I have recently paid off all my credit cards. However, there is one that is still accruing a $10 monthly fee. The interest rate on the card is 33%. Should I close the card out and if so will it hurt my credit score?
Sherri from Charlotte, NC
Definitely close it. It sounds like you have other, better credit cards and paying off an account should not damage your credit rating at all. 33% is a ridiculous interest rate and an additional monthly fee for the right of having the card is just terrible.
Have them send you a letter stating that the account is closed and that is was paid in full. I believe that having less open accounts will actually help your credit rating in general. I would personally close any account that is over 15% APR and any that has any sort of annual fee.
This is also a good time of the year to review your credit report. Be sure to check all three major companies as I once found a small debt listed on one that I had forgotten about. It didn't show up on the other ones and I wound up having it ding my credit for a couple of year for a debt of around $300.00.
Do you still have a balance on this card? I have never heard of a card charging a monthly fee other than interest. Some cards have an annual fee. Either way, you should pay it off or transfer the balance to a better card and then close the account. Never, ever, ever close an account before it's paid off. If a card does not charge an annual fee it is not necessary to close the account. Just don't use it anymore. Accounts that have been open for a long time improve your credit score So, if you go closing all your older accounts you can actlually lower your credit score. However, open accounts with 0 balances do not harm your score at all.
Go to annualcreditreport.com, the only free credit report (don't go to freecreditreport.com). Your report will include a section of recommended actions you can take, to improve your score. I don't feel any need to know my score, just to do what they recommend, and the last time I refi'd my house they said my score is awesome. And I was once 55K in debt, and I paid it all off, in a seven-year fight, and you bet I celebrated that it was done. Good luck, keep patiently doing the right things, and God blesses more than you could imagine.
I used to work for one of the three credit bureaus and I would suggest closing this account. As long as you have some accounts in good standing without extremely high credit limits, your score should be fine. Your score is based on number of accounts open,how long you've had them, how much available credit you have on those accounts, your payment history and the number of inquiries into your account when you apply for new credit. CHecking your OWN credit report does NOT affect your score in any way. If your credit has improved, you should have no need to carry a card with any type of yearly fee. Annual credit report.com has great info. The report is free but your score is not. You generally have to pay around $9.00 for it. Keep in mind that the score you get may not be the same score a company receives on you depending on what factorz that company wants included in their scoring. It varies. Good luck.
The only reason to have a good credit score is to be able to borrow money. Are you planning to borrow money? Probably not--you just got out of debt, right? So even if canceling the card does affect your credit score a little bit, it doesn't matter. It's pointless to pay $10 per month just to keep up your credit score when you're not planning to borrow money anyway.
Close it, but credit score affects everything! Your car insurance rate, your monthly mortgage payment, your ability to get certain jobs, etc. The list goes on. Congrats on getting out of debt.
33% and $10 per month is exhorbiant. I have never heard of such a rip-off rate and would not deal with that company again. Shop around. Plenty of banks offer one-off fees, or if you are lucky, no annual fee. All the ones I know of are much less than $120 per year. And the interest rates are nowhere near 33%. I'd write to the company ASAP, and possibly even query the charges. Check your contract as you may be entitled to a complete refund if these terms were not listed.
Some cards will charge you a fee for NOT using the card. This makes no sense to me, and I quickly cancelled the card from the company that was charging me this fee. You do not need a multitude of cards to have a good credit rating. It is more important to have one that you pay off in full every month. Get one with no annual fee, and if possible, a low interest rate. Of course, if you pay off the credit card every month, you don't really care about the fee.
yes you should go to your local bank and apply for their credit card the rates are nearly 50 percent cheaper...you could be putting that ten dollar fee into your gas tank to drive to work instead of giving it to someone else in fees.
If your car insurance payments and monthly mortgage payments are already set, closing one credit card account shouldn't affect them. It only affects them if you apply for a NEW mortgage or NEW insurance and I really doubt closing one account would have a large effect anyway.
YES YES YES close the account. And make SURE you shred the card while you're at it. That rate is completely obsurd! Also, having just 2 or 3 accounts in good standing looks better to creditors than 10 accounts in good standing. Be strong, girl!
YES, definitely close the card account and put in writing to the company that you are doing so due to the high rate of interest and what rate of interest you feel will be acceptable. Companies need to know when they are over-charging, 33% is outrageous! My credit card company called me recently and told my they wanted me to use the card more (I had 18% interest rate) and what would it take, I said well you can lower my interest rate, she asked "how about 14%?" I replyed that will help. In 30 days I had the new rate paperwork. I do use my card more, but I still pay it off on time as I get my bill. Your credit follows you, you do not follow the credit card company. Do not let a company take advantage of you, be strong. Persistence pays off, so pay yourself FIRST, if a company does not treat you proper, change companies.
No, ask for a lower rate. Closing an account negatively affects your credit score. You don't have to write a letter, just telephone and negotiate for a lower rate.
I tried working with my credit card to help me get back on track with my late payment. I technically was not late but they somehow decided to make my account late. Long story short. So I called them to help me. I did mention to them that I was willing to work with them to pay the card back but they were unwilling to remove fees that were placed on card. They gave me two options. Hardship close out the account all my accounts which are with my bank (Bank of America) worse credit cards ever. Or pay them 400 dollars by 10 days. There is no way I can pay that. Should I close out the accounts. They said they could put me on a payment plan , lower my APR. But they would close out all my credit card accounts within my bank and prob won't let me ever get an account with them. My question is what should I do? I reallly want to get back on track here. Any advice?
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