Question : 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?
- asked by Nicky G
All Answers:
Answer #1
call them and ask them to waive anual fee sinceanother companay approved you and you can closeand transfer any balance and they will I'll betyou. Also Open the new card but do not close theold one as yes it will hurt your scores
- answered by golferwhoworks
Answer #2
While having credit accounts with long historiesis good, I don't think it's worth paying an annualfee. One of the main things lenders look for isyour ration of the available credit to yourcurrent balance. In other words, its better tohave several credit cards but not use them (exceptin emergency). But there are hundreds of cardsout ther woth no annual fees.
- answered by IceBoxx
Answer #3
if this is your only credit card then yes closingit will shorten you history and will hurt you.
- answered by LD
Answer #4
http://www.theconsolidationclinic.com <-- theyhave pretty good answeres on both consolidationand settlements.
- answered by HelpMe
Answer #5
Noooooooooooo don't close it...atleast not yet.You most definetly want that good history to stayon your credit report. I know that annual fees canbe a pain....but the wonders it will do for yourscore is worth it.
- answered by Anjell
Answer #6
if it significantly changes your balance toavailable credit ratio it can hurt your score.Forexample... if you have 2 credit cards:1. Limit:5000 Used: 0 Available: 50002. Limit: 10000 Used:5000 Available: 5000your ratio would be 5000/15000(30%)if you closed #1 your new ratio would be5000/10000 (50%)that would be bad.Open a new cardw/o a fee to replace the one with a fee, thenclose the one with the fee.
- answered by boilerette72
Answer #7
If its one of the oldest cards you have it mighthurt your score to close it. If it not, itprobably won't. A better idea is to keep it open,call their 800 customer service number and askthem to waive the annual fee. I'll bet they willsince they already know many other cards don'tcharge a fee and they don't want to lose you as acustomer. Remember, even without charging you anannual fee they make money every time you usetheir card and they don't want to lose that incomeif they don't have to.
- answered by John Harris
Answer #8
Given what appears to be a relatively short amountof credit history, I would suggest keeping thecard open, even if you simply cut up the card, andgo ahead and pay the annual fee for a couple ofyears more... The reason is simple....One of thekey elements in calculating credit score is thelength of time in the bureau, and another is theage of the accounts you currently have. Thebenefit to your credit rating is huge for havingthat older account, and the potential impact ishuuuuge!For what the annual fee costs you on theolder card, you would probably make that up injust one car payment, should you be able to get itat a rate below 10%, as opposed to one of the morelikely 17-20% rates for a person with a lowerscore...The difference in a 18% interest rate anda 6% interest rate on a $25K car note is about$150/mo. !!! Compare THAT to your annual fee, andsee if it doesn't make sense to go ahead and justkeep the older card.Not to mention the impact ifyou were to get a $150K mortgage at 7% instead of10%... The savings there would be about$315/mo!!!!!I hope this helps!For more help andinformation, visit thesesites...
http://www.bestcredityet.com
http://creditgecko.com
http://www.omegacreditrepair.com
- answered by Credit Guru
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