How will my credit score be affected by cancelling my credit card?
I have had this credit card for 2 years now, and it charges an annual fee (it is designed for people with little credit and they report monthly to the bureaus). Less than a month ago, I was approved for a credit card with no fees and a lower interest rate. I would like to cancel the old card because I don't want to pay the annual fee, but how will affect my credit score? Should I keep it open?
Public Comments
- call them and ask them to waive anual fee since another companay approved you and you can close and transfer any balance and they will I'll bet you. Also Open the new card but do not close the old one as yes it will hurt your scores
- While having credit accounts with long histories is good, I don't think it's worth paying an annual fee. One of the main things lenders look for is your ration of the available credit to your current balance. In other words, its better to have several credit cards but not use them (except in emergency). But there are hundreds of cards out ther woth no annual fees.
- if this is your only credit card then yes closing it will shorten you history and will hurt you.
- http://www.theconsolidationclinic.com <-- they have pretty good answeres on both consolidation and settlements.
- Noooooooooooo don't close it...atleast not yet. You most definetly want that good history to stay on your credit report. I know that annual fees can be a pain....but the wonders it will do for your score is worth it.
- if it significantly changes your balance to available credit ratio it can hurt your score. For example... if you have 2 credit cards: 1. Limit: 5000 Used: 0 Available: 5000 2. Limit: 10000 Used: 5000 Available: 5000 your ratio would be 5000/15000 (30%) if you closed #1 your new ratio would be 5000/10000 (50%) that would be bad. Open a new card w/o a fee to replace the one with a fee, then close the one with the fee.
- If its one of the oldest cards you have it might hurt your score to close it. If it not, it probably won't. A better idea is to keep it open, call their 800 customer service number and ask them to waive the annual fee. I'll bet they will since they already know many other cards don't charge a fee and they don't want to lose you as a customer. Remember, even without charging you an annual fee they make money every time you use their card and they don't want to lose that income if they don't have to.
- Given what appears to be a relatively short amount of credit history, I would suggest keeping the card open, even if you simply cut up the card, and go ahead and pay the annual fee for a couple of years more... The reason is simple.... One of the key elements in calculating credit score is the length of time in the bureau, and another is the age of the accounts you currently have. The benefit to your credit rating is huge for having that older account, and the potential impact is huuuuge! For what the annual fee costs you on the older card, you would probably make that up in just one car payment, should you be able to get it at a rate below 10%, as opposed to one of the more likely 17-20% rates for a person with a lower score... The difference in a 18% interest rate and a 6% interest rate on a $25K car note is about $150/mo. !!! Compare THAT to your annual fee, and see if it doesn't make sense to go ahead and just keep the older card. Not to mention the impact if you were to get a $150K mortgage at 7% instead of 10%... The savings there would be about $315/mo!!!!! I hope this helps! For more help and information, visit these sites... http://www.bestcredityet.com http://creditgecko.com http://www.omegacreditrepair.com
