topic Re: Credit card Question - Close account or not? in Community Chat

Credit card Question - Close account or not?

WeiRDgeRL — Fri, 11 Dec 2015 17:48:52 GMT

Hi Everyone -

I have 2 credit cards. One of the cards I have had for 15 years with no late payments but it has an annual fee of $39.00 which they won't remove.

I rec'd a nice offer from my bank with a much lower interest rate and no annual fee. Also 0% balance for transfers and new purchases for over a year.

I want to transfer my balances from this other card with the higher interest rate and annual fee to this new card and close out the old card because I don't want any more annual fees.

My question is.... should I close the account? I have excellent credit history overall and don't want to mess it up yet I don't want to leave this other account open and charging me yearly for an annual fee whether I would be using it or not.

What do you think? I have browsed the internet for info and have found its a split if its good or bad. Just wanted some more opinions.

Thanks so much!

Sorry there is no spoiler, not sure what I did but I can't fix it LOL!

Re: Credit card Question - Close account or not?

LilacTree — Fri, 11 Dec 2015 17:51:53 GMT

@WeiRDgeRL wrote:
Hi Everyone -

I have 2 credit cards. One of the cards I have had for 15 years with no late payments but it has an annual fee of $39.00 which they won't remove.

I rec'd a nice offer from my bank with a much lower interest rate and no annual fee. Also 0% balance for transfers and new purchases for over a year.

I want to transfer my balances from this other card with the higher interest rate and annual fee to this new card and close out the old card because I don't want any more annual fees.

My question is.... should I close the account? I have excellent credit history overall and don't want to mess it up yet I don't want to leave this other account open and charging me yearly for an annual fee whether I would be using it or not.

What do you think? I have browsed the internet for info and have found its a split if its good or bad. Just wanted some more opinions.

Thanks so much!

Sorry there is no spoiler, not sure what I did but I can't fix it LOL!

I've heard it will lower your FICO score if you close it. You have to make a choice on how important that is versus the annual fee.

Re: Credit card Question - Close account or not?

MillieMilan — Fri, 11 Dec 2015 17:51:54 GMT

close it

Re: Credit card Question - Close account or not?

Tinkrbl44 — Fri, 11 Dec 2015 17:56:42 GMT

Keep in mind that your credit score is calculated, in part, with the ratio of total balances to total credit lines.

If you are going to close that account, you should open and establish the new one first. I'm sure others will have more input.

Re: Credit card Question - Close account or not?

JustJazzmom — Fri, 11 Dec 2015 17:58:19 GMT

FICO score is most important if you are buying something in the near future like a car or a home. From your credit history, it looks like you pay bills in a timely manner. I would close it. Then about 2 months from now, check one of your credit reports (Experian, Equifax or Trans Union) to see if the report now shows closed by the consumer.

Re: Credit card Question - Close account or not?

itsmagic — Fri, 11 Dec 2015 17:58:48 GMT

I had a similar scenario a few years ago and I went ahead and closed it. I didn't really notice it affecting my credit score.

Re: Credit card Question - Close account or not?

WeiRDgeRL — Fri, 11 Dec 2015 18:00:22 GMT

Thanks everyone! I appreciate it

Re: Credit card Question - Close account or not?

2blonde — Fri, 11 Dec 2015 18:02:51 GMT

I just couldn't pay that annual fee...........I'd cancel it. If your overall rating is very good, I don't think it will hurt you enough to matter. They also consider income vs. available credit in your score, so having too much available credit can hurt you too.

Re: Credit card Question - Close account or not?

zuzubailey — Fri, 11 Dec 2015 18:14:18 GMT

I heard an expert talking about this on the radio and he said the same thing as Tnkrbl.

You can either open another account of about the same amount of credit line or

call your other cards and have the credit limit raised to equal the amount of the card you want to close. Hope this helps.

Re: Credit card Question - Close account or not?

GCR18 — Fri, 11 Dec 2015 18:58:13 GMT

Open the new one for the same credit limit, then close the one with the annual fee.

Re: Credit card Question - Close account or not?

WeiRDgeRL — Fri, 11 Dec 2015 19:09:25 GMT

Thanks!

Re: Credit card Question - Close account or not?

NycVixen — Fri, 11 Dec 2015 19:35:12 GMT

@WeiRDgeRL The time you've had your accounts open is also a factor; if you close a 15 year credit card and all your other cards are newer you will lose that time and it will affect your score. As well as losing the available credit line which also affects your credit score.

Honestly, I think that if you have a substantial credit line with the card with an annual fee it is worth keeping it especially after having it for such a long time. $39 is not that bad for an annual fee. Just make sure you are not losing more by closing that account. You should consult with articles etc. from the credit bureaus. I had an Equifax account for a long time and I could see how everything would affect my score since it offered ways to see how hypothetical changes (such as having more than 2 hard inquiries) would affect your FICO score.

Re: Credit card Question - Close account or not?

Puppy Lips — Fri, 11 Dec 2015 19:37:41 GMT

I used to work for a mortgage company, and they do place a high importance on your FICO score. The reason your score would be lowered if you close it is because, as someone else stated, the ratio of what you owe vs. what is available to you would change. I would say that if you are not planning on any major purchases in the near future, go ahead and close it. I would hate to pay the $39 fee. The banks make enough money off their customers.

Re: Credit card Question - Close account or not?

tedEbear — Fri, 11 Dec 2015 20:44:27 GMT

@WeiRDgeRL---Go for the bank card, but pay the 39 for a year or two. This will show you are capable of the debt load. If you close it that is FIFTEEN YEARS of credit history you are wiping out! If you go to purchase a home and they suggest you close it, THEN close it. Build a credit history with your new card first. Just the opinion of a debtor and creditor.---tedEbear

Re: Credit card Question - Close account or not?

Mom2Dogs — Fri, 11 Dec 2015 20:49:33 GMT

I don't worry about my FICO score, I would cancel the other card.

Re: Credit card Question - Close account or not?

151949 — Fri, 11 Dec 2015 21:05:47 GMT

I highly recommend you transfer all balances you possibly can to the 0% interest card and during that year pay it off. I would not carry a balance on a cc if I had to live on ramon noodles to get it paid. STOP BUYING and pay off that balance.

Re: Credit card Question - Close account or not?

151949 — Fri, 11 Dec 2015 21:29:10 GMT

I guess i don't understand why people say not to close cards as it will negatively affect you FICO #. When we retired we closed ALL our cards except 1 which we use for almost everything we buy and then pay off the balance each month.We use it to acrue points for hotel stays.Other than this card we do have an open home equity line we took out when we bought our house. It has no balance on it. Not having any debt has not negatively impacted our credit at all.Our scores are in the excellant range. YOU DO NOT HAVE TO CARRY DEBT TO HAVE A GOOD FICO #. We have not carried any debt for at least 10 years except for 2 months when we bought this house 6 years ago - we had to hold the mortgage 2 months before they allowed us to pay it off without penalty.We only took out the mortgage in case we didn't sell our other house right away, but it did sell.

Re: Credit card Question - Close account or not?

Group 5 minus 1 — Fri, 11 Dec 2015 22:28:47 GMT

I read somewhere that if you close a credit card ask that the cc company say the it was at your request that it be closed.

Re: Credit card Question - Close account or not?

GingerPeach — Fri, 11 Dec 2015 22:35:25 GMT

Hi @WeiRDgeRL

You've received good advice and I agree with those who say to close the account.

As to removing a spoiler, you can go back to anywhere in your post that has it, and backspace over it. It will disappear.

Re: Credit card Question - Close account or not?

WeiRDgeRL — Sat, 12 Dec 2015 00:41:53 GMT

Combined 2 credit cards I have approximately $600.00 I said it had a high interest rate on the card with the annual fee. I don't have a high balance.

I pay everything I can in cash if possible..

As for "STOP BUYING". I only use my cards for emergencies for home/car/pets etc.

and I'm not living on ramon noodles either.