Jump to content
Premed 101 Forums

LOC Question re: closing credit cards


Recommended Posts

I have a quick question I would like an answer to (given that the rep I am dealing with is currently out of office for the next few days).

 

I got a quote from Scotia that I would have to close my TD Visa in order to receive a LOC from them. I am going with Scotia as the TD rep quoted me at above prime and refused to bargain.

 

Does anyone know why I would have to close my TD Visa (Limit of $1000 on this Visa) in order to get a LOC with Scotia? I am receiving the Scotia Gold Passport Visa along with my LOC at Scotia.

 

Sorry if this is a stupid question. I forgot to ask it along with all of my other questions when I was talking with the Scotia rep.

 

Thanks

Link to post
Share on other sites

Yes, the reason is that with your TD visa you have $1000 of credit. Since Scotia is giving you such a huge amount of credit, they don't want you to have any additional sources of credit on top of that. I was told the same thing, except that if I wanted to keep my other credit cards it was no problem, except my LOC would be reduced by the equivalent amount of the credit limit on my other cards. Since I was getting a visa from scotia I had no problem cancelling my other cards anyway. Hope that makes sense!

Link to post
Share on other sites

I'll tell you how my experience has been. I was also with TD and have moved all of my banking to Scotiabank.

 

When I first applied for the Scotia LOC I was approved for the $200,000 minus my existing student line of credt with TD and my credit limit for my visa. For simple math we'll say I had a $1,000 visa and a $10,000 student LOC. So Scotia approved me for a $189,000 professional line of credit, to be divided into four years.

 

I spoke with the rep and said that I wanted to consolidate my student loans and take advantage of the Scotiabank Passport Gold Visa. This changed things...

 

So what I ended up with (for example - changed the actual figures) was $200,000 LOC that will have $10,000 used up right away (to pay off my TD LOC) and a $5,000 Visa from SB.

 

Does that clear anything up for you?

 

In short, you don't have to close your Visa with TD but it will reduce your total LOC amount with Scotia. If you close it and take the Scotia visa, that visa will not affect your loan amount.

 

... That has been my experience anyways. Perhaps others will have a different story. The process has been much less standardized than I expected. I can't believe the person at TD wouldn't give you prime!!! It's on their website!

Link to post
Share on other sites

I can understand the existing student line of credit but its surprising to hear them making you close existing credit cards. It might be different with RBC, but I went with RBC and they allowed me to keep my existing credit card with another bank with a bigger limit than yours as well as get the RBC Infinite avion card. They kept it at $250k too so no change there.

 

It might just come down to the individual branch or advisor.

Link to post
Share on other sites

I have a related question: I don't really mind closing my TD Visa (went with Scotia for my LOC), but does anyone know what effect that will have on my credit score? I know that in the USA, closing your oldest card negatively impacts your score because the length of credit has decreased, but not sure if it's the same here.

Link to post
Share on other sites

I don't think it's that bad. I've closed a card in the past because I didn't like the bank's offer and I didn't notice much of a change on my score.

 

I did a credit check recently and that closed account still shows up, paid in full and closed. It was my oldest card, though not by much: the next card was opened a few months after. I believe they keep the records for 5-10 years before purging it, but don't quote me on that :P

 

So only after those 5-10 years will that account be completely removed, but by then I would have an extensive history and wouldn't care.

 

Another thing you should be weary of is the ratio of amount owed to total credit limit. If you close a card that you rarely use, you immediately raise that ratio and that may lower your score a bit. No big deal though if you aren't close to your limit. This is especially not a big deal if you close, say, a $1000 card and open a $5000 card.

 

Hope this makes sense

Link to post
Share on other sites

Cool, thanks shady! I might just close it once I get my Scotia card in the mail then, it's easier to make payments to the same bank anyway. Though, it's only a $2000 limit, and I don't really plan on needing every penny of my $200000 LOC while in school, so maybe I'll just take the lazy way and not close it until I'm done and want to consolidate my OSAP. Haha.

Link to post
Share on other sites
  • 2 weeks later...
Is the SB Visa passport gold always 5000$ for everyone? I will ask my banker tomorrow, for now I've given him enough of a laundry list of questions already :)

 

Wanted to survey...

 

I believe so, to start off at least. I'm sure after some time with them they may offer to up the limit. I could also see someone with bad credit/limited credit history being given a lower limit? As far as their information says though, you get at $5,000 Visa Passport Gold with the Professional LoC.

Link to post
Share on other sites
Thanks.

 

Now I wonder whether my credit rating with go down when/if I close my oldest revolving credits to move all/most of my banking to Scotiabank.

 

My banker seems to think the credit rating doesn't go down if I close it down on my own, but it seems iffy.

 

I will report back after I call Equifax/TransUnion, maybe they will give me their official answer as well.

 

People seem really worried about this - can I ask why? I mean your credit score in general for medical students post getting the LOC. Your report clears after 6 years regardless - which for most of us is at least how long you will be a resident/student, and you have the capability as a resident and sometimes as a medical student to override regular credit rules and get large, rock bottom rate mortgages (the only other major reason to need credit). Plus the importance of various things also diminishes over time outside of this hard limit etc :)

 

This isn't to say "trash your credit!" - ha, I would never, ever say that. Only that the importance of a minor adjustment - if it even occurs - would be basically zero in most cases.

Link to post
Share on other sites
  • 1 month later...

I think it depends a lot on your rep, AND your history with said bank. I got the full $250K from RBC, but I owe around $25K in OSAP, have 2 other LOCs and 3 credit cards (10K, 5K and 2.5K). I did close one other $5K LOC that I had with another bank as a show of good faith though, haha. Though I have a long history with RBC and have all my services with them so they were more lenient with this.

 

However, it is very normal for them to request you close other credit sources to get the full amount.

Link to post
Share on other sites
Interesting - I wonder if this is dependent on the bank/advisor too. I've been working for a few years and have a few CCs that I didn't want to close (due to nice perks, credit limit etc.), and my bank didn't give me any trouble about keeping them open. My LoC amount is unaffected afaik.

 

Yes, it depends a lot on the advisor, the bank, your expenses/debt ratio and the size of the cards.

 

I.e. if you already have 50K of available credit, they may reduce the size of your MD LOC or ask you to close some.

Link to post
Share on other sites
Or do you need to build up points buy spending?

 

Slightly off topic but I love the spelling mistake with a Freudian slip in it.

 

Schmitty did you have to close a CC with RBC? I have a CC with a ridiculous limit (larger than your 3 combined) and my advisor never even gave a peep. I think we may even have the same advisor as we work through the same branch.

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
×
×
  • Create New...