If you have been reading this blog awhile, you know how important I think it is for you to protect and defend your credit profile — vigorously. But, I read a blog post the other day on another website recently that made me wonder if some people just might take defending their credit scores too vigorously, despite the financial pitfalls
To me, this one is a no-brainer. Sure, closing an “aged” credit file that you’ve had open for several years can cause a slight downturn in your credit score. At the same time, there is no sense in paying a fee every year just to avoid the potentially small negative impact to your credit score. C’mon, people! Don’t hem yourself into a corner with ANY credit card particularly if your credit score is already high (which, in this case, the lady claimed to already have a very high credit score of 750).
Now, if you aren’t paying an annual fee on a card that you have had for many years and you no longer use it, it is still a good idea to hang onto it. That way, it will remain on your credit report and will continue to give you a boost in your score. But if you’re not using the card and you’re being forced to pay an annual fee every year, dump it.
Better yet, call the card issuer and tell them that you’re going to cancel the card unless their willing to waive the annual fee. There’s no guarantee that they will waive the fee. It will depend upon the card issuers policy as well as how valuable you are as a customer to them. If they think you’re worth holding onto, they just might waive that annual fee.
If not, and you’re convinced you won’t need to use the credit available, cancel it. Competition rules the roost in the credit card market. So, if you’re credit score is above 720, take advantage of it. But unless you ask for those benefits, you’ll never know how flexible the card issuer is willing to be with you.
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