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New Visitor
Kate_in_Hershey
Posts: 2
Registered: ‎01-15-2008

Cancelling Credit Cards with an annual fee

Hello,
 
I have been working hard to finally pay off my high interest credit cards.  I actually have 8 open (1 closed) credit cards.  Yes, I am aware that I am an idiot to have that many.  Anyways this month, I am able to pay off 5 of the cards and should have the other 4 paid off by the end year.  Four of the cards that I have open have annual fees attached to them.  I have already cancelled one of the cards because there was a monthly fee.  My mother was telling me that it would actually hurt my credit score if I actually cancelled these cards.  My problem is I don't want to keep paying for an annual fee.  My credit score is really bad now, which is why I have the cards that have annual fees.  Should I contact the credit card companies and see if I can have the annual fees removed or would these cards be better to just cancel them?  The other cards are a JC Penney's, Sears, and Goodyear cards and then a UPromise card and a Visa that I have through my credit union that which both have a low interest rate.  The UPromise and Visa are both cards that I am paying off and I still have the Penney's and a Capital One card, which is one that has an annual fee.  Any help and advice will be greatly appreciated.
 
Thanks!
Established Contributor
AWLEGZ
Posts: 762
Registered: ‎10-23-2007

Re: Cancelling Credit Cards with an annual fee

if you cancel a card with a balance on it it will hurt your score--however after its paid in full and you want to cancel you can do that--from my understanding you get the TL still on your reports for many years since its positive credit it helps out with your overall age of accounts---however you do not want to cancel any card until you got UTI paid down definitely under 50 percent and preferrably between 1-9 percent ---your scores will probably increase from this and after you got all your accounts in order I would definitely cancel those AF cards--if not call and see if they will waive the AF for you since you have had the cards for quite some time
I want to join the 700 club one day I am getting there :smileywink:
FICOS 12/17/07 EQ-597 EX-651 and TU-651
FICOS 01/18/07 EQ-594 EX-651 and TU-662 FICOS
04/21/2008 TU-680 EQ-613 EX-688
Moderator Emeritus
Timothy
Posts: 9,252
Registered: ‎03-19-2007

Re: Cancelling Credit Cards with an annual fee

You areNOT an idiot for having many cards-
I am DOWN to 10 -
 
Call the backdoor number for Capital One- ask for APR reduction, CLI, AF reduction/elimination.
 
Who are the other creditors that have an AF?
Established Contributor
AWLEGZ
Posts: 762
Registered: ‎10-23-2007

Re: Cancelling Credit Cards with an annual fee

oh yeah Kate by the way i have a total of 9 cards myself --its not how many cards you have its how well you manage them
I want to join the 700 club one day I am getting there :smileywink:
FICOS 12/17/07 EQ-597 EX-651 and TU-651
FICOS 01/18/07 EQ-594 EX-651 and TU-662 FICOS
04/21/2008 TU-680 EQ-613 EX-688
New Visitor
Kate_in_Hershey
Posts: 2
Registered: ‎01-15-2008

Re: Cancelling Credit Cards with an annual fee

The other companies are Credit One Bank (which is the one that I have cancelled), Merrick Bank, and Orchard Bank.  I have had Credit One and Merrick for about 1 year and Orchard and Capital One for almost 2 years now. 
 
Does anyone have the backdoor number for Capital One or can anyone tell me where to find it?
 
 
Established Contributor
AWLEGZ
Posts: 762
Registered: ‎10-23-2007

Re: Cancelling Credit Cards with an annual fee

dont know it by hard put in the search capital one back door number it will come up from one of these threads on here
I want to join the 700 club one day I am getting there :smileywink:
FICOS 12/17/07 EQ-597 EX-651 and TU-651
FICOS 01/18/07 EQ-594 EX-651 and TU-662 FICOS
04/21/2008 TU-680 EQ-613 EX-688
Moderator Emeritus
Timothy
Posts: 9,252
Registered: ‎03-19-2007

Re: Cancelling Credit Cards with an annual fee

1-800-889-9939

Kate_in_Hershey wrote:
The other companies are Credit One Bank (which is the one that I have cancelled), Merrick Bank, and Orchard Bank.  I have had Credit One and Merrick for about 1 year and Orchard and Capital One for almost 2 years now. 
 
Does anyone have the backdoor number for Capital One or can anyone tell me where to find it?
 
 



Senior Contributor
Sylviatob
Posts: 4,596
Registered: ‎09-14-2007

Re: Cancelling Credit Cards with an annual fee

Hi Kate, welcome to the forum. As you can tell by the responses thus far, there are very knowledgeable people here to help you get credit healthy.

Gosh don't feel bad about 8 cards! I have 13, but 5 of them are in an envelope in my lingerie drawer. I don't use them.

If you do plan to close some cc's make darn sure that they have a zero balance on them. And yes, it's perfectly justified in closing cc's that have annual fees. I did that to one 2 months ago(Applied Bank).

I'd suggest keeping your Cap1 cards if you can comfortably afford to do so. I've had 3 Cap1 cards(now down to 2, as I combined 2 of them) and with spotless payment history they may eventually do away with the annual and monthly fees. They are a very conservative lender though. It will take some time.
"Never ever, ever be late. Never" (FUTR)
Senior Contributor
ilovepizza
Posts: 3,071
Registered: ‎05-17-2007

Re: Cancelling Credit Cards with an annual fee

I was up to about 20 cards at one point. :smileyhappy: Canceling won't hurt if you have $0 revolving debt. When you cancel you loose the credit line advantage helping fight the debt. Sometimes it is worth paying an annual fee if they give you a good credit line. If it is these $100 and $200 lines with fees, it might not be worth it if you can get prime cards. They do help build history too. You have to figure out if the credit lines are worth the fees. Other than that they stay on your CR after canceled so I dump the fee cards usually. If you are not able to get prime cards with out fees, you might consider keeping all your cards until you can replace them with prime. These cards are building your credit. If you cancel them you might slow down the process. If you have a few prime cards already, it doesn't matter. If you can not afford the fees, that is another story all together.
If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc
Frequent Contributor
PayYouNever
Posts: 396
Registered: ‎08-11-2007

Re: Cancelling Credit Cards with an annual fee

Kate,
The thing to remember -- if you have shot credit -- is to demonstrate a payment history with no lates and with the lowest possible Utl. What your CBR doesn't show is if you used the card or not, when you're paying it down. Just that you have an active balance.

If it takes you a full year to pay off the cards -- with or without fees -- by the time you reach May or June try to have the balances below 45%, then your FICO should be quite a bit higher than what it is now.

Closing cards is not the best strategy, because it reduces your aggregate CLs. Even if you are paying for CLs, keep in mind that until you have a FICO above 650 you might have trouble getting a prime card that has no annual fee. What you should try to do is get a prime Mastercard, maybe a Chase or Citi. And a AMEX, which does carry an annual fee though.

The monthly fees that suck ilk as First Premiere charge is the cost of rebuilding, so don't sweat it. When paying always include the cost of the finance charge and the monthly fee, to watch the balance reduce as fast as possible.

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