Zero Balance and pending annual fee - pay before statement?

[Anonymous]

I'm in the process of rebuilding and would like to keep utilization below 9% so that I can accurately monitor the steps I'm taking. I have an Orchard Bank card with a $320 limit which is currently at zero balance. My $75 annual fee will post on my next statement, which will cause util to jump to 24%. Would it be advisable to pay $70 now and ensure that the statement posts at <9%? I understand the consensus here is the OB, as an HSBC affiliate, posts on the last day of the month, but in my experience with this card that is not the case. 

Also, this is probably not the right place for this question, but I'll ask anyway. Has anyone had any experience negotiating a lower annual fee or no annual fee with OB? I would kill the card if it wasn't my oldest positive CC. I need  to keep it for AAoA, etc, but I hate to pay $75 a year for a crap card/CL.

Thanks in advance for your advice and opinions.

[Anonymous]

Yes you can ask the worse they can do is say NO. 

Yes you can pay the 70 payment to keep the UTIL down which is a good idea IMO

[MarineVietVet]

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@Anonymous wrote:

I'm in the process of rebuilding and would like to keep utilization below 9% so that I can accurately monitor the steps I'm taking. I have an Orchard Bank card with a $320 limit which is currently at zero balance. My $75 annual fee will post on my next statement, which will cause util to jump to 24%. Would it be advisable to pay $70 now and ensure that the statement posts at <9%? I understand the consensus here is the OB, as an HSBC affiliate, posts on the last day of the month, but in my experience with this card that is not the case. 

Also, this is probably not the right place for this question, but I'll ask anyway. Has anyone had any experience negotiating a lower annual fee or no annual fee with OB? I would kill the card if it wasn't my oldest positive CC. I need  to keep it for AAoA, etc, but I hate to pay $75 a year for a crap card/CL.

Thanks in advance for your advice and opinions.

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Hello and welcome to myFICO.

Simply closing this card or any card will not have an impact on your AAoA. At least not right away. Even after being closed it will continue to report for up to 10 years. Some closed accounts will disapperar sooner but 10 years seems to be pretty normal.

Here is a great thread about Closing Credit Cards.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[Anonymous]

Perhaps my understanding of the way accounts are reported is incorrect. If I understand what you're saying, then the date the account was opened is the only factor in calculating AAoA? The time the account was/is open has no effect? If you opened a credit card account in 2005 and closed it in 2006, then it reports as a 5 or 6 year account even though it was closed for nearly that entire time frame? That affects my credit plans immensely, so I would love clarification. Thanks! 

[Anonymous]

Yes if you close the account the account will still report up to 10 years and sometimes longer.

It will only have an impact on your AAoA once it comes off your reports.

[Anonymous]

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@Anonymous wrote:

Perhaps my understanding of the way accounts are reported is incorrect. If I understand what you're saying, then the date the account was opened is the only factor in calculating AAoA? The time the account was/is open has no effect? If you opened a credit card account in 2005 and closed it in 2006, then it reports as a 5 or 6 year account even though it was closed for nearly that entire time frame? That affects my credit plans immensely, so I would love clarification. Thanks! 

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Yep. You've got it right.

[Anonymous]

Great, so now the follow up question...

This is currently the only open CC reporting. What would be the impact of closing it on my scores?

I am currently sitting in the 625-650 realm and would like to wait for my scores to improve a bit so that I can qualify for a better card. I also will need an auto loan sometime in the next six months and a mortgage in about two years, so I would like to tread lightly and not add a ton of new TLs as I'm currently just below six years on my AAoA. There are a lot of baddies dropping off in the next year and I am also going to GW and DV the damage I've done and the damage that is inaccurate, respectively. 

I need to formulate a plan of attack that gives me the opportunity to qualify for a better, higher limit card and an auto loan in the short term and does not adversely affect my score should I want to buy a home in two or three years. Thoughts?

Edited for typo.

[MarineVietVet]

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@Anonymous wrote:

Perhaps my understanding of the way accounts are reported is incorrect. If I understand what you're saying, then the date the account was opened is the only factor in calculating AAoA? The time the account was/is open has no effect? If you opened a credit card account in 2005 and closed it in 2006, then it reports as a 5 or 6 year account even though it was closed for nearly that entire time frame? That affects my credit plans immensely, so I would love clarification. Thanks! 

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Your AAoA is the sum of the ages of every account (except CA collections) on your report, whether open or closed, calculated in months, divided by the number of accounts and then divided by 12. I use the division by 12 to make it easier to convert into years. This is measured from the time each account was opened until present.

You’ll need to figure the age of each account, open or closed, on each report. If all three reports are identical (very unlikely), you're in luck; otherwise, you'll need to run this for each report.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[Anonymous]

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@Anonymous wrote:

Great, so now the follow up question...

This is currently the only open CC reporting. What would be the impact of closing it on my scores?

I am currently sitting in the 625-650 realm and would like to wait for my scores to improve a bit so that I can qualify for a better card. I also will need an auto loan sometime in the next six months and a mortgage in about two years, so I would like to tread lightly and not add a ton of new TLs as I'm currently just below six years on my AAoA. There are a lot of baddies dropping off in the next year and I am also going to GW and DV the damage I've done and the damage that is inaccurate, respectively. 

I need to formulate a plan of attack that gives me the opportunity to qualify for a better, higher limit card and an auto loan in the short term and does not adversely affect my score should I want to buy a home in two or three years. Thoughts?

Edited for typo.

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If it is the only open revolving card you have IMO I would not close it for FICO reasoning. Revolving credit is a big piece of the pie.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

Great, so now the follow up question...

This is currently the only open CC reporting. What would be the impact of closing it on my scores?

I am currently sitting in the 625-650 realm and would like to wait for my scores to improve a bit so that I can qualify for a better card. I also will need an auto loan sometime in the next six months and a mortgage in about two years, so I would like to tread lightly and not add a ton of new TLs as I'm currently just below six years on my AAoA. There are a lot of baddies dropping off in the next year and I am also going to GW and DV the damage I've done and the damage that is inaccurate, respectively. 

I need to formulate a plan of attack that gives me the opportunity to qualify for a better, higher limit card and an auto loan in the short term and does not adversely affect my score should I want to buy a home in two or three years. Thoughts?

Edited for typo.

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If it is the only open revolving card you have IMO I would not close it for FICO reasoning. Revolving credit is a big piece of the pie.

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I agree. Your FICO score is dependent on you making responsible use of your credit. Revolving credit is of particular importance. Just for FICO reasons you should really have more than one CC open.

If you close that card down you can expect a drop in your scores. You can also expect your scores to stagnate a bit. Further, you can expect to have a bit of a hard time getting that car loan at a good rate.

Even though it has an AF you should definitely keep it open and use it every month letting a balance of less than 9% report every month then PIF. Once your scores improve you should app for a couple new cards with no AF then close the account with the AF.

HTH