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Annual Fees - uggggghhhhh

December 28th, 2007 at 07:46 am

So I finally was able to reach the minimum reward level to cash out some miles in one of my credit cards. Made the call and got the check. I was unhappy that Capital One reduce that reward but I knew about that last year. Now I put that card away and don't use it anymore and use the free MyPoints cc exclusely. I really hate having to close this account because I have had it for over 8 years, but the $19 annual fee doesn't outway the reward anymore. I know I am going to take a hit on my credit score, when I lose the long standing credit relationship as well as increase in credit usage when lose the credit line for the account. When I make a major purchase and get my monthly credit charges over $1000, I notice that my credit score drops about 20 points. In anticipation of the January annual fee charge, I called CapOne to have the account close and they said they will send me a letter to waive the charge if I keep it open. I decided to keep it open and deal with it until next year.

Another anticipated increase in annual fee is my overdraft line of credit which I never use. Before it was only $10 a year, but I received a notice that it was going to be increased up to $36. Wow, another annual fee for an unused credit. It is nice to have the overdraft there in case of extreme emergencies, it hasn't happened. If I close this account and eventually close the CapOne cc, then I will lose 70% of my total credit lines. Hate to see what my credit score is going to be after that.

Maybe time to start looking at other available credit options. Great more applications, more accounts, more paperwork, and more account management which I am a super micromanager in such regards.

Posted in Financing | 3 Comments »

3 Responses to “Annual Fees - uggggghhhhh”

  1. disneysteve Says:
    December 28th, 2007 at 02:49 pm 1198853350
    1198853350

    There is no reason to pay an annual fee on a credit card if you aren't getting some good benefit for it. Cancel the card and open one with no fee (but you can keep it this year since they waived the fee). Yes, your score will drop at first, but it will gradually recover.

    And there is no reason to ever pay for overdraft protection. Really, there is no reason to even have overdraft protection, but if you can get it free, that's fine. So I'd cancel that too.

  2. Ima saver Says:
    December 28th, 2007 at 06:14 pm 1198865645
    1198865645

    I have never paid a fee on a card or an overdraft fee either. I would cancel that.

  3. disneysteve Says:
    December 28th, 2007 at 09:18 pm 1198876715
    1198876715

    Just to clarify, I'm not opposed to paying an annual fee on a credit card IF you get something good in return. As I've posted, I pay $65/year on my Marriott Visa. For that, I get a free night certificate each year on the account anniversary good at a category 1-5 hotel. A category 5 hotel goes for up to $300/night. This year, we used our certificate to go to NYC for our anniversary. The room would have been over $200 if we paid for it. This way, it only cost us $65. Add in that we earned probably another $700 in free stays by using the card all year and that $65 fee looks like a pretty good deal.

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