Should I close a low interest credit card with an annual fee?

Question

We've had this Bank of America card for 9 years and it is our oldest card except for a store card that we've had for 11 years(and never use). We have a great credit score and little debt. 

The BOA card has a 6.9 interest rate. They began charging us a $45- annual fee 2 years ago for NO reason. They also removed the benefits the card originally came with (travel protection etc.) 

Should we threaten to close the card if they don't remove the annual fee? Or is the low interest rate worth keeping it, even though we rarely use the card? We don't want to hurt our credit score, but we feel like we shouldn't be paying $45- a year.

M W · Accepted Answer

You can probably call BOA and negotiate to have the annual fee waived. They do that all the time, but it depends on who you talk to.

Also, get a new credit card at a local bank, that has no annual fee.  The interest rate isn't important if you pay the balance every month.  Carrying a balance does affect your credit score, while paying it off every month helps the score.

After you get a new card, cancel the BOA card.  It may lower your score slightly, but it will not be a significant change.

Go with the flow · Answer

Never keep a card with an annual fee.
You have had your other card for 11 years - this established your credit history.
And chances are that you may have had car loans or even a mortgage that established your credit in the past.
If you call to threaten, all they are going to do is suggest another card.
Before you close this card, get a real credit card such as Capital One, Citi, Chase, or even another type of BofA card that does not have an annual fee.  As soon as you get it, then... close your card.  It is always good to have a general credit card in case you travel.

Michelle · Answer

I have always heard that closing a credit card is not a good idea, because it will lower your score. In fact, I have an old card on my credit report. It is not on the other 2. The one credit bureau that shows the old card is the highest score I have, and it is the only difference between all 3 reports. That score is actually a lot higher. So, you may want to keep it.

Tricia · Answer

if you have a 0 balance on the card, i'd get myself a new one at a bank with no annual fee. if you've already paid the annual fee, wait until it is renew time and do not renew unless they remove the annual fee. realize if you pay off your card monthly before the due date, you never pay any interest, so your APR isn't that important in that situation.

? · Answer

get one or two other credit cards (with rewards, and no fees; and pay in full every month = 0% rate) then cancel the BOA with the fee.   You won't hurt your credit score.

Anonymous · Answer

get shot of the card when established users with no debt get a worse deal than new customers move on.

I live in the UK and they pay me to have their card by rewarding all my purchases.  I clear my balance end of each month so pay no fees either. It does save me having cash on me though

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Should I close a low interest credit card with an annual fee?

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