Should I cancel this credit card with a $59 annual fee?

Question

I am working diligently to pay off my debt. I currently have 6 credit cards and one Auto Loan opened in 3/2007

Capital One opened in 5/2004

Chase opened in 4/2005

Capital One opened in 7/2005

Bank of American opened in 7/2005

DMB/ HSBC opened in 7/2006

GAP 4/2008 Opened without permission- have since canceled

The one I need to close is DMB/HSBC. I have two years good history with them, and it is my highest credit limit but it is RIDICULOUS to pay $59 a year to maintain this card with no rewards. Is canceling the card going to hurt my credit score terribly?

Answer 1

There comes a time when FICO scores really don't matter.  Scores change as we go through life.  Scores only matter if you are applying for new credit, auto loan or mortgage.  If you're not applying, then worry about a score should not be on your mind!

Definately lose the $59 card.  It is not helping you better your life, so you don't need it.  Use only cards that benefit you.

Your next oldest card is in 2005.  That's only one year difference.

FICO scores go up as you pay off the debt.

Closing that account will not affect you as much as you think.  You already have 24 months of credit history.

You're paying them off.  This alone is a huge step in raising your score, so keep up the good work.

Answer 2

If you are making the payments on time, then the answer is "NO, it shouldn't hurt your credit score". It will show that are concerned about paying off your bills, in a timely manner!

Answer 3

There are so many cards available without annual fees, I can't understand why anyone would pay for a card.  Definitely close it.  Your score might take a tiny ding but as long as you're making all your payments on time, you're fine.

Answer 4

Yes you should cancel it & then start paying off the rest, starting with the smallest balance first.

Answer 5

I have often wondered who pays these fees.  I have several cards with no fees and more offers in the mail every month.

I don't see where it's going to hurt you and will probably help.  If you're worried about losing the history of good payment, don't.  Your Capital One card gives you a history two years longer than HSBC.  You're probably losing points for having five bank cards.  Two or three is ideal. If you're worried about decreasing the total available, that's easy to fix.  Just call your other cards and ask for a line increase.  Don't do it all at once; do one card every two or three months so there won't be a lot of inquiries all at once.