I no longer need my Orchard Bank card which will charge me a fee in May. I now have a noce Bank Of America card which has 3X the limit Orchard had. Orchard was opened in May of this year (2004) will it make much difference if I cancel it in April so I don't have to pay another annual fee or if I cancel it after getting the BOA card and BT'ing the 200.00 that is on it?
You'll 'more than likely' get a $250 credit limit increase from Orchard at the one year mark. I don't remember what the annual fee is for orchard but it may be worth having the extra credit, extra line, history and age of account with that Orchard Card. If the fee is like $39 I'd just pay the fee and sock drawer the card or call and ask for them to waive the fee but I'd seriously think about just cancelling out the card. You've already invested the annual fee from last year. Are you really ready to just throw that away? As long as you keep that account in good standing, you'll receive $250 increases about every three months after the one year mark to a maximum of $1000 I believe. I'm not sure what other cards you have but think twice about it.
The cancelation issue won't need a decision until about April of 2005, so you might see what offers you get preceeding that and put in place a second card as a backup to your BofA. As that time approaches, the FICO hit from the BofA inquiry will be minimal. Take only one offer with best terms from a bank with a good reputation. Accounts with poor terms (annual fee, high rates, low balance, poor reputation) have no value once you establish your credit worthyness. You want to build a relationship with a bank that will expand your credit lines on good terms as you show responsible on-time payment and low usage. At that point you will have history on your BofA card, and enough available credit that the cancellation should do little to your FICO.
