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Credit score has increased dramatically - GS says I'll have to close my account & reapply to get a lower APR

Title says it all. I paid off a ton of debt recently, and waited for my credit score to increase, which it did. Dramatically.


My question is, why can't GS lower my APR like every other credit card issuer has done?


I contact Chase - they lower the rate while I am on a chat with them. I contact Citibank - they lower the rate while I am on the phone with them. I contact Goldman Sachs - they tell me it is impossible, that I would need to pay off my balance, close the account, and reapply.


First of all, this is inefficient just from a business perspective. Secondly, closing any card account that has a low balance will negatively impact your credit score. Why they insist on you taking action that would lower your credit score certainly sounds like they are operating in bad faith. They then use that lower score against you when determining your APR.


I carry a zero balance most months, so I certainly could jump through their hoops, take a hit to my credit score, and hope they lower my rate. But I am not. I am closing my account.

Posted on Sep 5, 2024 7:11 AM

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Posted on Sep 5, 2024 8:11 AM

Many banks do not lower interest rates either. You just happen to be a customer of two of the banks that do lower rates. Since you carry a zero balance I don’t understand the relevance of a lower rate.


You are misinformed about closing an account lowering your credit score. FICO looks at all accounts, opened and closed when determining average age of accounts. It could raise your utilization, but utilization has no memory since you have a zero balance, your utilization is extremely low. I just don’t understand your fixation on this given what you state in your post. There literally is no downside to closing your account and reapplying. Reapply is a soft pull and Goldman Sachs will show you your interest rate and credit limit. If you accept, you’ll get a hard pull. FICO looks at inquiries for 12 months. This could have a small impact on your score, but only accounts for 10% of your score.



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Sep 5, 2024 8:11 AM in response to Stoj26

Many banks do not lower interest rates either. You just happen to be a customer of two of the banks that do lower rates. Since you carry a zero balance I don’t understand the relevance of a lower rate.


You are misinformed about closing an account lowering your credit score. FICO looks at all accounts, opened and closed when determining average age of accounts. It could raise your utilization, but utilization has no memory since you have a zero balance, your utilization is extremely low. I just don’t understand your fixation on this given what you state in your post. There literally is no downside to closing your account and reapplying. Reapply is a soft pull and Goldman Sachs will show you your interest rate and credit limit. If you accept, you’ll get a hard pull. FICO looks at inquiries for 12 months. This could have a small impact on your score, but only accounts for 10% of your score.



Sep 5, 2024 8:47 AM in response to Stoj26

Stoj26 wrote:

Closing an account absolutely does impact your credit score, but I really don't need to justify wanting a lower rate and not wanting to jump through hoops to do so.

I was running through some simulations recently on how various actions would affect my credit rating (I believe the tool was from Capitol One but it could have been Chase). According to them, closing out my oldest card, an AMEX, would raise my credit score by two points. Closing others would, at most, lower it by two. Given that credit scores can frequently fluctuate by that much over the course of a couple of months, I don't consider it worth worrying about. What lowered my credit score was paying off my mortgage. It wasn't by a whole lot, maybe ten points, but it was noticeable. And, until I take out another loan, that criterion on my credit score will probably say at "Good" and not "Excellent".


Also, once you've got your credit in the "excellent" range, increasing it, trying to get to a perfect 850 doesn't have much effect on anything in the real world.


But you're right. There's little point in debating it here as no one here can do anything about it.

Sep 5, 2024 9:35 AM in response to Stoj26

Apple Card doesn’t have a penalty interest rate, so that explains how easy it was for you to lower your rate through Chase. They just removed the penalty you acquired at some point. In my experience Chase does not actually lower rate, just removes the penalty and you go back to the rate you had when you originally opened your account. Citibank also charges a penalty rate, so that was probably all they did as well. Discover has been known to lower rates for customers, so that was a good thing.


If you want to learn in depth how FICO scores are calculated, do some reading on the FICO forums. You might also enjoy when they have live chat sessions with VP’s at FICO. You’ll learn that closing an account does not affect your FICO score. IdrisSeabright’s simulator bears this out.


However, closing an account does lower your VantageScore 3.0 and 4.0 score. VantageScore is not used by any major bank or credit card issuer except Navy Federal Credit Union. Banks use FICO and closing an account does not lower a FICO score. If the closing cause your utilization to increase over a threshold. It could lower your score a few points.


I close accounts all the time when an account does not meet my needs. I currently have 22 open accounts and about 30 closed accounts. I’ve had credit card accounts since 1977, almost 50 years. Your fixation on finances isn’t necessary.


If your score is fluctuating that much, you may have a >thin file<. One of the advantages of a thick file is that changes because of utilization, age of accounts, etc. have relatively little effect on your score. I learned a long time ago that there is no reward when you die if you have a high score or a low score. I concentrate on other aspects of my life and I don’t sweat the smaller details like daily, weekly or monthly changes in a FICO score. If I’m successful in the areas that really matter, my finances will be just fine. But to each their own and I hope everything works out to your satisfaction.

Sep 5, 2024 11:09 AM in response to IdrisSeabright

If someone is making a major purchase like a home or auto or RV/boat then it can be wise to watch your credit score for the 12 months preceding the purchase/lease. But once your score is over about 780, you’ll get best mortgage rate, insurance rates, etc. One point here or there is irrelevant. The real damage is done by a negative that doesn’t fall off your report for 7 years, or in some cases 10 years. But FICO is moving to new scoring algorithms over the next year or two. A lot of people are going to get rude awakening when they’ve been working so hard on their FICO 8 score and the bank moves to FICO 10 or 10T and their score drops 25 points or more. There’ll be a lot of 800 club members getting a wake up call.

Sep 5, 2024 11:33 AM in response to IdrisSeabright

Yes, certain negatives will result in an application not being approved. But until recently, low scores were less of an issue than many other issuers. This lead to Apple Card being considered a subprime card. It wasn’t really a subprime, but a lot of speculation swirled around that being a major issue for the losses Goldman Sachs was reporting.

Sep 5, 2024 8:27 AM in response to Jeff Donald

I typically carry a zero balance, but not always - I stated this.


Yes, I am fixated on my finances. We all should be. It would be incredible if I just happen to have the only four lenders that made this easy and didn't require me to close and reapply (Chase, Citibank, Discover, & Elan Financial). Some were transparent - there was a "penalty" rate being applied to my Chase account - the CS rep unchecked a box and my rate dropped 3 points.


Closing an account absolutely does impact your credit score, but I really don't need to justify wanting a lower rate and not wanting to jump through hoops to do so. Not sure I came here to engage in a debate. Thanks for your time.

Sep 5, 2024 10:53 AM in response to Jeff Donald

Jeff Donald wrote:

I learned a long time ago that there is no reward when you die if you have a high score or a low score. I concentrate on other aspects of my life and I don’t sweat the smaller details like daily, weekly or monthly changes in a FICO score. If I’m successful in the areas that really matter, my finances will be just fine. But to each their own and I hope everything works out to your satisfaction.

When I first got my score over 800 after years of erratic financial behavior, I was very pleased with myself. And I was quite upset a couple of months later when it dropped back to something like 799. But I'm over it. I check it to make sure nothing funny is going on. And I'm certainly not going to take out a loan I don't need in order to improve my credit mix. Age, if it doesn't bring wisdom, certainly seems to bring pragmatism.

Sep 5, 2024 11:19 AM in response to Jeff Donald

Jeff Donald wrote:

If someone is making a major purchase like a home or auto or RV/boat then it can be wise to watch your credit score for the 12 months preceding the purchase/lease. But once your score is over about 780, you’ll get best mortgage rate, insurance rates, etc. One point here or there is irrelevant. The real damage is done by a negative that doesn’t fall off your report for 7 years, or in some cases 10 years. But FICO is moving to new scoring algorithms over the next year or two. A lot of people are going to get rude awakening when they’ve been working so hard on their FICO 8 score and the bank moves to FICO 10 or 10T and their score drops 25 points or more. There’ll be a lot of 800 club members getting a wake up call.

Fortunately, I don't plan on buying anything else big until my 2013 Honda Fit gives out, which probably won't happen anytime soon.


I did notice that the Apple Card application was particularly sensitive to a negative on the report. Other companies were perfectly happy to give me cards even with the lone negative on my report and an otherwise Very Good credit score. Apple wouldn't approve mine until I finally figured out how to get it resolved.

Credit score has increased dramatically - GS says I'll have to close my account & reapply to get a lower APR

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