Applying for a credit card with bank I stiffed 20 years ago.

February 10, 2014 10:44 PM

So when I was in college I ran up a $700 credit card debt with Citibank visa. Then I didn't pay it. And for over a decade my credit was crap. But eventually I turned it around and have good credit again. So here's my question: I need to get a credit card for one of the biggest hotel chains as I stay there for business a bit. I'd like the benefits and points maximizing. Problem: the best card is run through citibank. Since my teenage folly I've changed my name but I still have the same SS#. Will applying today reactivate the debt with them?
posted by rileyray3000 to Work & Money (13 answers total)

Probably not. Statute of limitations for unsecured debt is less than 7 years in most states.
posted by empath at 10:52 PM on February 10, 2014 [2 favorites]

Large banks ignore statue, so probably with a debt collector.
posted by Mblue at 10:57 PM on February 10, 2014 [1 favorite]

Be careful, if you make any actions construed as trying to pay off this debt, it will be "re-aged" and will wreck your credit rating. Your credit rating is worth far more than a few piddling rewards points.
posted by Yowser at 11:13 PM on February 10, 2014 [2 favorites]

Citibank may not be able to sue you or report your old debt to a credit reporting agency. But I'm not aware of anything that will make them forget that you never repaid your debt. So Citibank may refuse to open an account for you anyway (wouldn't you, if you were them?).

It's possible that Citibank lost the records, but I would just apply to the second-best card, avoiding a potential extra hard inquiry on your credit report that will reduce your credit score.
posted by grouse at 4:32 AM on February 11, 2014 [2 favorites]

It may not reactivate the debt with them, but they may decline you, despite your current credit score. I have a 10 year old issue with Chase that I can't seem to get resolved, and they don't seem likely to forget it.
posted by korej at 5:59 AM on February 11, 2014

Anecdotal, but I went into credit counseling while I was an active Discover card user. I paid them every dime I owed them, but 9 years later I still cannot open an account with them.
posted by getawaysticks at 6:28 AM on February 11, 2014

If you are considering paying off the debt, it would be tens of thousands of dollars now. For example, $700 at 20% simple interest for 20 years is $26,836.32.
posted by grouse at 6:31 AM on February 11, 2014

Capitol One, with whom I had a spot of trouble like 14 years ago, bought and then sold my car note and recently bought out my HSBC credit card, so I have an active account with them again. They sold that debt to someone else years ago. So far, zero shits given.

There's nothing they can do to you for applying for a new card except decline. The activity itself (any activity anywhere) might rattle a debt collector into trying to collect, but it's just a letter in the mail.

grouse's spooky story might be mathematically accurate but untrue in the world of debt collection. They'd take $300 to settle it if you offered, but it's probably off your credit report by now.
posted by Lyn Never at 7:05 AM on February 11, 2014

Search for "credit card blacklist." There are boards of people sharing their experiences. It seems to vary by company, I think I remember reading that Discover in particular will hold a grudge. Also, they are not going to come after you for $26,836.32.
posted by ziggly at 8:39 AM on February 11, 2014

This debt was charged-off by them long ago and they will not reactivate it. It could come back as zombie debt from a collector who has bought the debt (it's probably been bought and sold over and over by now), but the statute of limitations has also ended, so you don't have to pay it even if you get a call or letter from a collector who has bought the debt for pennies on the dollar. In fact, don't engage with a collector at all until you have done research and/or spoken with an expert as responding to the payment request can reactivate the debt as Yowser mentioned.

The only thing that the bank may do is decline to extend you new credit, but that decision is largely based on your current credit profile, not very old debts from the past.
posted by quince at 10:20 AM on February 11, 2014

The debt was either written off by Citi or sold in a bundle for pennies on the dollar to a collection agency (most likely the former) many, many years ago. Citi does not maintain an egregious "never-fucking-give-credit-again" list for credit cards after something has aged off your credit report. Discover does.
posted by ersatzkat at 3:19 PM on February 11, 2014

Response by poster: So bottom line - apply or no? I'm hearing some conflicting advice here.
posted by rileyray3000 at 7:02 PM on February 11, 2014

IMO, you can apply, but they might tell you no.
posted by empath at 7:33 PM on February 11, 2014