@iced wrote:I'm having a bit of a personal dilemma and I would like to solicit some opinions from others who may have had a similar decision to make in their past.
I am interested in upgrading one of my cards for some added benefits, but with those benefits comes an increased annual fee (going from $95 to $450). It's pointless to have both cards so I'm only keeping one open. The existing card is about 3 years old. My choices are:
1. Upgrade my existing card to the new card. I pay the $450 AF for this year but I don't have a new account on my credit report. It would be as if nothing happened from a credit report standpoint.
2. I apply for the new card separately then transfer my CL from the existing card over and close the old card. The $450 AF will be waived for the first year, but then I'm closing a 3 year old account, incurring a HP, and adding a new account to my report.
I have already called and inquired about upgrading while getting the first year AF waived as per the promotion; it's not going to happen. Is saving $450 worth taking a HP, adding a new account, and closing an old one, or am I being paranoid about my credit scores? In the end, I know that only I can make this decision but I would like to hear how others would handle this situation.
It depends on what your priorities are. For me, I've made a conscious decision that at this time in my life, my goal is not to save money but to strengthen my credit.
I guarantee that most folks here would scoff at me, but I would do the upgrade.
However, in doing so, I would ask the rep if they could consider waiving the annual fee for the first year, since you would get such a waiver if you opened a new card. But if they say no, stupid me would go ahead with the upgrade anyway.
@iced wrote:
@p- wrote:Depends on your AAOA, score, and report. If your score is strong and you don't have a mortgage app coming on, the temporary hit from a new account and inquiry are negligible. If you have a thick file, and your AAOA will barely change with the addition of a new card, it doesn't matter much.
But if you are rebuilding, have a thin file, or a very low AAOA, this could be harmful to your score.
For a mortgage, what length of time would you consider to be far enough out to not worry? I have a mortgage currently, but am looking to move and/or take on a second property in around 12 months. I think I may match all three of your last criteria to be at risk, though I don't know where you draw the line for each value. Given some of the signatures I see on these forums, I certainly feel like I have a thin file anyway!
Since you're going to be doing a mortgage, your credit score takes on added importance. The money you save on the mortgage interest might wind up making $450 look like chicken feed.
(Perhaps I should also interject, since people are discussing this, that I have a $450 annual fee card, and for me it's a huge waste of money. However I recognize that some people, who know how to take advantage of its benefits, probably don't regret it one bit.)