Author Topic: Cancel cc with anual fee? Or keep it for credit score?  (Read 4835 times)

SavingMon(k)ey

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Cancel cc with anual fee? Or keep it for credit score?
« on: November 08, 2013, 11:54:23 AM »
Hello all. I have an airline miles credit card (currently with a ton of miles I've been saving) that has an annual fee of $60. I use it for convenience only, not as a credit line. The card is from my pre-mustachian days, and it was my first card. I have had it for about 8 years. The credit limit is $3400.

Last month I got a new card with no annual fee and 1.5% cashback on everything (no accrual limit), $10,000 credit limit. I am sick of paying the annual fee on the airline card, and have been thinking about cancelling the card after using my miles for our honey moon trip.  Then someone told me not to do that, to keep that account open as it is my oldest one and it raises my credit score.

Those are my only two cards. I have a mortgage (recent) and a car loan (ugh, I know, I need to deal with that soon).

What say you about the credit card, though, wise mustachians? Keep it or close it?

gooki

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #1 on: November 08, 2013, 12:04:16 PM »
Close it.

SavingMon(k)ey

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #2 on: November 08, 2013, 12:06:57 PM »
Are you planning on taking on new debt anytime soon? You already have your mortgage so I would guess you have pretty good credit and can take the small hit for closing the card. I would kill it once you use the miles
No, I'm not planning on any new debt. My credit is very good.

impaire

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #3 on: November 08, 2013, 12:14:15 PM »
Call the company to close the card. Tell the sales rep you're closing it because it has a fee and you just refuse to carry a card with an annual fee--also mention the perks from your other card. Let him/her talk you into getting swapped to a no-fee card, possibly also with a perk.

Did that just yesterday for my delta amex!

Eric

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #4 on: November 08, 2013, 12:18:48 PM »
Call the company to close the card. Tell the sales rep you're closing it because it has a fee and you just refuse to carry a card with an annual fee--also mention the perks from your other card. Let him/her talk you into getting swapped to a no-fee card, possibly also with a perk.

Did that just yesterday for my delta amex!

Yep! Call them and tell them you'd like to cancel and get them to waive the annual fee.  Best of both worlds.

Tyler

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #5 on: November 08, 2013, 12:36:59 PM »
I have one CC that I rarely use but have held for more than 10 years.  It's come in handy a few times.

It has an annual fee, but all I have to do is call them up and they always waive it.  The customer service has even explicitly told me that while they can't permanently waive the fee, because I am a long time customer it is company policy for them to always waive it if I ask.   

SavingMon(k)ey

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #6 on: November 08, 2013, 12:40:12 PM »
Thank you for your advice guys. I hadn't thought about calling them to see if they'd waive the fee. I'm going to try that, but maybe I'll wait til I use up the googobs of miles. That way if they say no, I'll just cancel.

dadof4

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #7 on: November 08, 2013, 01:52:12 PM »
There's really no harm in asking. At worst, you can say you'll think about it. If the rep you're talking to says no, ask to talk to their retention dept (Chase calls them loyalty services). It is best to call within 60 days after the annual fee has being assessed (ideally less than 30).  Any earlier and they may not be able to do it. Any later, and they may not return your fee even if you cancel.

jennaw

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #8 on: November 08, 2013, 02:52:45 PM »
Gail Vaz-Oxlade recommends keeping your old card active for at least six months while you build up your history on your new card: http://gailvazoxlade.com/blog/archives/4204

MgoSam

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #9 on: November 08, 2013, 03:00:27 PM »


Yep! Call them and tell them you'd like to cancel and get them to waive the annual fee.  Best of both worlds.

Yeah we do that with our Delta Amex card at my office and each year the rep will look at our transactions and quickly wave the annual fee.

seattlecyclone

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #10 on: November 08, 2013, 03:57:55 PM »
Thank you for your advice guys. I hadn't thought about calling them to see if they'd waive the fee. I'm going to try that, but maybe I'll wait til I use up the googobs of miles. That way if they say no, I'll just cancel.

I know of no airline that requires you to keep their credit card open to use the miles you earned with the credit card. You should be able to close the card today and use the miles at your convenience.

Woodshark

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #11 on: November 08, 2013, 04:36:46 PM »
If they don't waive the fee then ask them to transfer your account to a non fee account. You will probably earn less miles for each dollar you charge going forward but your existing miles / rewards should be the same.

dadof4

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #12 on: November 08, 2013, 04:46:26 PM »
I know of no airline that requires you to keep their credit card open to use the miles you earned with the credit card. You should be able to close the card today and use the miles at your convenience.

It might be the Capital One Venture Miles - which aren't really airline miles. Has a $60 annual fee, so that fits...

SavingMon(k)ey

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #13 on: November 08, 2013, 07:00:50 PM »
I know of no airline that requires you to keep their credit card open to use the miles you earned with the credit card. You should be able to close the card today and use the miles at your convenience.

It might be the Capital One Venture Miles - which aren't really airline miles. Has a $60 annual fee, so that fits...
Actually it's a Chase United. It's an old card they don't offer anymore. It's $1=1 mile. I'll look into whether I actually lose the miles. You may be right that I don't.
Gail Vaz-Oxlade recommends keeping your old card active for at least six months while you build up your history on your new card: http://gailvazoxlade.com/blog/archives/4204
Thanks for the link. I don't have to pay my annual fee until February, so I have some time to keep them both open even if Chase doesn't want to waive the fee.

EDIT: I looked it up and the miles DO expire if your credit card account is no longer active. So I need to keep it open at least until I use the miles.
« Last Edit: November 08, 2013, 07:18:55 PM by worldstrad »

Argyle

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #14 on: November 08, 2013, 07:41:16 PM »
I have a Chase card much like that (except mine is free), but the miles stay active if you do one of two things: a) fly on United once every six months, or b) have any Chase card that earns miles, even a free one.  Call and ask if you can get a free card and if that new card will let you keep your current miles.

Stache In Training

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #15 on: November 08, 2013, 09:49:05 PM »
I agree with the ask for the fee waived, and try for the best of both worlds, suggestion.  You'll probably get it.  If not, as already said, it'll only matter if you're applying for new credit relatively soon.  Closing a cc does ding your credit for a short while, but not too bad.  You can also try to have your new cards credit limit raised, at about the same time.  That raises your score, and can off-set the ding, if you're worried.

But again, if you're not going to apply for new credit anytime soon, it won't hurt in the long run... and you'll save 60!

MoneyCat

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #16 on: November 09, 2013, 06:02:19 AM »
Closed credit card accounts continue to age for another 10 years after the date of closing before they are removed from your credit report.  If you close it, it won't affect your credit score for ten years and by that time your new account will be aged to an adequate point anyway.

SavingMon(k)ey

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Re: Cancel cc with anual fee? Or keep it for credit score?
« Reply #17 on: November 09, 2013, 07:05:14 AM »


Yep! Call them and tell them you'd like to cancel and get them to waive the annual fee.  Best of both worlds.

Yeah we do that with our Delta Amex card at my office and each year the rep will look at our transactions and quickly wave the annual fee.
Do you call just before or just after the fee is assessed?