topic Re: Need help not sure of whether to close CC or not in Credit Cards

Need help not sure of whether to close CC or not

breakthecycle — Wed, 02 Sep 2009 18:59:44 GMT

I have had a CC account with First Bank of Delaware for over 2 years now. I originally got it to start on my long journey of rebuilding. I have always found there fees and service to be terrible. I have always PIF each month and no problems in that regard. Now I received a letter that their monthly maintenance fee is going up to $18 a month from $12 a month.

I have established other CC's and a auto loan with Honda during the time and have come a long way with my scores and history. The question is will it hurt my score to close this or should I bite the bullet another year. I can pay the bill with no problem, its just the principle of the scam they are running.

I also am going to be buying a home in the next several months so not sure what to do.

Re: Need help not sure of whether to close CC or not

Anonymous — Wed, 02 Sep 2009 19:06:44 GMT

@breakthecycle wrote:
I have had a CC account with First Bank of Delaware for over 2 years now. I originally got it to start on my long journey of rebuilding. I have always found there fees and service to be terrible. I have always PIF each month and no problems in that regard. Now I received a letter that their monthly maintenance fee is going up to $18 a month from $12 a month.

I have established other CC's and a auto loan with Honda during the time and have come a long way with my scores and history. The question is will it hurt my score to close this or should I bite the bullet another year. I can pay the bill with no problem, its just the principle of the scam they are running.

I also am going to be buying a home in the next several months so not sure what to do.

It won't hurt your scores to close it if you do not have any other balances, but the card does assist you with you UTIL calculation if you do. If the time frame for a home purchase is really a few months I would suggest you keep it open, get through your closing, app to replace the card and then close it. In the long term you really do not need to pay out $216/year for a credit card. Once that mortgage reports you should be able to do much better.

Re: Need help not sure of whether to close CC or not

Anonymous — Wed, 02 Sep 2009 19:08:58 GMT

dayum!!! wow - 18 bucks per month is kinda steep! I had a first premier and closed it out in a flash (was disgusted by the fact that i had to pay 7 bucks to make a payment online) - anyway IMO i wouldnt wanna carry any card with fees like that - I have an HSBC with a $39 annual fee that I got when I didnt know any better - but that one is getting closed soon!

Re: Need help not sure of whether to close CC or not

breakthecycle — Wed, 02 Sep 2009 19:12:29 GMT

Thank you. Yeah the $ paying the bill isn't the problem, its just insane to have a $18 a month fee. I can just bite the bullet a few more months. They also charge like $25 for every CLI which is only $75 each time. I have 3 other CC open at this time also.

Re: Need help not sure of whether to close CC or not

Anonymous — Wed, 02 Sep 2009 19:13:53 GMT

@Anonymous wrote:
dayum!!! wow - 18 bucks per month is kinda steep! I had a first premier and closed it out in a flash (was disgusted by the fact that i had to pay 7 bucks to make a payment online) - anyway IMO i wouldnt wanna carry any card with fees like that - I have an HSBC with a $39 annual fee that I got when I didnt know any better - but that one is getting closed soon!

Be sure to ask for an AF waiver before you close the card. When the front line CSR won't do it for you ask to speak to a retention specialist. Never even mention closing the card. It can be done, no matter what anyone says. (Mine has been permanently removed.)

Re: Need help not sure of whether to close CC or not

Anonymous — Wed, 02 Sep 2009 19:17:18 GMT

@breakthecycle wrote:
Thank you. Yeah the $ paying the bill isn't the problem, its just insane to have a $18 a month fee. I can just bite the bullet a few more months. They also charge like $25 for every CLI which is only $75 each time. I have 3 other CC open at this time also.

Charging for CLI's is a dreadful practice. Providian used to do this and then RJ you when you used the CL you just bought - a totally repugnant act. Best to do your pennace and move on when practicable.

Re: Need help not sure of whether to close CC or not

breakthecycle — Wed, 02 Sep 2009 19:20:18 GMT

Yeah so $266 a year just to own the card from the 2 CLI fees, and $18 month maintenance fee. I will close it after purchasing the home. Thank You very much!

Re: Need help not sure of whether to close CC or not

Anonymous — Wed, 02 Sep 2009 19:37:48 GMT

You will be amazed the extra debt you can pay off from saving on CC fees. I too think that keeping it open until closing may be beneficial but it may not be beneficial either - I work for a CU and our loan officers look at your relationship/income/credit score etc and not focus too much on issues such as UTIL (I would recommend it to be low) and Average age - you can tell them that you closed it due to fees etc. I would say though keep it open until you close anyhow just to be safe.

Re: Need help not sure of whether to close CC or not

Anonymous — Wed, 02 Sep 2009 19:40:32 GMT

@Anonymous wrote:
@Anonymous wrote:
dayum!!! wow - 18 bucks per month is kinda steep! I had a first premier and closed it out in a flash (was disgusted by the fact that i had to pay 7 bucks to make a payment online) - anyway IMO i wouldnt wanna carry any card with fees like that - I have an HSBC with a $39 annual fee that I got when I didnt know any better - but that one is getting closed soon!
Be sure to ask for an AF waiver before you close the card. When the front line CSR won't do it for you ask to speak to a retention specialist. Never even mention closing the card. It can be done, no matter what anyone says. (Mine has been permanently removed.)

I will definately ask for a waiver if they can do it and if not I am definately closing it - its SD'd for now though - I was using it a lot but not anymore since I got a CLI from BOA and I try and use my debit most of the time. Thanks for the tip bout the retention dept - I know I will need to talk to them but since its my newest card (9 months) - I really dont mind closing it to be honest - its a small CL and its affecting the AAOA of my accounts.

Re: Need help not sure of whether to close CC or not

Anonymous — Wed, 02 Sep 2009 19:40:38 GMT

There's no damage in closing the card before you purchase the home - unless losing that CL will affect your utilization percentage. Maybe get the calculator out - if your total utilization doesn't take a hit, you know you are free to lose the card and the monthly fees as soon as you like; it's done it's work in helping you rebuild - now it is just dead weight. (Actually, if your utilization does take a hit - pay your total CC balances down to better utilization percentages - then you can still lose the card without any pain). Good luck with your house hunting. We just refinanced at 4 7/8% Nice!!

Re: Need help not sure of whether to close CC or not

Anonymous — Wed, 02 Sep 2009 19:44:57 GMT

@Anonymous wrote:
You will be amazed the extra debt you can pay off from saving on CC fees. I too think that keeping it open until closing may be beneficial but it may not be beneficial either - I work for a CU and our loan officers look at your relationship/income/credit score etc and not focus too much on issues such as UTIL (I would recommend it to be low) and Average age - you can tell them that you closed it due to fees etc. I would say though keep it open until you close anyhow just to be safe.

If they consider the credit score they are impliciting considering UTIL. It is part and parcel of the score. Sometime the number of open TL's can be an issue. Too few is not a good idea.

Re: Need help not sure of whether to close CC or not

Anonymous — Wed, 02 Sep 2009 19:50:21 GMT

@Anonymous wrote:
There's no damage in closing the card before you purchase the home - unless losing that CL will affect your utilization percentage. Maybe get the calculator out - if your total utilization doesn't take a hit, you know you are free to lose the card and the monthly fees as soon as you like; it's done it's work in helping you rebuild - now it is just dead weight. (Actually, if your utilization does take a hit - pay your total CC balances down to better utilization percentages - then you can still lose the card without any pain). Good luck with your house hunting. We just refinanced at 4 7/8% Nice!!

It is always a good idea to have at least three open TL's reporting when app'ing for any type of financing.

Re: Need help not sure of whether to close CC or not

breakthecycle — Wed, 02 Sep 2009 20:52:31 GMT

My utilization is about 1% now. Thankfully I found this board and didn't realize how much that affects your score. I kept paying all my bills and my score was going nowhere. Once I realized I had to pay my debts down, my score jumped over 100 points in TU, a little over 90 with Equifax. I would have known about utilization rtio if I didn't join this site. I am glad I did. I just thought you pay bills and score goes up had no idea.

Re: Need help not sure of whether to close CC or not

cobaltnv — Wed, 02 Sep 2009 21:21:00 GMT

If you have a 1% utilization then I would seriously think about closing the card (assume your utilization will not jump up past 9% if you lose this CL). How many other cards do you have? If you have more than 2 other cards I would drop this card quickly. Annual fees are bad enough, but when that reach three digits they are unacceptable. The card has served its purpose in getting your credit restarted it is time for them to go feed on someone else.

Re: Need help not sure of whether to close CC or not

Anonymous — Thu, 03 Sep 2009 21:42:00 GMT

Having at least one bank or major CC reporting is important. OP has 3 other CC's reporting -- if one is a major bank (or Cap One, Discover, AmEx), they're in good shape. One is all you need, and a bank overdraft will fit the bill if it's reporting to the CRA's.

And, of course, it's good to have installment accounts in your mix for the best FICO score.

Number of accounts becomes important when reporting balances - too many reporting balances can ding you. One CC reporting gives most people the best results - YMMV.