Credit card cancelation

[Anonymous]

I was just wondering if I have a credit card and it has a balance on it and I decide to cancel the card. Can they still charge a monthly fee and interest on a closed account. I think they can for the interest part but not on the maint fee is what they call it. Would really like to know for sure on both parts. 

[takeshi74]

Interest, yes.  Fee, not sure.

However, keep in mind that cards closed with balances usually report with maxed out utilization.  This is why it is not recommended to close a card with a balance.

[Anomalous]

---

@takeshi74 wrote:

Interest, yes.  Fee, not sure.

However, keep in mind that cards closed with balances usually report with maxed out utilization.  This is why it is not recommended to close a card with a balance.

---

+1

Try to pay the card off before closing.

[RobertEG]

Your account agreement should spell out the conditions for both owing and terminating of the annual fee.

That is critical to any creditor who is charging fees in addition to the principal balance of credit extended.

The reason is that if the debt ever goes to collection, the debt collector is subject to the requirements of the FDCPA in their collection activities.

FDCPA 808(1) makes it a violation for a debt collector to attempt to collection any amount, including any fee or interest, that is not specifically authorized in the account agreement creating the credit or othewise permitted by law.

They will thus almost invariably include specific definition in their account agreements of consumer obligation for annual fees.

Dig out your account agreement, which should contain your answer......

[Goblin]

I would pay off the balance before cancelling.

[Anonymous]

I cancelled a 5k credit card and my scores improved by 20 points and my utilization dropped to 22%. I think it depends on the card company and maybe they vary in how they report?

[marty56]

---

@Anonymous wrote:

I cancelled a 5k credit card and my scores improved by 20 points and my utilization dropped to 22%.

---

Closing a CC would not lower your % util.  Something else must have happend.

There is only 2 good reasons to close a CC.

1.  It charges a monthly or yearly fee.

2. It is a BofA card.

Ok #2 is just for me.

[Anonymous]

---

@marty56 wrote:

---

@Anonymous wrote:

I cancelled a 5k credit card and my scores improved by 20 points and my utilization dropped to 22%.

---

Closing a CC would not lower your % util.  Something else must have happend.

There is only 2 good reasons to close a CC.

1.  It charges a monthly or yearly fee.

2. It is a BofA card.

Ok #2 is just for me.

---

For me I did it because it was a joint account with my mom and I qualified for a larger line on my own finally so I could carry that balance just in my name. 

[NRB525]

---

@marty56 wrote:

---

@Anonymous wrote:

I cancelled a 5k credit card and my scores improved by 20 points and my utilization dropped to 22%.

---

Closing a CC would not lower your % util.  Something else must have happend.

There is only 2 good reasons to close a CC.

1.  It charges a monthly or yearly fee.

2. It is a BofA card.

Ok #2 is just for me.

---

My two favorite cards are BofA. You might have done something to tork them off?

And I believe a large closed account that I have was not being included in overall utilization calculations, and the CCC kept a large enough CL reporting anyway so it would not look like 100% utilization. So it does depend on the situation. YMMV.

[Anonymous]

It was a plains commerce from 10 years ago. I had a small balance and paid it off. Called to cancel but they couldn't cancel over phone said I had to request in writing. (Seriously) glad that is done.