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Closing CC accounts doesn't have a negative effect in and of itself. Closed CC accounts continue to report for 10 years. However, when the 10 years is up and they do eventually drop off of your CRs, your AAoA will be effected.
I researched your website to find an answer, and came close with a couple of your posted comments.
I don't have debt, and probably won't be buy a new car (always cheap used for me) or a home for a few years from now.
I only have 2 active cards, a 10-year old Visa and 20-year old MasterCard credit cards, and 3 old store credit cards that haven't been used in 10 years.
My Visa has been my primary credit card, and it's from a credit union -- and they are slapping $3/mo service charges on it (unless I have a $500 bal or savings in their credit union).
I have a nice FICO score
I'd like to close the account, and know it can lower the FICO score.
My questions are
‘How long' will the affect last?
‘How bad’ will it affect my FICO score?
are you positive they aren't imposing a fee on your cu checking or share acct. and not your cc?
perhaps you should clarify with them?
i was under the impression that balance requirements, if any, typically affect deposit accts. not cc's...
I agree that you need to speak to CS and make sure that the fee is not being charged to your deposit account (share or checking). Otherwise, you will end up closing the CC account and still be getting hit with a fee.
I'm not sure that it would even be legal to charge a fee on a CC that was not related to interest on balance, or as a late fee. A statement fee......hmmmm, I highly doubt that is where the fee is actually coming from.
If your share account or checking is not funded and has a minimum balance requirement (like $5), it is possible that you are being charged a monthly fee on your deposit account, but since it does not have the funds, your CC is acting as an overdraft protection and the money is being pulled from it....which means your deposit account fees are being drafted to your CC. If this is the case, then closing the CC will mean that your deposit account will end up overdrafting, causing additional fees for NSF and eventually being closed and possibly reported to CheckSystems or other similar reporting agency.
Thanks for the reply.
Yes, it is a fee on the 'savings' account in this cu. You had to have a savings or checking account in order to have this Visa credit card. At the time, the minimum was just to have $5 in the account at all times.
Around 3 years ago, they started putting a $3/mo fee on it. I told the manager at the time that I could go back to using my other account, for free, and not bother with yours. That manager was nice, and tried to remove that charge automatically. They ended up having to do it manually until further notice; though,she just left the company.
This other manager said that there has always been monthly fees on their accounts, though, I never asked if this $500 min was always the case to waive it. I was only informed of keeping $5 in it. That's all.
As far as I know, they are not linked 'that way'. Meaning, there has been no overdraft or fees applied to the credit card at all, at least I haven't seen any. This $3/mo fee has only been showing up on my 'savings' account statement only.
Because of their rules, I'd like to close both the 'savings' and 'credit card' (basically everything at the credit union). What I would rather have is just keep the credit card, and ditch the useless savings account (which has nothing in it).
The post above said that the only time the closing of the credit card will affect me is after the 10 year period from the time I close it. So it sounds like my credit will ding me in 2019.
If you close a credit card, your overall utilization will be negatively impacted. If the card has a high limit and you're not using much of it, your utilization % is low and your fico will be higher. When the card is closed, your limit will no longer be calculated so your overall utilization % will not be as good and your score most likely would go down (depending on many other factors as well)....
If you have other cards with little to no balance reporting, you should still be okay, but for those who carry balances, cancelling one card with a high limit can certainly ding your score (sometime drastically)...
And, be very careful of cancelling a card while there's an outstanding balance. That will put you over 100% util...
Doesn't seem like you'd need to or should cancel the card, but good luck to you!!
Thanks to all above. That makes more sense. It gives me some more info to see what this cu can do.