I have a credit card right now and no balance at all (clean) - but it has an annual fee (Bank of America). Bank of America upgraded my credit card with no annual fee just few days ago (but I never activated it yet). But then, I just received a better offer from another credit company. My question is: If I close my Bank of America credit card with annual fee, it will be negative on my credit points? I just paid my annual fee 3 months ago and I'm still using my old BOA credit card. So if I close my BOA card, I have to pay for my 3 months of usage instead of 12 months? Thanks!
2006-06-21 12:08:38 · 6 answers · asked by kirsten_natalie1985 1 in Business & Finance ➔ Credit
The previous answers are good.
Your credit does take a dip when you cancel your credit card. It removes part of your "credit history" and increases your debt/credit ratio. These two items make up a large part of your credit score.
I would suggest contacting BOA. You said you got a better offer from another company? Ask BOA to match it, or else you will not do business with them. If they don't remove the annual fee then definately cancel the card and take the momentary hit to your credit report. I think annual fees are a scam anyway.
2006-06-22 04:23:58 · answer #1 · answered by Anonymous · 3⤊ 0⤋
Well, you should look at the terms of service that came with your credit card, to see if it has information about closing it out early. You may be pro-rated a fee because of your usage for 3 months. I don't think closing it early would put negitave points on your credit score as long as you paid on time, and had no other negatiive points against the account. And you can always call and just ask questions.
2006-06-21 19:13:59 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Just ask them to remove the fee from the card. If you have built a good credit record with them, they'll be happy to do this to keep you as a customer.
It costs credit card companies about $150 to secure a new customer. They'll probably lose less than that by waiving the fee.
While you're at it, and while they're saying "yes" to you, ask for a lower APR. I have 3 credit cards and have asked for a lower APR every six months for the past 3 years. They've said yes every time. ;) I've got them all down to single digits!
2006-06-21 21:24:17 · answer #3 · answered by Bostonian In MO 7 · 0⤊ 0⤋
You said that BoA upgraded that card to no annual fee? If so, keep the card and activate it. BoA should refund your fee. If they don't, contact them and request a fee refund.
If BoA did not upgrade that card but issued you a totally different card, you should request that they "upgrade the first card or you will close it"
Actually, closing the card depends on how long you have had it.
Closing a card that you have had for awhile will drop your scores. But, they will rebound after 6 months or more.
2006-06-21 19:19:36 · answer #4 · answered by echo 7 · 1⤊ 0⤋
If you have that card with no annual fee - sockdrawer it. The available balance will help your utilization overall.
Cancelling/Closing credit cards can hurt your score for sure - but even worse, you loose that good tradeline full of payment history, and can negatively affect you getting better cards in the future.
My suggestion - keep it. Especially if it isn't costing you anything to keep it!
2006-06-21 22:01:54 · answer #5 · answered by eloriarl 2 · 0⤊ 0⤋
They may offer you a pro-rated refund, but I can't promise this.
Opening and closing cards can affect your credit rating - if you can, keep your BofA card and still open the other one. Just put the BofA card away somewhere and don't use it. This will show that you have less of your available credit in use, making your credit rating go up.
Good luck to you!
2006-06-21 19:13:25 · answer #6 · answered by Anonymous · 0⤊ 0⤋