Cancelling your credit card is a good idea. Why take a $100 hit just to have a good score? You’ll get your score back up in about a year or so with a new card so why not close it? Closing a credit card only impacts it for a little bit (3 months) so don’t worry about it!

I would cancel the card as well. IT shouldn’t be that hard to build up your credit again before your car and/or house purchase. Paying on time and other things carry far more weight than length of credit history.

Call the card company and tell them that you are going to cancel unless that eliminate the fee. Worked for me and I got to keep the card active (with no annual fee) while getting a new and better rewards card.

I guess it would depend on how your car situation. If you can hold out for 2 years, then I would cancel. If the car may die at any minute and you’d get a new one then, the choice is a bit more difficult.

If you have only talked to the phone operators, ask to speak to a manager. That might help to get it waived for one year.

I would cancel. Your four years of paying will still appear on your credit record, so the only change is that your oldest credit card isn’t very old. If you’ve had the same job or address for a long time, those indicators of stability could help reduce this indicator of instability.

An added bonus is that once you have made up your mind to cancel, they may change their minds about charging you the fee after all. Hmm, what if they offered to reduce your fee? You might want to think how large a fee would be acceptable. Maybe $20.

However, none of the above is based on any real knowledge of how this would affect your credit rating, and how that change in rating would affect your options for loans.

Do you know how good your credit rating currently is? Maybe if it’s at a boundary line, you’d better pay the $100 for a couple more years.

Have you ever gotten a copy of your credit report (you can get one free report per year from each of the three agencies by going to annualcreditreport.com)? If you look at your credit report, you’ll be able to see that closing your account will not cause you to lose your credit history–every card you’ve ever had will be on that report, whether the account is open or closed.

They say that you shouldn’t cancel your old cards because it helps your credit score, but $100 is just a ridiculous annual fee. I personally don’t believe in making decisions about opening or closing credit card accounts based on what that will do to my credit score (that could drive a person nuts!). Instead, I focus on making my payments in full and on time every month. If do you this, you shouldn’t have any problems with your credit score.

By the way, the free credit report doesn’t include your score (that costs extra) but I don’t think it’s necessary to know your score unless, perhaps, you’re about to make a major purchase like a house.

I would recommend cancelling the card with the annual fee.

You have a good credit history with the large annual fee credit card.

Cancel it and stick with the card with no annual fee and keep on making your payments on the card.

Your credit score will be fine as long as you keep up with paying your bills on time.

I would cancel the credit card as I do not see the reason why you should pay a annual fee. A new credit rating can be established easily.

I do most of my transactions cash as I do not like the idea knowing that every time I use my credit card I am being ‘watched’. Where I am. What I buy. Where I buy. What I am doing. Unfortunately, that doesn’t work with Internet transactions.

Also, I do agree, if you call the credit card company and tell them you withdraw if you are charged an annual fee, they very often eliminate the fee.

Your credit history is made up of many things, not just this card. I see no reason to maintain it at a cost of $100 a year. If you are hoping to buy a car and a house within a few years, you should actively be saving for at least a 20% downpayment on the house and if possible a cash purchase on the car. Having a well-stocked bank account and a history of 4 or more years of on time bill payments will go much further than one credit card can do. And if you don’t have a decent downpayment saved up for that house and car, you don’t have the financial resources to handle the purchases anyhow.

The length of time your accounts have been open account for about 15% of your FICO score, and to establish a higher score you should have several lines of credit. The fact that until recently you only had this one card is very important. At this point in your credit I would try and keep all my positive accounts open. See if the CC company will call your bluff and try calling up and cancelling (pretend to want to cancel that is). Be sure to tell them its because of the fee, and you just recieved new credit with no fee. They may just change their mind.

Try to think of the big picture here. Just a few points difference in your FICO could mean a lower or higher interest rate. Its not so much what the fee is costing, but what possibly lowering your FICO score will cost you.

Good luck and congrats on being so responsible with your money!

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Just to comment to the previous e-mailer: credit card companies absolutely do make money even when cardholders pay no interest or fees. They make it by charging a fee to merchants for the privlege of being able to accept your plastic.

Cancel….your credit history will still show your payment history which should reveal a “positive”…..it’s not the card that will cause your history to be displayed…it’s your financial dedication to meeting your obligations