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Question about a $20 annual fee

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Anonymous
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Question about a $20 annual fee

Why did my FICO score drop form a 779 to a 771 whan a credit card with a ZERO balance charges me $20.00 for the annual fee which I paid?  This credit card has a $17,000 line of credit with a ZERO balance. I never use it but since it has been open since 1988 i keep it around to help my credit score.  Please explain the logic behind this???
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3 REPLIES 3
Lel
Moderator Emeritus

Re: Question about a $20 annual fee

Your long-idle card is now reporting a balance, so to the FICO scoring model it looks like you've recently started using a dormant credit account.  "New activity" on a previously dormant card is interpreted by some as a sign of money difficulties, in the same way that opening new credit accounts is sometimes a red flag.

 

The recent activity on an unused card can result in a small decrease in score.  This drop is often just temporary.  The good news for you is that your score is still very good, even with the drop.

 

As an aside, you might want to consider using that card at least every few months.  Credit card companies are cutting credit limits and closing accounts like crazy, and they typically target unused credit cards, since they lose money on these accounts.  Since you pay an annual fee, then maybe your card won't be high on the hit list, but why take the chance?  21 years would be a lot of credit history to lose, as would be your $17,000 credit limit.

Message 2 of 4
creditwherecreditisdue
Senior Contributor

Re: Question about a $20 annual fee

Welcome to the forums!

 

Who issued this card? I would like to know which issuer is allowing an unused CC to sit idle like this. Of course the AF does count as activity so it does get used once a year. But quarterly use would be a good idea if you would like to have a greater chance of this account remaining as it is.

Message 3 of 4
RobertEG
Legendary Contributor

Re: Question about a $20 annual fee

You have a CC with a $17K CL that has an annual fee?

Amazing!

If the fee is legit, pay it, and then contact them immediately, and get that anual fee removed.  That is rediculous!

 

Annual fees are assessed to keep low end feeders.  A 17K CL is not a bottom feeder.....

Is it an AMEX card, perchance?

Message Edited by RobertEG on 08-31-2009 12:13 AM
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