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Getting Rid of Credit Cards With Annual Fees

Valued Member

Getting Rid of Credit Cards With Annual Fees

I've recently built up my credit again and all of my credit scores are 700+.  My problem is that I am stuck with five credit cards that have annual fees, unfortunately these are also my oldest credit card accounts.  I have gradually transitioned away from such accounts.  I have an Amazon and Walmart Discover cards now with no fees.  What I would like to do is get one or two more cards like the Walmart card that have the store and/or rewards tied into them with no annual fee and close the other accounts out.

 

My fear is that closing out such a substantial number of accounts with a total credit limit of $8000 and opening up new ones would be a serious hit on my credit report and/or score.  Is there any way to successfully maneuver such a feat with minimal damage done?

20 REPLIES
Frequent Contributor

Re: Getting Rid of Credit Cards With Annual Fees


wwtthhpp wrote:

I've recently built up my credit again and all of my credit scores are 700+.  My problem is that I am stuck with five credit cards that have annual fees, unfortunately these are also my oldest credit card accounts.  I have gradually transitioned away from such accounts.  I have an Amazon and Walmart Discover cards now with no fees.  What I would like to do is get one or two more cards like the Walmart card that have the store and/or rewards tied into them with no annual fee and close the other accounts out.

 

My fear is that closing out such a substantial number of accounts with a total credit limit of $8000 and opening up new ones would be a serious hit on my credit report and/or score.  Is there any way to successfully maneuver such a feat with minimal damage done?


Assuming there are no significant balances on any of these cards to have to worry about, my strategy would be to evaluate the amount of the annual fee vs. the benefits of the card (if any) and decide which one or two cards to cut first, then knock out one every 6 months.  If your credit is in reasonably good shape, I'd apply for its replacement first, then call in to close the existing account.  Some lenders are more willing than others to waive an annual fee, especially when it's the reason you're closing the account, so you may find one or more of the lenders on your list are willing to do that.  That'll buy you more time with that card, and you can shut down the next one in line.

 

That's the approach I have taken personally.

 

With five cards that's two and a half years to eliminate the annual fees on all of them, but again, I can almost guarantee you that at least one-- maybe two-- of those card issuers will waive/credit the fee if you call in to close the account because of it.  Don't expect to get the same treatment from them again next year, though.

 

5/2002 - Chapter 7
7/2011 - Equifax FICO 693
5/2012 - Equifax FICO 812! In the "800 Club!"
2/2013 - Lender-pulled EQ FICO 821 (car loan)
7/2014 - Lender-pulled EQ FICO 832 (car loan)
Valued Contributor

Re: Getting Rid of Credit Cards With Annual Fees


wwtthhpp wrote:

I've recently built up my credit again and all of my credit scores are 700+.  My problem is that I am stuck with five credit cards that have annual fees, unfortunately these are also my oldest credit card accounts.  I have gradually transitioned away from such accounts.  I have an Amazon and Walmart Discover cards now with no fees.  What I would like to do is get one or two more cards like the Walmart card that have the store and/or rewards tied into them with no annual fee and close the other accounts out.

 

My fear is that closing out such a substantial number of accounts with a total credit limit of $8000 and opening up new ones would be a serious hit on my credit report and/or score.  Is there any way to successfully maneuver such a feat with minimal damage done?


The closed accounts if positive will remain on your CR for another 10 years...You will more than likely lose your util. Here is a great sticky going into detail about closed accounts.

 

Closing Credit Cards

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Valued Contributor

Re: Getting Rid of Credit Cards With Annual Fees

I agree with the previous message, however in order to lessen the damaging effects of a lowered AAoA try to keep the oldest one as long as possible and see if they can waive the fee. Then follow the above's advice at replacing, trying to waive, and slowly close!


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Valued Contributor

Re: Getting Rid of Credit Cards With Annual Fees


daybreakgonesXe wrote:

I agree with the previous message, however in order to lessen the damaging effects of a lowered AAoA try to keep the oldest one as long as possible and see if they can waive the fee. Then follow the above's advice at replacing, trying to waive, and slowly close!


The only way the OP AAoA will change is if they open up new accounts... Closing accounts wont have an immedate affect on AAoA

ccpics2.jpg
Valued Contributor

Re: Getting Rid of Credit Cards With Annual Fees

Call those CC and see what they can do.....they might waive AF if you sweet talk to 'em...


Starting Score: 560
Current Score: 748 Wishlist: CSP, Simply Cash, SPG, BOLD, INK, United MP,
Goal Score: 800


Walmart: 10k |Usaa: 8k|BCE: 13k| Amex: NSPL|Dis: 9.4k|Cap: 5.5k|CAP: 2k|CSP: 13.4k| Pen:4.5k

Blogger

Re: Getting Rid of Credit Cards With Annual Fees

If you're not planning on applying for new credit in the next 6 months, the damage to your credit history from opening new accounts will be minimal. The effect of losing some age of account is almost negligible; when the closed accounts fall off your credit report, you will already have a bunch of 10+ year old accounts. 

Frequent Contributor

Re: Getting Rid of Credit Cards With Annual Fees

The first thing I would do is call each creditor and ask:

1. Is it possible to switch my card to another which doesn't have an AF? (Do some research into which card you want to switch to)

2. Does such a switch require a hard pull or soft pull of my CR?

3. Will the new card maintain my original card history?

 

If the answers are YES, SOFT and YES, do the switch

If the answers are YES, HARD and YES, I'd probably still do the switch.

If the answer to 1 is NO, cancel.

If the answer to 3 is NO, I'd still cancel unless the card I can switch to is something I really want and would use. (I don't like keeping useless cards)



06/30/2017 - EX 807 (Credit Scorecard EX FICO® Score 8, range 300-850)
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07/25/2017 - EQ 842 (Citi EQ FICO® Bankcard Score 8, range 250-900)
GOAL - 800! - App free since 12/13/2015
Valued Contributor

Re: Getting Rid of Credit Cards With Annual Fees

close them
5/2012: 560 credit scores across the board
12/2014 750+
3/2017 780+
5/2017 800+
New Member

Re: Getting Rid of Credit Cards With Annual Fees

what are your cards that you have that have the AFs?  if you list them, then maybe we can tell you which banks are amenable to changing your card or waiving the AF.