topic Re: Would you pay the fee? in Credit Cards

Would you pay the fee?

laz98 — Tue, 21 Jun 2011 03:27:27 GMT

got notice today that the AF on my gf's oldest (non-store) card / highest limit card will be assessed next month. it is her oldest card by almost 2 years.

we don't really use the card anymore, because the APR is ridiculous (don't start with the PIF stuff, please, we know), so it really just sits there. there are no frills to this card, no perks or bonuses or anything.

i double-paid the final balance by mistake, & had a credit, which i thought i could use once in a while to keep the card active, but they refunded it to us after one cycle.

anyway, is it worth paying the $55 fee to keep the $15,500 line open? her next highest line is $14,000 but that just got opened 7 months ago (navy federal).

Re: Would you pay the fee?

trumpet-205 — Tue, 21 Jun 2011 03:35:02 GMT

Even if she closes this account, it'll stay on her credit reports for 10 years. By then Navy Fed will catch up and become the oldest account.

Re: Would you pay the fee?

Anonymous — Tue, 21 Jun 2011 03:35:48 GMT

Can you PC to another card they issue?

Re: Would you pay the fee?

tntexans72 — Tue, 21 Jun 2011 03:35:58 GMT

@laz98 wrote:
got notice today that the AF on my gf's oldest (non-store) card / highest limit card will be assessed next month. it is her oldest card by almost 2 years.

we don't really use the card anymore, because the APR is ridiculous (don't start with the PIF stuff, please, we know), so it really just sits there. there are no frills to this card, no perks or bonuses or anything.

i double-paid the final balance by mistake, & had a credit, which i thought i could use once in a while to keep the card active, but they refunded it to us after one cycle.

anyway, is it worth paying the $55 fee to keep the $15,500 line open? her next highest line is $14,000 but that just got opened 7 months ago (navy federal).

Do they have another CC you can PC to without a AF?

I sure hate to get rid of the $15K CL, even if I had to pay the $55 AF.

It's tough getting that type of CL now days with this financial crisis....may I ask what is your APR %?

Re: Would you pay the fee?

slarano — Tue, 21 Jun 2011 03:37:33 GMT

Correct, but the CL will no longer be factored into overall Util %, and losing that trade line could be a detriment to their overall credit profile in terms of available credit.

Re: Would you pay the fee?

laz98 — Tue, 21 Jun 2011 03:41:47 GMT

thank you for the fast responses!

1. can't PC, they only offer the one card (it's not a big bank).

2. the APR is 29.99%.

3. the CL is about 25% of her total available credit.

Re: Would you pay the fee?

smc733 — Tue, 21 Jun 2011 03:45:27 GMT

Close it, for people whose credit is in good standing, paying an AF for age is asinine unless you benefit from getting in the 830s club.

Re: Would you pay the fee?

slarano — Tue, 21 Jun 2011 03:55:11 GMT

Close it even though it makes up 25% of her available credit? That seems kind of drastic, no?

Re: Would you pay the fee?

MarineVietVet — Tue, 21 Jun 2011 04:17:18 GMT

@smc733 wrote:
Close it, for people whose credit is in good standing, paying an AF for age is asinine unless you benefit from getting in the 830s club.

Calling someone foolish for such a decision is not exactly the nicest way to express your opinion is it? We might not agree with what someone else does but we need to try and be respectful in our response.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: Would you pay the fee?

smc733 — Tue, 21 Jun 2011 04:22:40 GMT

@MarineVietVet wrote:
@smc733 wrote:
Close it, for people whose credit is in good standing, paying an AF for age is asinine unless you benefit from getting in the 830s club.

Calling someone foolish for such a decision is not exactly the nicest way to express your opinion is it? We might not agree with what someone else does but we need to try and be respectful in our response.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

I wasn't referring to anyone specifically...

I see it all the time though, I just generally disagree with people who recommend keeping a $59AF Orchard card open for age, for example. Just some people have recommended things based on FICO, not necessarily the best fiscal advice.

In this case, unless util is high, I still vote to dump it.

Re: Would you pay the fee?

Anonymous — Tue, 21 Jun 2011 04:23:56 GMT

I agree that you should make the best financial decision. Eventually things will work themselves out.

Re: Would you pay the fee?

laz98 — Tue, 21 Jun 2011 04:32:55 GMT

well, my issue is i've almost always had bad credit, so managing her good credit has been a bit different for me so making the smartest financial decision isn't exactly clear-cut to me here, even if it seems obvious to others.

here is a snapshot of her cards:

15,500: 7 years old in about 2 weeks

14,000: 7 months

10,000: 5 years, 3 months

5,000: 1 year next month

2,000: new chase freedom opened friday

store cards, she has 6. the oldest card she has is 7.5 years old, just a $1,920 CL. they range from $1,100 to $4,000, & most were opened between 2007 & 2009. only one was opened this year, her sears card, which was opened in march.

her total util right now is about 25%.

Re: Would you pay the fee?

MarineVietVet — Tue, 21 Jun 2011 04:34:07 GMT

smc733 wrote:

I wasn't referring to anyone specifically...

I see it all the time though, I just generally disagree with people who recommend keeping a $59AF Orchard card open for age, for example. Just some people have recommended things based on FICO, not necessarily the best fiscal advice.

In this case, unless util is high, I still vote to dump it.

The OP was asking whether to close the card or not. By your generalized statement that the action of keeping a card open with an AF is foolish then if the OP decides to keep the card then by extension the OP is then acting foolishly.

But If I misread your intent I apologize.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: Would you pay the fee?

slarano — Tue, 21 Jun 2011 04:51:30 GMT

Take this example...if you have roughly 62,000 in credit, and are currently at 25% util. of that credit, then losing that trade line would lower your credit profile to around 46,500, and from that your overall util. would jump to over 33%.

Re: Would you pay the fee?

laz98 — Tue, 21 Jun 2011 04:55:58 GMT

thanks simon. yea, i did the math, but it wasnt an astronomical increase, so it wasn't a very convincing argument

Re: Would you pay the fee?

haulingthescoreup — Tue, 21 Jun 2011 06:21:43 GMT

@laz98 wrote:
well, my issue is i've almost always had bad credit, so managing her good credit has been a bit different for me so making the smartest financial decision isn't exactly clear-cut to me here, even if it seems obvious to others.

here is a snapshot of her cards:

15,500: 7 years old in about 2 weeks
14,000: 7 months
10,000: 5 years, 3 months
5,000: 1 year next month
2,000: new chase freedom opened friday

store cards, she has 6. the oldest card she has is 7.5 years old, just a $1,920 CL. they range from $1,100 to $4,000, & most were opened between 2007 & 2009. only one was opened this year, her sears card, which was opened in march.

her total util right now is about 25%.

Two things to consider: impact on longest history/ AAoA, and impact on util.

With the slightly older store card, longest history is OK.

Ten years from now, this might impact her AAoA, but as long as it keeps reporting (even though closed), it's still helping.

-- so far, so good, I think

The potential issue is if she lets balances report. This card is almost 1/3 of her total available revolving credit. If she ever has big balances report (i.e., for a big BT at 0%), closing this card might hurt.

I'd recommend dividing her usual reported balances by the new total credit available ($46,500 - 15,500). What's the new reported util? If it's not over 9%, I'd say go on and don't worry about it.

-- duh me, I just saw that you posted that she has ~25% reported util... This is such a big CL that you might want to bite the bullet and hang onto it until the reported balances are reduced.

Re: Would you pay the fee?

laz98 — Tue, 21 Jun 2011 06:38:57 GMT

thanks hauling, for that awesome in-depth reply!

yeah, our tendency to carry balances comes & goes, so i guess i will have to keep it, until she gets another really high limit card. we were hoping chase would at least give her 5k, but no dice i'm waiting for her auto loan inquiries to drop in november to try to get her in with usaa

Re: Would you pay the fee?

smc733 — Tue, 21 Jun 2011 12:12:58 GMT

@MarineVietVet wrote:
@smc733 wrote:

I wasn't referring to anyone specifically...

I see it all the time though, I just generally disagree with people who recommend keeping a $59AF Orchard card open for age, for example. Just some people have recommended things based on FICO, not necessarily the best fiscal advice.

In this case, unless util is high, I still vote to dump it.

The OP was asking whether to close the card or not. By your generalized statement that the action of keeping a card open with an AF is foolish then if the OP decides to keep the card then by extension the OP is then acting foolishly.

But If I misread your intent I apologize.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Nah, that was all my bad... It came across way different than I intended.

Re: Would you pay the fee?

p- — Tue, 21 Jun 2011 15:00:00 GMT

@laz98 wrote:
thanks hauling, for that awesome in-depth reply!

yeah, our tendency to carry balances comes & goes, so i guess i will have to keep it, until she gets another really high limit card. we were hoping chase would at least give her 5k, but no dice i'm waiting for her auto loan inquiries to drop in november to try to get her in with usaa

Did you try calling them and see if they will waive the AF? It's worth a try. Check the "My Offers" tab on her USAA. She may already have a pre-approved offer. Also, the effect of inquiries diminishes after a year; if they are older than tht, maybe it's time to apply now. Or if they are recent, why not apply and risk getting denied, knowing that the inq will drop off pretty quickly anyway?

Re: Would you pay the fee?

laz98 — Tue, 21 Jun 2011 19:00:58 GMT

@p- wrote:

Did you try calling them and see if they will waive the AF? It's worth a try. Check the "My Offers" tab on her USAA. She may already have a pre-approved offer. Also, the effect of inquiries diminishes after a year; if they are older than tht, maybe it's time to apply now. Or if they are recent, why not apply and risk getting denied, knowing that the inq will drop off pretty quickly anyway?

no, i haven't called them.

she isn't a full member on USAA, so she doesn't get anything on the "my offers" tab, unfortunately.

the inquiries are not older than a year, they are from this past november. i don't want to apply right this second & risk getting another low limit (for her, anyway) card. (trust me, 2k is fine with me! LOL)