Credit One - Increased Annual Fee - What should I do???

[Anonymous]

I received a letter from Credit One today which states that effective June 3rd they are increasing their annual fee from $69/year ($5.75 mth) to $99/yr ($8.25 mth). You have to pay this fee monthly even if you don't use the card. 

I was struggling mentally with paying the lower fee monthly but now they have gone up, I am wondering if I should close the account since I now have other cards. On the other hand, I don't want to hurt my score which I have struggled to rebuild and if I have the pay the $8.25/mth, I will do so albeit begrudgingly. LOL

Credit One was one of the few companies that would give me a card after I filed for Chapter 7 back in March 2009. Post BK most of my cards started out with lower limits that have since increased... I was able to open up several credit cards and they are now as follows:

Chadwicks, limit $580, owe $0 (opened in 11/04)

Credit One, limit $600, owe $106 (opened in 9/09)

Navy Federal CU, limit $500, owe $98 (opened in 9/09) - only secured card I have

Orchard Bank, limit $900, owe $118 (opened in 9/09)

Navy Federal CU, limit $2000, owe $1500 (opened in 3/11) - util. is high, had to chg $1000 for emergency purchase, will be paid in full within six months

Capital One, limit $500, owe $134 (opened in 3/11/), will increase to $750 if I make 6 on time payments-which I will

With these balances, limits, and open dates, should I keep the Credit One account open and if so when would be a good time to close it.

Thanks in advance for all of help!!!!

[creditguy-378]

i would close it if you don't want to pay it

[MarineVietVet]

The only way that closing this will hurt you score wise is if you lose that $500 CL and your utilization goes up a bit. There a couple of scenarios.

1. If you close this and the CL and balance are still reported then both of them will be used in utilization calculation and the overall utilization will remain at 39%.

2. If you lose that CL upon closing this card your utilization will go up to 43%. Not a real big jump but it will go up.

Here is an excellent thread talking about Closing Credit Cards.

If it were me (and it isn't) I would get rid of this card and take the chance of my utilization going up 4%. To me it's worth not having to pay that $99 AF. And remember that scoring has no memory. As you pay down your CC debt each month that will reflect in lower balances and lower utilization and should result in a higher score.

IMO (In My Opinion) I would opt for saving a future $99 a year on that AF. But the decision is yours.

Edited for a typo.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[tntexans72]

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@MarineVietVet wrote:

The only way that closing this will hurt you score wise if if you lose that $500 CL and your utilization goes up a bit. There a couple of scenarios.

1. If you close this and the CL and balance are still reported then both of them will be used in utilization calculation and the overall utilization will remain at 39%.

2. If you lose that CL upon closing this card your utilization will go up to 43%. Not a real big jump but it will go up.

Here is an excellent thread talking about Closing Credit Cards.

If it were me (and it isn't) I would get rid of this card and take the chance of my utilization going up 4%. To me it's worth not having to pay that $99 AF. And remember that scoring has no memory. As you pay down your CC debt each month that will reflect in lower balances and lower utilization and should result in a higher score.

IMO (In My Opinion) I would opt for saving a future $99 a year on that AF. But the decision is yours.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

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+ 1.....I would tell them to shove it. I understand you want to rebuilt your credit score, etc....but paying that kind of AF IMHO is ridiculous. Just paid your cards down and overtime with your payment, credit history, your score will go up. In the meantime, don't have too many cards with AF.

[Anonymous]

Thanks to you all for the great information. All of your comments were very useful. I can pay the small $100 balance off with no problem and then close it in the next month before that fee kicks in at a higher rate.  I am also going to be paying my other balances down as well ... just use them periodically so there is some history of charge and pay which helps with getting the limits increased. 

Thanks again!

[JayRizzo]

First, ask for a supervisor or escalate to the Department of the President, if necessary, but see if you can get this newly increased membership fee waived for 6 months.  I don't think many places with monthly membership fees will waive the entire year, but try to squeeze out 6 months of free usage -- at least you'll extend the life of this card another 6 months for free.  If not, give 'em the BOOT!  But don't just stop at a level-1 CSR, they're scripted to say no.  Escalate, Escalate, Escalate!!!

[Open123]

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@JayRizzo wrote:

First, ask for a supervisor or escalate to the Department of the President, if necessary, but see if you can get this newly increased membership fee waived for 6 months.  I don't think many places with monthly membership fees will waive the entire year, but try to squeeze out 6 months of free usage -- at least you'll extend the life of this card another 6 months for free.  If not, give 'em the BOOT!  But don't just stop at a level-1 CSR, they're scripted to say no.  Escalate, Escalate, Escalate!!!

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Couldn't agree more.

At your earliest convenience when you find a replacement card, you shoud get rid of Credit One.  Aside from extremely limited use duing an early desperation rebuidling phase, I can't imagine any reason to keep this kind of card.