Close B of A w/ $29 Annual Fee?

[Tons_of_Debt]

I'm currently in the process of paying off balances on my CCs (dumb decisions and life circumstances necessitated living off credit for a while) and wondering if it's a good idea to hang onto the B of A Rewards even though it has a $29 annual fee. All other cards with annual fees have been closed or will be closed prior to the next annual fee being charged but they were also significantly higher ($95+), and I don't receive enough benefit to justify the annual fee. I don't anticipate needing credit but also don't want to tank my utilization any worse than it already is and I'm wondering if $29 is a small price to pay for an extra $7.5k in available credit. 

If it matters, I'd be closing this with a balance and paying it off within the next 6 months. 

My current util after closing the Chase British Airways and Delta Amex will be 58%. Closing B of A Rewards too will take me to 72%

Any thoughts? Here's my current mix:

B of A Rewards ($29 Fee) - $7.5k CL; 88% util

B of A Americard (No Fee) - $15k CL; 85% util

Chase Slate (No Fee) - $6.5k CL; 95% util

Chase British Airways ($95)  - $15k CL; $0% util - CLOSING w/in 30 days

US Bank REI  (No Fee) - $8.5k CL; 0% util

Blue Sky Amex (No Fee) - $1k CL; 0% util

Delta Amex ($195 Fee) - $8k CL; 0% util - CLOSING w/in 30 days

Credit Union (No Fee) - $1k CL; 0% util

FWIW, I've paid off $14k since March and am aggressively paying them ALL off for good.

[Relique]

Personally I would hang onto it because I like to have around 10 accounts or so but I understand that's not for everyone. I have more credit than I need myself but I try to keep them open anyway to build history.

Looking at your other cards, you will have 6 accounts left after you close the two accounts with high fees. The BoA will be the only card with a fee and it's pretty small in comparison. If I was in your position I'd keep it open at least until it's paid and util is down. Then maybe replace it with a better card.

I am not expert but I have had banks close some of my cards due to high utilization before. This was years back so things may very well have changed but the risk is still there I think. I'd say staying as low as possible is worth the small price for now.

[CountryLivin]

I would hold onto it until you get the account paid down a bit....You don't want your utilization to go real high....some lenders get funny about that.

[Anonymous]

Why not hold on to it for another year pay it off then ask a Credit Analyst to remove your annual fee?

[Anonymous]

Have you asked BofA in the past to remove the annual fee? I'm assuming the Rewards card was a secured card since it has an annual fee?

BofA was my first secured CC and I was able to remove the annual fee after 1 yr when it became unsecured... This was back in 2011 but I'm sure it's still possible now.

[Anonymous]

NO-NO-NO

I would close ANYTHING as of yet.....

1) When are the AF due on the B.A. and the Delta? If soon ok if not their at 0...leave 'em alone

Same if the BofA

They your util down until you can get it down......

2) Before your score dips because of you narrowing your available CL's ....USE the better ration NOW!

To your favor

a) You may be able to get a loan now that you can't get later....the reason for the loan NOW with the better debt ratio

and better score is b/c you might not be able to later....get NOW while you can.

b) It may be easier to get a installment loan now than later.....even if it's a 2 step process

meaning if you get install loan #1 NOW   (which reduces your CC debt ratio, thus a score bump)

then after keeping cards paid on time,and closing the ones you don't want...

you will THEN be in a better position to get loan #2 again b/c you may not be qualified to get a loan big enouigh initially 

however after 3-9 months and big changes in  your profile (ie the debts on the cards are gone, remember that debt is on a maturing install

loan) not a revolving CC and less jeopardy b/c some of those cards have been cut from your line up...

So again an app for a 2nd install loan would more likely be not only approved but with better terms than the 1st...

This keeps the % amount paid down b/c the debt is paid via fixed rate installments where you know your payment amount and the max % you'll pay b/c

it isn't revolving ....that's IMO the best 2-3 step method to kill the debt but use your profile to help you he best you can at each step.

Now if your file is strong enough to get a big enough loan upfront that's fine but normally with that kind of CC debt it needs to be stepped IME

You need to have your ENTIRE plan, in front of you before you move the chess pieces...the LONG PLAY intention is to payoff the debt and enjoy your life but too many times ppl chop off noses prior to planning the facelift don't let $29 cloud thereal issue which is 10's of thousands ofdollars and the cheapest way to pay it off.

Even a little 5k loan gets you started and removes 5k from your CC debt ratios.......keeping your scores up allow you to 'save' yourself in a pinch, allowing them to fall gives you no out AND a  mountain of debt.

Keeping your credit score up..allows you the best option to pay the debt down at the cheapest rate you can

Good Luck...you'll be fine...one bite at a time, either way you go it'll be sometime before you pay off the debt, so pay the least amount EXTRA as you can

[Kevin86475391]

I agree that the time probably isn't right to close the BofA card, especially since the AF is only $29. Personally, I would always avoid closing a card with a balance.

As others have said, have you tried asking BofA to permanently remove the AF or at least to waive it for this year? If you don't need the account for its traditional rewards, have you thought about asking to PC it into a different (no AF) account? I know Bank of America has the Better Balance Rewards card that's aimed at people who carry a balance. I don't have the card and haven't researched it very much, so I have no idea if you'd qualify for it or if they're willing to PC to it in general, but just a thought.

[Tons_of_Debt]

Thanks all. My gut was telling me to keep it open. Seems too small of a price to pay to NOT. 

[Anonymous]

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@Anonymous wrote:
Have you asked BofA in the past to remove the annual fee? I'm assuming the Rewards card was a secured card since it has an annual fee?

BofA was my first secured CC and I was able to remove the annual fee after 1 yr when it became unsecured... This was back in 2011 but I'm sure it's still possible now.

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I agree.  Call to see if they will remove the annual fee or see if you can upgrade to a different card.  I had a BoA card secured card - signed up in 2013 and it had an annual fee of $29.  It was one of my first cards from my rebuilding process. It became unsecured in 2014.  I called in April 2016 and requested to have the card upgraded.  I was originally told no but was able to get a CLI from $400 to $5k.

I contacted BoA a few days later (thanks to the advice of my fellow MyFico'ers) and asked again to have the card upgraded.  The request was approved and I received the new card approx a week ago. 

[Anonymous]

Have you called BoA to ask if they will waive the AF (permanently or temporary)? If you haven't, please call them. Best of luck!