them money), but they don’t have the underwriting staff or capability to analyze everyone’s credit history (from their credit reports). Then the small retailer may choose to simply purchase credit scores from a company that does analyze people’s credit history, such as the popular FICO score from the Fair Isaac Corportaion.
- ValentineC 6y ago
  It's quite amusing how the US focuses so strongly on the separation of powers, but US financial institutions rely so strongly on FICO scores as data points to determine whether to issue credit.
  - tptacek 6y ago
    Those scores replaced a far worse system.
  - Godel_unicode 6y ago
    Separation of powers is a government thing, FICO is a product sold by a private analytics company. It's also not the only score used
  - lotsofpulp 6y ago
    Almost all big financial institutions do not solely rely on FICO scores. They almost all have their own method of scoring. For any large items, such as home mortgages and business loans, I don’t think scores are even used. There’s a person evaluating the applicant to determine if they meet underwriting standards.
    - Spivak 6y ago
      Mortgages definitely use credit scores — they just don’t only use credit scores. Without that data point they would have a hard time evaluating if you’re a good borrower. They can independently evaluate if you could pay your mortgage but not that you actually will.
      - lotsofpulp 6y ago
        I specified FICO scores. Mortgage lenders might also use their own credit scores, or credit scores from a different data analytics company. Either way, a score is just a heuristic to avoid wasting underwriter’s time combing through someone’s finances. Once you pass whatever score hurdle a mortgage lender has set, you still have to pass the manual review.
    - 6y ago
- Godel_unicode 6y ago
  I'm not sure where you're referring to, but virtually all modern economies have an equivalent of credit bureaus for the simple reason that a modern economy cannot function without it. The main difference is that they largely just expose the person's history and let the lender decide, as opposed to trying to distill the whole history into one score to rule them all. Edit: the Dutch bkr, for instance, has recently been sued for charging users to access their database of payment histories. This is important because that record is provided to companies wishing to make credit decisions about an individual. It's also noteworthy that the Dutch in general don't really go in for credit cards the way Americans do, so they interact with that part of the financial system less. That in turn makes for much less interesting "credit reports".
  - jltsiren 6y ago
    In many European countries, credit bureaus only report negative credit history. Most people have empty reports, which is the best possible result. Lenders may ask aggregate statistics about other debt (total debt €X, total payments €Y/month) directly from the person, but they have no right to more detailed reports. Also, it's my impression that people in the US often overestimate the importance of the credit score, as opposed to the detailed credit report. Major lenders tend to use private scoring systems anyway. Far too many people know how credit scores work and how to game the system, making public credit scores less useful than secret scoring systems.
- throwaheyy 6y ago
  Debtors’ prisons are probably more dystopian.
nicolas_t 6y ago
The problem of the Chinese social score is the fact that political behavior online could affect it. So it can create a climate of fear and self censorship. The US credit score while it has its problems at least as well known rules of what impacts it. I know that if I have a good high credit score I can get a mortgage with a decent interest rate whereas, in other countries, there's no score I can check to know what my chances are and no public way to evaluate how banks see me and if they are likely to approve me or not.
- lotsofpulp 6y ago
  There is no “US credit score”. There are credit reports, as compiled by the 3 credit reporting agencies. Underwriters who purchase these reports are free to use that information in their lending practices, and that could include calculating a specific number. Some companies, such as the Fair Isaac Corporation, sell their analysis of people’s credit reports to others who may want to use them to make lending decisions, including the popular FICO score.

barlo 6y ago

The credit reporting triopoly in the US really needs to be looked at, and likely restructured in some fashion. Three private enterprises should not have this much control over a consumer’s ability to interact with the economy.

toomuchtodo 6y ago
As always, call and write your legislators and the CFPB. Regulatory bodies and legislation are the only ways such disenfranchisement get fixed. In this person’s case, they should’ve reported Chase’s actions to their state’s attorney general, their state’s financial services regulatory body, the CFPB, the OCC, and the Federal Reserve, in order to generate a robust and and comprehensive paper trail. Sometimes, this resolves an issue when compliance becomes aware a paper trail has been started. Failing that, it’s easier to hand over reference and case tracking numbers to legislators to reference and obtain documentation directly versus your own complaint package. Also, just don’t use Chase. They’re a garbage too big to fail institution. Lots of better banks out there, but also don’t report security vulnerabilities yourself for your banking relationships. Provide them to an arms length third party to report them who can’t be impacted by retaliatory behavior. (advice provided from personal experiences)
NovemberWhiskey 6y ago
You could have a thousand credit rating agencies, and if they all use the same data and the same model, they'll all give the same scores. I don't see how having more of them really helps; nor how having (say) the government operate the service would help.
chrisco255 6y ago
Build a decentralized version. If it was built on blockchain you could: 1) save the original agreement in IPFS; 2) encode the payment terms into a smart contract; 3) record all payments on the blockchain as proof of payment. This could all be abstracted from user.
- fedorareis 6y ago
  How does any of that help though? All you have done is move the existing system to blockchain. But if creditors still want to pull FICO scores to determine if someone is suitable it will still be the same result. Also the ability for information to fall off your credit report over time or for hard inquiries to be grouped together is a feature not a bug. If you went with a blockchain approach that bankruptcy from 11 years ago will always be on your report but with the current system it isn’t there because it is no longer determined to be relevant.

jinkyu 6y ago

just wait until this starts happening due to your social media posts

colllectorof 6y ago
People who pay attention know that this is already happening due to social media posts.
- root_axis 6y ago
  Do you have any examples?
  - Millenialboomer 6y ago
    I highly doubt the veracity of these sources, but I got worried and did a quick internet search: https://nypost.com/2019/05/25/jpmorgan-chase-accused-of-purging-accounts-of-conservative-activists/ https://nypost.com/2019/05/25/jpmorgan-chase-accused-of-purg... I don't have much sympathy for these guys, but if true, there's our precedent.
  - jinkyu 6y ago
    have you heard of gab? he listened when they said "if you don't like Twitter, make your own". now he can't do things like use banks, etc...

lawrenceduk 6y ago

Surely the drop in credit score is attributed to opening a load of accounts in a short space of time - it's something that people generally do when they're desperate for credit so is used as an indicator.

ic4l 6y ago
Actually the score already crashed at that point. It was around 620 by the time I got around to opening new cards. I think the crash was mainly due to the length of my average active credit history going from 10 years to 0 years, as I really did only use Chase credit cards.
fedorareis 6y ago
It would have crashed from having a credit limit, number of lines of credit, and age of credit of 0 since all of the accounts were closed. If I remember correctly all hard inquiries that happen within a 30 day window get bundled together on your credit report. This allows people to shop around for credit cards when opening a new one without killing your credit score. So opening all of the new cards would have added a hard inquiry but it would have caused the number of lines of credit and average age of credit to start increasing thereby causing the credit score to start rising from the score when all of the accounts were terminated.

maxerickson 6y ago

Is having 5 cards at one bank something a lot of people do? I have less (consumer financial) accounts than that spread across multiple institutions, never mind credit cards.

ic4l 6y ago
I opened my 5 cards across the span of 13 years, and was advised to have more credit cards as only having 1 was negatively impacting my credit score. According to Experian the average American has 4 credit cards. Also chase incentivizes you to open up more than one card with their signup bonuses.
- maxerickson 6y ago
  Yeah, I've been banking for 25+ years, so that isn't really what I was asking about. My main credit card has all sorts of incentives to open more lines that I don't pay any attention to.
- lupire 6y ago
  > only having 1 was negatively impacting my credit score. Is this a real thing? I've always had 1 card and highest credit score. Having multiple cards seems like a risk of taking on excess debt.
  - leetcrew 6y ago
    your credit score benefits from having a history of managing more than one line of credit. it's debatable how much opening a bunch of credit cards helps with this (in the short term, it actually hurts). ideally you would have a mix of credit cards, a mortgage, and some other type of debt, all of which paid off on time. it's only a moderate impact factor though. having an extremely long history of on-time payments and low overall utilization can still get you an excellent credit score. it just takes longer.
  - DaveExeter 6y ago
    You should have at least 2 credit cards, and not both with the same bank, of course. I had two credit cards with Chase (and an Amex with BoA) when Chase decided that I had died. If it wasn't for the Amex, I would have had some big problems!

sneak 6y ago

Chase is hot garbage. One time they robbed me of all of the money I had in the world: with no evidence whatsoever of any wrongdoing on my part, they charged me a $150 legal fee to process a tax warrant from Indiana and completely emptied my account. Bank accounts are guilty until proven innocent in the USA.

roflc0ptic 6y ago
From Chase’s perspective, I think the tax warrant was evidence of your having done some wrongdoing.
- sneak 6y ago
  Chase charged a fee for their legal team to examine it. There was no basis for the tax claim, and no burden of proof whatsoever upon the people who issued it. It was entirely fictitious. "It's a tax warrant, we process them entirely uncritically, steal the money" is not worth $150.
lupire 6y ago
What's a tax warrant?

steelframe 6y ago

We are rapidly approaching a point where you cannot do commerce without a bank card of some sort. My daughter is old enough to walk to the ice cream store with her friends, but they will not sell her any ice cream unless she pays using a card. They are unable to except cash. I tried getting her a card, but none of the local banks would do it, and even the prepaid cards that you buy at supermarkets will not allow you to activate in your name unless you are a certain age. I finally found a card with FamZoo that worked for her, but it was way more difficult than it should have been finding a way for her to legally buy ice cream from that store. I am paying closer attention when I go to a brick and mortar store these days, and I am seeing more and more signs advising customers that their cash is no good there. This is a scourge that is starting to get out of control. My HOA advised me that I would only be able to pay them using a money transfer app. When I tried using it, it rejected my bank account information for some reason. I sent them a check with a letter explaining that their required method of payment didn't work for me. They didn't deposit the check, and then they tried charging me late fees. I had to go out of my way to escalate to resolve that. This is getting to the point that we will need some regulation to protect the right to pay for ordinary things like ice cream and HOA dues with cash and checks.

Theodores 6y ago
This is quaint. Some parts of the world - China - bypassed the whole credit card and went to QR codes for payment with your phone. Even in Europe there is progress over the USA. Chip and Pin is all some people have known, the idea that you should have a signature or a cheque is just unimaginable, only old people could remember that. Cash is not without its costs. Bitcoin isn't the answer. The credit cards take a slice of everything, what we really need is a government that can make a payment system work for everyone, the customer and the retailer, with nobody taking their slice or selling your data. It just needs will.
- lotsofpulp 6y ago
  Supposedly, the US Federal Reserve is working on this: https://www.federalreserve.gov/paymentsystems.htm https://www.federalreserve.gov/paymentsystems.htm

barbazoo 6y ago

I'd just get a new card or two with different banks and wait for the score to go back up. It doesn't take that long and isn't even a big deal unless you're applying for mortgage or something similar. Or am I mistaken?

jkepler 6y ago

Why do we need credit cards, or a credit score? Seems to me we'll all be in better shape if we called them 'debt cards' so we'd be less inclined to load on debt. Can't we architect an asset-based economy, rather than debt-based? It would be more resiliant, and the trifecta of credit reporting agencies wouldn't hold any particular power over our economy.

prepend 6y ago
> Why do we need credit cards, or a credit score? So we can reduce risk of default and get lower interest rates. Mortgages sucked a lot before credit scores. Credit scores have many problems, but are pretty useful for getting credit.
lilactown 6y ago
I don't understand the dichotomy of asset vs. debt-based economy. AFAICT an asset-based economy is one whose growth is based on appreciation of equity assets[0], rather than creating value via goods or services. In such an economy, debt would be as relevant if not more so, due to the fact that as asset prices rise the only way for many to buy in is to borrow. [0] https://en.wikipedia.org/wiki/Asset-based_economy#:~:text=The%20asset%2Dbased%20economy%20is,as%20well%20as%20real%20estate https://en.wikipedia.org/wiki/Asset-based_economy#:~:text=Th....
lotsofpulp 6y ago
> It would be more resiliant, and the trifecta of credit reporting agencies wouldn't hold any particular power over our economy. One might argue that one of the most important factors contributing to the US’ economic power is the existence of a reliable credit (and court) system for lending money, enabling it to grow far quicker than others.
- barbazoo 6y ago
  Does that include consumer credit cards though? If it had to be backed by assets, people would just spend the money at a different time. I guess the economy would be missing out on all that predatory interest.

netfortius 6y ago

Which is why you should treat the banks and credit cards legally but extremely selfishly: e.g. Sapphire 80K reward points if you open and spend $XX/time_interval = done, then paid in full, no more touch unless promotions, same with Freedom, then move onto CapitalOne Quicksilver ($200 f/$500 spent in 3months), etc., etc. Temporary minute drops in credit score when applying for new card, recover once the balance payments happen in full. And keep an eye on sites like https://www.nerdwallet.com/best/credit-cards/rewards https://www.nerdwallet.com/best/credit-cards/rewards, for any new opportunities.

ValentineC 6y ago
> Which is why you should treat the banks and credit cards legally but extremely selfishly I'm doing this with Amex now, ever since one of their customer service reps gave me wrong information about a benefit, I relied on it (it was multiple transactions totalling $300), and Amex (after much investigation) closed the issue by citing their terms and conditions and not having my back, despite customer service saying that they'll always make good on the promise since chats are logged. I used to be a huge fan of Amex and their customer service, but they treat customers like numbers all the same, like every other large financial organization.

underseacables 6y ago

There’s something retaliatory in this, it is a damn shame you cannot sue them. Banks are a lot like human resources, they are not there to help you.

ic4l 6y ago

If anyone wants to read the first HN thread 6 months ago about the termination it's here https://news.ycombinator.com/item?id=24988301 https://news.ycombinator.com/item?id=24988301

pacman2 6y ago

1. Never call a bank if they close your account. They will never give you a reason for legal reasons and their ToS allow closing it. 2. Just open a new one. If you really can't get one, try here: https://myfirstcenturybank.com/ https://myfirstcenturybank.com/ They open Bank Accounts for Russian criminals. Hence, should be hard to open one yourself.

Effortfully 6y ago

Well first you wouldn't be able to access your account, all of the account assets will be frozen, more than likely your credit score will go down.

simonblack 6y ago

Second, PLEASE diversify your credit cards across different financial institutions. ABSOLUTELY. There is an old saying "Never stay with with the same Bank, Insurance Company, or lawyer for more than two years. Otherwise they think they own you." While I think that 'two years' is a little paranoid, I like the overall gist of the saying.

happyjack 6y ago

https://www.cnbc.com/2020/10/19/7point1-million-american-households-didnt-have-a-bank-account-last-year.html https://www.cnbc.com/2020/10/19/7point1-million-american-hou... Just some food for thought.