Reply #4: Depends. [View All]

[mwooldri]

If there's zero balance on it and WaMu goes belly-up and then you want to use it ... it's a crapshoot. Your best earlier example is NextCard... they (NextBank) failed in February 2002 but the cards were still active... but come June the FDIC shut everything down, made a deal with Merrick Bank to buy a good number of their cards, and some other banks offered a straightforward new account with a simple balance transfer offer. Merrick Bank is a bank that deals with high-risk credit so my guess was that people were able to get new accounts with them, albeit at not as favourable terms as they were with NextCard.

If WaMu is really bleeding red ink then the credit card shutdown may happen sooner rather than later, possibly even same day as the BK annoucement. It might be viewed that if you have a dormant account with a credit card company, and that CC company goes belly up, then you're no risk, but then you might be an asset for "future business" or you might be a "deadbeat" (meaning someone who isn't generating any revenue for the CC)... if you're viewed as a "deadbeat" then forget about that card, hope some other CC Co is taking applications and extending credit and hope your credit is good and your personal financial situation all around is good. I've been seeing CC lines getting slashed, not because a customer is getting into any financial difficulty but merely because the area they live in... their house prices are crashing... no equity in the home to possibly pay a cc debt... hence bigger perceived risk.

If you've got a balance, hurray! You owe someone some money somewhere. WaMu is already trying to sell off its assets... I had an accout with Providian, got bought by WaMu. I closed the account with a balance and slowly started paying it down. WaMu sold this loan portfolio to someone else, and now I'm paying them. They changed the terms and conditions (much higher minimum due, different due date) and the new companies' website sucks BIG time (their biggest feature on there is pay the bill otherwise it's extremely minimalist).

Disclaimer: I am a call center coach for a large CC company.