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  1. #1
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    Credit card changes on the way

    I'm not posting this to get into a political discussion regarding the benefit/damage of the legislation - but rather to point out some of the changes forthcoming on many credit card accounts. If you're an avid CC user like me, beware.

    The inactivity fee idea caught me by surprise. So did the minimum use fee. I expected the rewards reductions, APR changes and annual fees.

    Anyway, don't get caught by surprise next month.

    Six new credit card booby traps on the way - The Red Tape Chronicles - msnbc.com



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    Re: Credit card changes on the way

    I hope BofA starts charging me a yearly fee for my CC....It will be so much easier to cancel. I think the only reason I keep it is because it says "member since 1995" which for some reason makes me feel good.



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    Re: Credit card changes on the way

    Quote Originally Posted by dmclone View Post
    I hope BofA starts charging me a yearly fee for my CC....It will be so much easier to cancel. I think the only reason I keep it is because it says "member since 1995" which for some reason makes me feel good.
    After I saw this, I called B of A and checked mine (Bass Pro Shops) and they told me that mine didn't have an annual fee or any other use fees being added.

    I hold a number of cards that I don't regularly use. Mostly store cards for financing offers (Lowes, Home Depot, Sears, Dell). Supposedly closing accounts can have an adverse affect on your credit score. I don't understand why that would be. I gather it has something to do with lowering your ratio of available credit.

    Anyway, that's why I haven't closed a number of them. But I'm not paying fees on these cards, so I'll have to take the hit if need be. Not looking forward to checking into all of them.....



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    Re: Credit card changes on the way

    I move balances all of the time. I know its not typically good for your score, but mine doesnt seem to be effected. I refuse to stay with a company who wont keep my rates lower when I pay on time and have good credit. The only card Ive stuck with consistently is BP's visa. I like the rewards and such and the rate has been decent. I screw over Discover every couple of years though when they send me 0 interest on balance transfers. I hate when they nickle and dime you.



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    Re: Credit card changes on the way

    I could care less about the rates they charge. They can charge me 99% as long as I pay them off each month. Next they'll probably charge you to run a $0 balance.



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    Re: Credit card changes on the way

    Quote Originally Posted by dmclone View Post
    I could care less about the rates they charge. They can charge me 99% as long as I pay them off each month. Next they'll probably charge you to run a $0 balance.
    hence the annual fee. or the minimum usage fee.


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    Re: Credit card changes on the way

    So, if I have cards that I don't use (or don't use much) and they decide to add an annual fee (or "inactivity fee"), do I close them and take the credit hit or pay the fee(s)?



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    Re: Credit card changes on the way

    Quote Originally Posted by 1100011CS View Post
    So, if I have cards that I don't use (or don't use much) and they decide to add an annual fee (or "inactivity fee"), do I close them and take the credit hit or pay the fee(s)?
    close them out. why pay money for something you don't use. if you have strong credit, you have strong credit, cancelling a card won't hurt you at all. now if you are trying to rebuild, that is another story.


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  9. #9
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    Re: Credit card changes on the way

    Quote Originally Posted by dinger View Post
    hence the annual fee. or the minimum usage fee.
    I think he's saying a fee for not carrying a balance (ie, no interest charges).

    I put 30K or so on my cards every year. Don't pay a penny in interest charges as I pay it off every month.

    So they can't nail me for a min use fee (or at least I hope not). But they could institute some sort of other fee - min interest or something. Not an annual fee necessarily - cause you might not pay it (if you pay interest).

    Problem is that it's going to be easy to bury these things.



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    Re: Credit card changes on the way

    I know where you're coming from. We cycle everything possible through our card and pay off in full every month. We have in the past closed cards that have tried to impose an annual fee or reduced their rewards program. They make their 3% off of us and to me that's fair for the very low risk lending.

    Minimum interest charge (even for zero balance)? That's insanity.



  11. #11
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    Re: Credit card changes on the way

    Quote Originally Posted by 1100011CS View Post
    So, if I have cards that I don't use (or don't use much) and they decide to add an annual fee (or "inactivity fee"), do I close them and take the credit hit or pay the fee(s)?
    Quote Originally Posted by CyPride View Post
    close them out. why pay money for something you don't use. if you have strong credit, you have strong credit, cancelling a card won't hurt you at all. now if you are trying to rebuild, that is another story.
    Seems like a reputable enough site.

    Closing Credit Cards Affects Your Credit Score - Closed Credit Card Impact on FICO Score

    In summary...

    In short, your credit score could be affected by closing a credit card if
    • The card still has a balance.
    • It still has available credit when your other cards don't.
    • It was the first card you ever opened (though this won't matter for about 10 years)
    • You don't have any other credit cards



  12. #12
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    Re: Credit card changes on the way

    Quote Originally Posted by 1100011CS View Post
    So, if I have cards that I don't use (or don't use much) and they decide to add an annual fee (or "inactivity fee"), do I close them and take the credit hit or pay the fee(s)?
    Some important things to consider.

    Try to close the ones where you've been a customer for the shortest time. The longer you've had an account the more weight it carries.

    If you don't carry a balance on any of these cards then it shouldn't effect your score. They care more about what percent of your maxiumum balance that you're using. So it's actually better for a person to only have $1000 balance on a $10K limit card than $150 on a $1K limit card.

    Here is a qoute

    After speaking with the consumer affairs manager from Fair Isaac, Bankrate concluded:
    If your credit card balance is zero, go ahead and close as many unused accounts as you want. As long as your credit cards are balance-free, it won’t hurt your credit score a bit. So call those card issuers and cut away.



  13. #13
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    Re: Credit card changes on the way

    Quote Originally Posted by dmclone View Post
    I hope BofA starts charging me a yearly fee for my CC....It will be so much easier to cancel.
    My feelings exactly. Any card that slaps on a yearly fee gets canceled.


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