Thread: Annual Fee, Cancel or not?

I have a few cards that have annual fees, I have recently paid off all my credit cards, I hope to never have to use a few of them again. I know that canceling or closing your account does not help your credit right??? I have called about removing the annual fee ($79.00or more on one) and they will not budge, its also A crazy interest rate so I will more than likely never use the card again. What do I do, close the account?? Just keep paying the annual fee??? Keep in mind one of the cards I have had the longer than all my other accounts. My credit is over 750 now because of this site, what should I do to keep it that way. FYI, I have also not activated a few cards yet, because of the high interest and annual fee(new cards when they expire, you know you have to call and activate) Thanks For all the help, now and in the past.
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I would look to see which card you have had opened the longest and keep that one open. Maybe close the rest. How many credit cards do you have with an annual fee and high interest rate? Since your credit score is now over 700 you should apply for a better credit card that can give you cash back with no annual fee. You will see dip in your credit score but it will only be temporarily. Start using this card and pay it down every month and then eventually you can close the credit card with the annual fee without too much impact to your credit score. Thanks! Heather with BoostMyScore.NET

You're right, closing some of your credit cards will most likely hurt your FICO scores (especially if it's your oldest card and it will negatively impact your length of credit history). However, if a card has a $79 annual fee and your plan is to never use it again, it may still be in your best interest to just get rid of the card. I personally hate paying annual fees for a card I will never use.

What I would recommend is trying to get another no annual fee credit card (hopefully with a similar credit limit) before canceling one that you have on the chopping block. That way you should be able to keep your credit utilization ratio around the same instead of taking a big hit when you close a bunch of cards and lose all your available credit at once.

Glad you like the site! We're happy to have you as part of the community :-).

How many credit cards do you have right now, and what's your average CU ratio?

If your credit score is over 700 and they won't remove the fee, I would cancel that card. As long as you don't close multiple accounts at once I don't believe you are risking much if any damage to your credit. Even if it's your oldest card, you are probably ok to cancel it. We are given guidelines for what to do to protect your credit but no-one knows for sure exactly how the credit score algorithms work. If you're paying everything off on time otherwise and you're over 700 you're probably OK. However, when you go to cancel that card, their tune might change and they might budge on the fee at that time (sometimes you get transferred to a separate department whose job is to try to keep you as an account holder and they sometimes have more flexibility as to what they can and can't do).