topic Re: If I close a card with a balance before the annual fee is due, do I avoid the annual fee? in Credit Cards

If I close a card with a balance before the anual fee is due, do I avoid the annual fee?

Anonymous — Fri, 29 Jul 2011 06:44:28 GMT

Say I have a balance on the card and the annual fee is comming up. I would like to close the card to avoid paying the fee but continue to carry the balance in the short term. Does the card have to be closed with zero balance to avoid the annual fee or, is it sufficient to merely close it with a balance?

It's a Citibank AA Siggie Visa if that matters.

Re: If I close a card with a balance before the anual fee is due, do I avoid the annual fee?

ArisGreek — Fri, 29 Jul 2011 15:43:23 GMT

I am not sure what you are asking. You said that you would like to close the card to avoid the fee but continue to carry the balance in the short-term? To my knowledge, if you close a card, you have to pay the balance right there. You wouldn't be able to close it and then continue paying for a few months...

Did I understand it correctly?

Re: If I close a card with a balance before the anual fee is due, do I avoid the annual fee?

Anonymous — Fri, 29 Jul 2011 15:50:28 GMT

I have a card that I closed and I still make payments.

Re: If I close a card with a balance before the annual fee is due, do I avoid the annual fee?

Anonymous — Fri, 29 Jul 2011 16:02:53 GMT

Yes, you WILL avoid the AF. I have personally closed 4 cards (over the past 6 years) that have had balances. The account showed on CR as "closed by consumer" and continued to report payments and CL. I believe they must also honor your current APR (during repayment process). Have you tried calling CSR to ask if fee may be waved?

Re: If I close a card with a balance before the annual fee is due, do I avoid the annual fee?

Anonymous — Sun, 31 Jul 2011 05:53:32 GMT

Yea, that's exactly what what I want to do. I have also closed a number of accounts still carrying balances to avoid ratejacks and whatnot. In my experience as long as there is a balance still on the closed account, CL still counts in UTIL and for me anyway there has never been any score impact from closing an account with a balance. The impact comes when it is closed and PIF. I've just never done it with a card that has an AF so I wasn't sure if it would cancel that.

I do plan to ask them to waive the fee under threat of cancellation, but I also want to be prepared to follow through with canceling if they wont because I don't use the cards and don't have any reason to pay the fee. I just don't want to loose the CL for UTIL purposes for a few more months. After that it wont mater. So I'll do a 0% balance transfer, close the card after it posts, avoid annual fee, keep CL reporting for now, PIF before the 0% balance transfer expires. = profit.

Re: If I close a card with a balance before the annual fee is due, do I avoid the annual fee?

Anonymous — Sun, 31 Jul 2011 11:46:07 GMT

@Anonymous wrote:
Yea, that's exactly what what I want to do. I have also closed a number of accounts still carrying balances to avoid ratejacks and whatnot. In my experience as long as there is a balance still on the closed account, CL still counts in UTIL and for me anyway there has never been any score impact from closing an account with a balance. The impact comes when it is closed and PIF. I've just never done it with a card that has an AF so I wasn't sure if it would cancel that.

I do plan to ask them to waive the fee under threat of cancellation, but I also want to be prepared to follow through with canceling if they wont because I don't use the cards and don't have any reason to pay the fee. I just don't want to loose the CL for UTIL purposes for a few more months. After that it wont mater. So I'll do a 0% balance transfer, close the card after it posts, avoid annual fee, keep CL reporting for now, PIF before the 0% balance transfer expires. = profit.

You might want to tread carefully, and read your card cardmember agreement. It's one thing to close your card in declining *additional* fees/changes in terms. But, you're asking to waive a legitimate AF that was, presumably, a part of your original agreement. Upon your closure, Citi can still charge the annual fee, and they could demand payment in full... immediately.

Re: If I close a card with a balance before the annual fee is due, do I avoid the annual fee?

Anonymous — Sun, 31 Jul 2011 15:45:14 GMT

I hope someone has some information to clairify what LilMirth just said above. I am confused by it, because I was under the impression that closing an account gives a consumer the right to have the annual fee refunded if it has just been paid, and if it's been less than 60 days since it was paid.

Does this not apply if the account still carries a balance? I admit I've only ever done this while closing paid-off account. But I know for a fact that they must refund the annual fee upon request; I've received checks in the mail for the amount of the annual fee.

I'm considering closing my Juniper Barclay card, upon which I owe about $2,200 out of a $2,500 credit line. The reasons are: 1. They raised my interest rate from 8% to 15% at one point through no wrongdoing of mine, 2. Upon my ONLY mistake ever in managing this account, several months ago I made a mistake doing an online payment and got my payment to them ONE day late, and they refused to refund the late fee to me, even sending me a letter in the mail after their "careful consideration" of my request, and 3. I don't want to pay the newly-instated annual fee of $49 which I was just charged yesterday. I called and asked for it to be refunded as a courtesy and was put through two levels that could not help me and I'm waiting on a call back from the third level next week and I'm pretty sure, judging from history with them, that the answer will be "no."

I'm concerned about the implication that they can demand payment in full of the balance... I've never seen this with any card I have dealt with, so if anyone can clarify that and clarify whether an annual fee can be refunded for a closed account carrying a balance, I would appreciate it.

Re: If I close a card with a balance before the annual fee is due, do I avoid the annual fee?

Anonymous — Sun, 31 Jul 2011 21:14:54 GMT

I'm bumping this to see if anyone knows the answer to this. I could just ask Barclay but I'd rather know what I'm talking about before I go throwing around threats of card closure to them (I seriously don't need the card and I'm considering closing it. )

Re: If I close a card with a balance before the annual fee is due, do I avoid the annual fee?

Anonymous — Mon, 01 Aug 2011 01:18:13 GMT

At the suggestion of LilMirth I actually did dig up the Card Agreement. Under "Annual Membership Fee" it says "If an annual membership fee applies, the Fact Sheet shows it. We will refund this fee if you notify us that you are closing your account within 30 days of the mailing or delivery date on which the fee appears."

This would seem to confirm what Dameon773 said. To dodge the fee I need only notify them that I am closing the account.

As for closing with a balance the Card Agreement says only "If you close your account, you must still repay the balance in accordance with this agreement". My prior expirence with closed accounts with a balance at citi indicates nothing changes as far as repayment rules.

At least in my case, with Citi, it looks to me like my plan is sound.