topic Re: Advice on closing accounts please! in Credit Cards

Advice on closing accounts please!

Charger_Fan19 — Sun, 14 Aug 2016 17:56:45 GMT

I refinanced my home and pulled out some of the equity to pay off my credit cards. There are still some balances but it dropped my overall utilization from pretty much maxed out to about 22% overall and saving about $900 a month in the minimum payment hamster wheel. I've had 2 cards (ones that I chose not to PIF with the equity) hit me with annual fees.

I know there are mixed feelings about closing accounts but I just assumed I would close the ones with annual fees as soon as they hit and leave the others open to help with utilization. The two that I'm considering closing are:

BOA platinum card, started out as a $300 secured and now has a $1500 limit with 14% int and $29 fee, 8 years old

BB Reward Zone, started out at $250 then went to $1000 but they dropped my limit to $720 when I had credit problems a few years back. $59 fee 10 years old

I'm having issues because my AAoA is only about 3.7 years and I've heard its wrong to mess with that. On the plus side it drops my overall utilization to about 19% because these cards are maxed. I can pay them off and close within the week if its recommended.

Re: Advice on closing accounts please!

Anonymous — Sun, 14 Aug 2016 18:07:12 GMT

First it will not affect your AAOA as the closed accounts will stay on your reports for ten years but it will not lower your utilization closing them will raise utilization as the balances will still be included in the calculation but the credit limits of those cards will not. Have you tried getting BOA to upgrade the secured card to an unsecured account.

Re: Advice on closing accounts please!

Charger_Fan19 — Sun, 14 Aug 2016 18:21:31 GMT

Thats good to know about the AAoA, its just that these are some of my oldest cards so I'm hesitant. And as to the utilization thing, I was looking at the wrong column. After these close I will be at 19% overall. The BOA is unsecured and has been after the first 6 months.

Re: Advice on closing accounts please!

Anonymous — Sun, 14 Aug 2016 19:05:22 GMT

Always get rid of cards with Annual Fees that you DONT use!

Re: Advice on closing accounts please!

Chickenpotpie — Sun, 14 Aug 2016 19:53:06 GMT

If you pay an annual fee and don't use the card, you pretty much answered the question. When it comes to stuff like this I think its best to be realistic. No reason to keep for AAoA as the info stays on your report for 10 years (so I've heard!) My personal feeling (and experience) is that you should get rid of cards that no longer work for you. I'm a pretty big adovocate of low as possible exposure to any one source, so while I don't keep a lot of cards, I've progressivly went to better cards as my scores allowed.

Just called today and closed my CapOne Venture One. It was the oldest card in the stack but I just didn't care, its doing nothing in my wallet except taking up space. Besides that, no CLI since like forever and NFCU replaced it with a much higher limit and lower rate.

You'll probably get a lot of different opinions, but ultimately, do the very best for your situation

Re: Advice on closing accounts please!

UFGuy2006 — Sun, 14 Aug 2016 20:16:36 GMT

@Anonymous wrote:
Always get rid of cards with Annual Fees that you DONT use!

Exactly! Makes managing the various cards easier if you don't have to worry about annual fees.

Re: Advice on closing accounts please!

Anonymous — Sun, 14 Aug 2016 20:16:41 GMT

@Chickenpotpie wrote:
If you pay an annual fee and don't use the card, you pretty much answered the question. When it comes to stuff like this I think its best to be realistic. No reason to keep for AAoA as the info stays on your report for 10 years (so I've heard!) My personal feeling (and experience) is that you should get rid of cards that no longer work for you. I'm a pretty big adovocate of low as possible exposure to any one source, so while I don't keep a lot of cards, I've progressivly went to better cards as my scores allowed.

Just called today and closed my CapOne Venture One. It was the oldest card in the stack but I just didn't care, its doing nothing in my wallet except taking up space. Besides that, no CLI since like forever and NFCU replaced it with a much higher limit and lower rate.

You'll probably get a lot of different opinions, but ultimately, do the very best for your situation

Right, the problem is that people don't know how to value a credit score, especially 10 years down the road, when a totally different system may be in place. In contrast, paying out $88 in AF for nothing is real money (albeit a fairly small amount). So like others, I would just close them now

Re: Advice on closing accounts please!

wasCB14 — Sun, 14 Aug 2016 21:06:01 GMT

@UFGuy2006 wrote:
@Anonymous wrote:
Always get rid of cards with Annual Fees that you DONT use!
Exactly! Makes managing the various cards easier if you don't have to worry about annual fees.

Another view would be that managing cards is (in certain circumstances) easier with annual fees. I'm not sure if I embrace this view entirely, but I can see some sense in it.

I do have some no-AF cards I really like (Freedom, It, Sallie Rewards). Getting 5%+ is always nice when there's no perk to consider. It's nice to have my oldest accounts be cards that remain useful and don't have AFs.

Most of the value I get from cards, though, comes from cards with annual fees. I travel and use the perks, so if a card doesn't have an annual fee, I generally find the rewards/bonus/perks don't justify my bothering with it in the first place.

Having a few great cards I use often...and cancelling them if and when they no longer suit me...I find easier than keeping a lot of no-AF "zombie" cards alive.

I see people talk about "simplifying" their wallets and closing store cards. I'd rather "simplify" after I've drained a card for a lot of value!

Re: Advice on closing accounts please!

sunkissed — Sun, 14 Aug 2016 21:14:37 GMT

Have you asked BoA for a product change to a card without an annual fee? I was able to change from a card with no rewards opened back in 2003 to the CashRewards card without any hassle.

Re: Advice on closing accounts please!

Charger_Fan19 — Wed, 17 Aug 2016 03:05:51 GMT

I called BOA today and the rep I talked to said she was submitting a request to refund my annual fee or product change to a card that has no fee, said it could take 3 days to respond. I also called citi and closed the Best Buy account. I half expected them to offer to refund the fee to keep the account but no dice. He asked if I had considered the impact to my credit file and I said yes. Then he wanted to confirm the only reason I was closing the account was the fee and I said yes. Then he put me on hold for about 5 minutes. When he came back said the fee had been reversed and my account was closed.

Re: Advice on closing accounts please!

takeshi74 — Wed, 17 Aug 2016 13:06:42 GMT

@Charger_Fan19 wrote:
I know there are mixed feelings about closing accounts but I just assumed I would close the ones with annual fees as soon as they hit and leave the others open to help with utilization. The two that I'm considering closing are:

Opinions really don't matter. You have make your decision based on your needs/wants/preferences/priorities -- not those of others. Everyone isn't in the same situation and everyone does not have the same preferences (common example is the "keep everything open is possible", "keep anything without an AF", "close what you don't need", etc mentalities) so of course people will come to different conclusions. It's not really just about the accounts themselves. You're an important factor in this decision. We can certainly provide feedback if you want to clarify what you're specifically looking to accomplish as well as your priorities and preferenes in these matters.

Include the info in the Closing Credit Cards thread linked in the Helpful Threads sticky in your decision makiing process.

@Charger_Fan19 wrote:
On the plus side it drops my overall utilization to about 19% because these cards are maxed. I can pay them off and close within the week if its recommended.

Individual revolving utilization matters as well. Get the maxed cards down ASAP. Then consider closing accounts.

@Charger_Fan19 wrote:
I'm having issues because my AAoA is only about 3.7 years and I've heard its wrong to mess with that.

Covered above and in the Closing Credit Cards thread but closing accounts doesn't immediately impact AAoA. However, opening a new account does.

Re: Advice on closing accounts please!

Charger_Fan19 — Thu, 25 Aug 2016 04:21:11 GMT

BOA refunded the annual fee so I left the card open. The Best Buy card said that they would reverse the fee once I closed the account but so far it hasn't posted. I called tonight and the agent confirmed that it was in process as of 8/23. She seemed shocked that it hadn't been submitted since I made the request on the 15th. The statement closes on 8/24 so I'm hoping it will happen before that cuts because I don't want a $59 balance on a closed account.