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New Member
DCxMagus
Posts: 10
Registered: ‎07-15-2014
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Looking to close oldest CC becuase of annual fee + auto refinance question

First time poster trying to clean up my credit after being led astray/being personally irresponable with my credit in college.  Long story short I followed my Fathers advice and well turns out he's not that great with credit.  Now armed with more credit sense and experience trying to clean up the mess and the credit score.  I do have student loans, about $80K worth, private loans through sallie mae currently on in school deferment at 8.25%.  There is a question about the validity of the loans since I was caught up in the art institute debacle.  That situation will be looked into and a plan formulated after the situation below is taken care of.  Looking to end the car loan by the end of the year so I can fully focus on the loans and taking care of them after I figure out what I truly owe on them.  Using Credit Karma as my score guideline until I can get some money together for a score check here, but I have found it fairly accurate.  Anyway:

 

I just got approved for a cash back credit card bringing my total number of CCs to 2.
I have 1 auto loan 1yr 2 months in length, 33 months left $325 a month at a 22.9% rate(first car loan had about a 550 score when I took it out  car: 2004 Mazdaspeed miata I owe about $11,000 left on the loan, KBB on the car is currently ~ $7000)
old CC is 12yr 6months old (Bank of America)
new CC is 0yr 0months old - Just approved for it (Capital One Quicksilver One)
Average based on CreditKarma is now 6yr, after the new CC hits it will be ~3 years

The problem is the BofA CC is now charging a $60 annual fee and provides me no benefits what so ever.  The credit limit for is $600 and it is at about $550 but I will be paying it off completely end of next month or before.  The next annual fee is not due until April 2015
The QuicksilverOne card has a limit of $2000 annual fee of $39 but is a cash back reward card, 1.5% flat rate reward.

I want to ditch the BofA CC and it's annual fee as the QuickSilverOne card's annual fee will be offset by the rewards I acquire with the card.  QuickSilverOne card will never carry a balance as everything will be paid for as items are purchased so APR isn't important but its has intro 0% till April 2015 after that it's 22.9%.

Now I am currently upside down with the car loan which I plan to rectify by the end of the year, most likely much sooner.  APR for that is 22.9%.  I currently show 620 on CreditKarma.  Using the estimator tool paying off the BofA card completely and having this QuickSilverOne CC will bring me close to 660 on CK.

I want to refinance the auto loan once I am ahead of it again in order to save money in interest while still throwing all extra money at the loan anyway.

Is it in my best interest to keep the BofA CC active until I refinance in order to keep a higher Credit score since the annual fee due date is so far in advance or should I just close it now?

Also after the refinance, should I be worried about the effect on my Credit score that will happen when I do close the BofA CC?  The estimate says closing the BofA account will seriously drop my Credit score, down to about 585, but I really don't care about the short term effect after the refinance goes through and I have the lower rate, I have no other big purchase plans in the near future.

I've read conflicting advice on the effect of closing old CCs and their effects on credit score and I thinking because I only have 2 CC accounts it's effect might be magnified in my case.

If it matters the BofA annual fee could be offset by the rewards of the QuicksilverOne card as well, but obviously paying a fee for no benefit is rather silly.

Thank you for your time and advice

Contributor
H14
Posts: 92
Registered: ‎05-24-2014
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Re: Looking to close oldest CC becuase of annual fee + auto refinance question

I would say call up Bofa and see if they will do a PC (product change) from that card to one with no AF. It will very likely look better to have it remain open. 

Moderator
Kenny
Posts: 6,019
Registered: ‎01-15-2009
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Re: Looking to close oldest CC becuase of annual fee + auto refinance question

Bank of America is EXCELLENT with product changes. Easy to chat and PC to a different card.. In your situation maybe the Better Balance Rewards would be better since you're carrying a balance each month anyway and you'd get a $25 dollar rebate each quarter for carrying a small balance and paying "more than the minimum." Look it up. It's a good deal, but if not -- PC to something else like Cash Rewards or something. Incredibly easy and if not just e-mail the CEO and you'll get a GREAT response from the CSRs that call from their. I promise you. :smileyhappy:
Starting Score: EQ04: 748 (1/31/14) - TU08: 755 (1/06/14)
Current Score:EX08:776(11/05) - EQ04:770(10/31) - EQ08:796(11/08) - TU08:798(11/18)
Goal Score: 800+
New Member
DCxMagus
Posts: 10
Registered: ‎07-15-2014
0

Re: Looking to close oldest CC becuase of annual fee + auto refinance question

[ Edited ]

hmmm I didn't know that was even a possiability...

Seems like it would be worth it to Product Change the card to a BankAmericard Cash Rewards use that card for all my Gas (3%) and Grocery store (2%) purchase then use the QuicksilverOne Card for all other Purchases(1.5% over the BankAmericard's 1%) in order to maximize Cash back.  This would keep both cards activate and producing for me at their max potenial.  In a quarter I don't think I pass $1500 in gas and Grocery charges but I can set up an excel and track it.  If/when I do just switch to the QuicksilverOne for everything until the next quarter.  Also I have a BofA Checking account, so if I let them direct despoit the rewards into that account that's another bonus 10%.

 

One question, if anyone knows the answer, if a Product Change considered a Balance Transfer?  If so I can utilize the 0% APR for 12 months which just lets me get the process going a bit sooner, if not I would wanna wait till I have the cash in hand to clear the balance before switching cards.

I'm trying to not to keep a balance on the cards as I don't want the high interest rate inherent to these types of cards to eat away at the potiental profit they are producing.

 

Thanks for the Advice!  Looks like I have a few phone calls to make =)

Established Contributor
MT936
Posts: 662
Registered: ‎06-28-2014
0

Re: Looking to close oldest CC becuase of annual fee + auto refinance question

If you can product change definitely do it otherwise if it is costing you to keep it, cancel it asap

NPSL...................$7500..................$5100...................$2500...................$2750..................$1300..................$500..........

21 year old college student. 751 FICO. Been building credit since age 17. Last APP 7/14/14

Moderator
Kenny
Posts: 6,019
Registered: ‎01-15-2009
0

Re: Looking to close oldest CC becuase of annual fee + auto refinance question

To answer your question -- a product change is NOT the same thing as a balance transfer.
Starting Score: EQ04: 748 (1/31/14) - TU08: 755 (1/06/14)
Current Score:EX08:776(11/05) - EQ04:770(10/31) - EQ08:796(11/08) - TU08:798(11/18)
Goal Score: 800+
Valued Contributor
takeshi74
Posts: 3,042
Registered: ‎06-05-2013
0

Re: Looking to close oldest CC becuase of annual fee + auto refinance question


DCxMagus wrote:

I've read conflicting advice on the effect of closing old CCs and their effects on credit score and I thinking because I only have 2 CC accounts it's effect might be magnified in my case.

 


There's a sticky on closing credit cards:

http://ficoforums.myfico.com/t5/Credit-Cards/Closing-Credit-Cards/m-p/347190?jump=true

 

I'd also suggest seeing if you can PC it.

New Member
DCxMagus
Posts: 10
Registered: ‎07-15-2014
0

Re: Looking to close oldest CC becuase of annual fee + auto refinance question

I'll be sending out my first call tomorrow to brooch the topic of the Product Change to a BankAmericard cash rewards, let you all know how it goes!

New Member
DCxMagus
Posts: 10
Registered: ‎07-15-2014
0

Re: Looking to close oldest CC becuase of annual fee + auto refinance question

Got the request in, pretty painless just gotta wait the 2-4 weeks now :smileylol:

Hoping to get the balance off the card with in that time frame so the transfer should go over without a hitch and I can start getting my rewards!

Regular Contributor
Red_Rena
Posts: 150
Registered: ‎08-17-2014
0

Re: Looking to close oldest CC becuase of annual fee + auto refinance question

OP, how did it go? Were you able to get the fee removed? I haven't been successful with them at all. PC'd twice in the last 2 years, still being charged the fee.
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