This DP comes from heavy shutdown datapoint contributor miles per day. What surprised me is that he still got shut down despite having $175,000 in the account and being a Platinum-tier customer, apparently just for cycling his credit cards a bit too aggressively. If you have similar behavior, it may be wise to tone it down a little~

Not long ago, my wife’s bank credit cards (as well as her brokerage account and savings account) were all shut down by the bank with no warning. She had a total of 4 personal credit cards with a combined credit limit of nearly $100K. She was BofA Checking Platinum, and also had nearly $175K in her Merrill Edge account. To this day, we still have not received any notice from BofA about the shutdown. The only way to confirm the closure, other than your card no longer working, is that when you log in, you no longer see any available credit. There was no red banner or any other indication that the credit cards had been closed. Another sign is that if a card has a $0 balance, it simply disappears and no longer shows up in your card list. That’s when I realized something was wrong.

About a week later, I received a letter from Merrill saying her account would be closed within a month and that I should liquidate my stock holdings. So I plan to move the funds to Schwab.

What happened? Over the past year, I had been cycling these credit cards regularly, about 2-4 times per month (meaning total monthly spending was 2-4 times the credit limit; for example, on a card with a $1,000 limit, I would spend the full $1,000, pay it off, then spend the full $1,000 again, repeating that four times). So I thought the bank did not mind cycling. But in the past few months, I got greedy and increased the cycling frequency to around 5-8 times. However, I think what really got me into trouble was the large negative balances, which the bank did not like. Because one vendor was very slow to post charges, a few cards recently showed negative balances like -$20,000 or -$30,000. So I believe the negative balances were the main reason my credit cards were shut down, not the cycling itself. I think if I had stayed at 2-4 cycles and avoided negative balances, I probably could have kept the accounts.

Also, if your account gets shut down, you will no longer be able to view past statements. The cards disappear as if they never existed. I heard you can go to a branch and request paper statements, but that is a hassle. However, I had one refund, and when that refund made my balance negative, I was then able to download prior statements through the bank. So if you want old statements, try to find a way to send a refund back to the closed credit card. Or better yet, download your statements before paying off the card.

It took me a few days to recover from this shutdown, but fortunately it did not affect other household accounts. Still, I’ve heard they keep shutdown records for a long time, which is a bit depressing. I’m going to reduce the amount of cycling on my accounts because I really do like using these cards for everyday spending. Also, goodbye to the points that were about to post—there’s at least $3,000 in rewards value on this card that will now be lost.