Cancel Oldest Credit Card due to fee?

[Field123]

Hey all,

I'd like to get some input from the credit experts on here. Here's the situation:

I was just charged a $19 annual fee for a Capital One credit card I have. I called Capital One and asked that they downgrade the card to a "no fee" card and they refused. It's $19/yr or no card. This card has no special cash-back or other reward benefits so I only use it for one small monthly bill to keep it active. Obviously, it seems that I should cancel the card and avoid this annual fee, but the only problem is that it is my oldest account and my relatively short credit history is the biggest weakness on my credit report.

Here are some pertinent facts:

Credit Score: Between 730-760 depending on source

Total number of credit accounts: 28

Number of Active Credit Cards: 7

Total Credit Limit: $68,000 (I spend $2,000-$3,000 per month on these, always paying in full)

Average Age of Credit History: 3 years, 7 months

Age of Card in question: 5 years 8 months

Limit on Card in question: $4,500



So what do you guys think? Keep paying the $19 annual fee or cancel?

Thanks for all the advice!

-Field

[tonysemail]

i would not worry about average age of accounts, based on info here-
https://www.reddit.com/r/churning/wiki/index#wiki_should_i_close_my_credit_card.3F

Your utilization makes a bigger contribution to your score and it sounds like this card would not impact utilization much either.
I would cancel the card.

[mskyle]

Call Capital One and ask them to change it to a better card! They can often do this without doing a hard pull on your credit report.

[onlykelsey]

Agree with MsKyle.  I think hitting 5 years as your average account age is the next "step" at which your score goes up for age.  Worth keeping in mind, probably.

[mskyle]

Coming back to add: if your card was with some weird shitty predatory company that only had bad cards, I would say go ahead and cancel it - it's probably not worth keeping open *just* for credit history reasons. But given that Capital One has lots of good no-fee rewards cards, I think you're probably better off asking to switch it to a card that better suits your needs.

[Field123]

Coming back to add: if your card was with some weird shitty predatory company that only had bad cards, I would say go ahead and cancel it - it's probably not worth keeping open *just* for credit history reasons. But given that Capital One has lots of good no-fee rewards cards, I think you're probably better off asking to switch it to a card that better suits your needs.

Hey Mskyle,

I appreciate your and the others' feedback. Unfortunately, I did call Capital One as I did expect them to allow me to downgrade to a no fee card. For whatever reason, the customer service representative said she could not do that... pretty frustrating. So with that in mind, what do you think? Keep it or cancel it?

[NextTime]

They won't downgrade it, but can they upgrade it to a better card?

If you can get a card where the benefits at least equal the annual fee, you can keep it for a couple years until your average age catches up to the presumed 5 yr mark.

Personally I would just cancel it, unless you are buying a home in the next couple years it shouldn't affect you too much.

If they provide no rewards, how can they justify a yearly fee anyway?

[Mikila]

I went through a similar situation.  Called Citi and asked to switch the card, twice ( hoping a different rep. would give better results).  No can do.  Called back after a few months and told them I wanted to cancel the card since I wanted a rewards card.  The rep then tried to convince me to switch it to DoubleCash card in lieu of cancelling. 

Call them up and try it.  If they don't take the bait, you can still close the account. 

I agree with others that it is credit utilization, not age of accts, you should focus on, score wise.

[swick]

I think you might have given up too easily. Call back and talk to another rep, if that doesn't work go up the chain until you talk to someone who can do it. Or you can just say you're a long time client, don't want to keep an account open when you are paying for a card that is as expensive or more expensive then xyz (also their cards) and ask them what they can do for you. Put the ball in their court. Have an idea before hand what outcome is acceptable for you and go after it!

[PatronWizard11]

call back again and don't ask them, just tell them you want to product change to a different card. go ahead and do you research and find out what no fee charge you want so you can be straightforward and direct with them vs having to ask them a bunch of questions and seeming uncertain.

[frugaliknowit]

I would prefer you not cancel it, since I'd like to see your credit score in the "high 7's" or "low 8's" before you cancel an old account.

I went through this many years ago.  My approach was that I followed the phone prompts to "cancel account".  Someone always picks up the phone whose job it is to talk you into not cancelling.  Tell them you are cancelling unless they waive the fee (don't be wishy washy).  My guess is, they will waive, or they will convert it to another card.

It is too expensive for them to lose a customer.  It costs several hundred dollars to score a customer.  Good luck!

[Drifterrider]

Credit Score: Between 730-760 depending on source


Total Credit Limit: $68,000 (I spend $2,000-$3,000 per month on these, always paying in full)

Unless you have the salary to support that high level of available credit, that is holding you back much more than cancelling an account.

My scores are all over 800.  There are a few items that show up on my report such as:

-2 points for recent accounts (it appears anything under 10 years is recent).

-3 points for not having any department store cards (haven't had them in decades).

Call the company and tell them you would love to stay with them but you aren't paying a fee as they get enough from the discount they charge the merchants.  If they disagree, cancel and move on.

[dougules]

Do you have a local credit union you could become a member of?  I'd get a card through them.  Paying credit card fees is ridiculous. 

[forummm]

Credit Score: Between 730-760 depending on source


Total Credit Limit: $68,000 (I spend $2,000-$3,000 per month on these, always paying in full)

Unless you have the salary to support that high level of available credit, that is holding you back much more than cancelling an account.

Having a lot of available and unused credit does not hurt your score. It can actually help keep your score up even if you carry a balance (by keeping your credit utilization as percent of total available low).

[Guesl982374]

You are thinking too much about this. It's a credit card, cancel it and move on. Your credit score is good and if you are on this board than you most likely have healthy savings and above average habits, a different of a few points on your credit score isn't going to make any difference in your life.

Focus on "moving the needle" e.g. big reductions in expenses or increasing income.

[SimplyMarvie]

I was in a similar situation and DID cancel.

My score is in a similar range to yours, and this was by far my oldest card (didn't use credit cards at all until I was in my early 30's, and had just that one (with a limit of $400) for years, before I took my current job which has a ton of paying upfront and getting reimbursed to it. This card was four years older than all the rest of my cards.

The fee was $79 per year. On a $400 credit line. Which I never used. So what ended up happening every year is that I would set a reminder to pay the fee, just to keep the 'length of score' part of my credit score in the green. It was due right around the holidays, so every year I would forget, get increasingly panicked letters sent to old addresses (I move a lot for work) until one caught up with me, and then call and ask them to waive the fee, which they would do. I never paid the fee, but I also never used to stupid card.

This year I finally decided that this was frankly the stupidest thing I could possibly imagine doing and there had to be a better way. I called Capital One. Can they take the fee away from the card? No. Even though I've never paid it in the life of the card? No. Can I talk to a supervisor? Yes. Can she permanently waive the fee? No. Can I switch to a different card that is more in line with my spending patterns. No, because they have no way of knowing my spending patterns because I never use their card. Fair enough; can they increase my credit line to a point where there would actually be some logic to using the card? (I was looking for a new emergency card, and thought this one would be a good bet because they keep it open even though I never use it... unlike my last card, where I discovered in an emergency that they put a 'hold' on the account if you don't use it once a month). After having the card for 10 years, with a credit score in the high 700s, they offered to increase my credit limit to $500.

Flushed! According to the tracker, my score went down between 7-11 points, but damn is it nice not to have to worry about that stupid-ass fee.

[kpd905]

How old is your 2nd oldest card?  And does it have a fee?