Low Limit HSBC Credit Card, Cancel or Not?

[Anonymous]

I have a HSBC credit card with a $300 limit and a balance of $0. I opened the card 2/2007 and have one 30 day late payment in 2010 which I have written a GW letter for but am waiting to hear back. Also, this card has a $69 yearly fee which I think is ridiculously high. 

I have 2 other credit cards with a $4000 limit/ opened 2001/ balance $400 and a $1400 limit/ opened 2005/ balance $0, both with no late payments in the past 4 years and are marked as paying as agreed but are also flagged from late payments from before my good 4 years. 

I am trying to do all that I can to increase my score for a possible mortgage next year. From what I've read, you shouldn't cancel credit cards as it lowers your over all credit allowance but you also shouldn't have low limit credit. On my report it states as a negative that I have low limit credit which could possibly be bringing down my score. I have 3 collections accounts on my score currently open as I am disputing 2 and have paid the other in full this month and written a GW letter. 

My question is: Should I cancel this card after I hear back from the GW letter or should I keep it and just continue to pay the high yearly fee?

[-Cain-]

$69 is a high AF for a $300 card, have you tried asking for a PC to the Platinum Rewards Household MC? You may be able to get that with no AF.

[snowangel]

I also have the same exact situation.  My HSBC was opened in 2007 and I was given a $300 credit limit.  In 2008,   I was was 2 months late because I was charged the AF of $69 and wasn't aware of it.  I hadn't been using the card and had a $0 balance prior to that.  Since then (almost 3 years) I have kept a $0 balance and have only received 1 CLI of $20!! 

At the time I opened this account, it seemed like my only option because of low credit scores.  I've been slowly building up my credit scores - I'm in the mid 600's now for TU and EQ - and was just approved for a Cap1 card with a $500 limit with a $39 AF.  I'm wondering if I should close the HSBC acct.

Any advice?

[Wolf3]

IMO, HSBC wants to keep their customers to help  sell their credit card business.  I think you have  a good chance of getting a lower or no AF if you call to cancel before the next AF is charged.   

I would cancel if they don't lower AF, as $69 is very expensive AF.   Either way will not impact your credit since it will remain on your report for 10 years as a positive account.   Assuming you keep Utilization the same.

[daylove]

---

@Wolf3 wrote:

IMO, HSBC wants to keep their customers to help  sell their credit card business.  I think you have  a good chance of getting a lower or no AF if you call to cancel before the next AF is charged.   

I would cancel if they don't lower AF, as $69 is very expensive AF.   Either way will not impact your credit since it will remain on your report for 10 years as a positive account.   Assuming you keep Utilization the same.

---

+1 call them, they rather lower the fee than close your account.