You may have already known that cancel a credit card may influence your credit score. However, there are sometimes you just have to do it. For example, the annual fee ($125) is going to be charged on American Express Business Rewards Card, and you don’t want to pay that money. Sometimes you find that that card is no longer profitable for you and you want to get another wonderful credit card. You may say this will affect my credit score and I don’t want to try. Ok. The most important things for your credit score is the credit utilization and credit history. If you are not cancelling your first credit card, it won’t hurt you. If you have huge credit limit, it will also be Ok for you credit score. Of course, you have to make a choice by yourself. Here are some tips on how to make your cancelling process profitable.
1). Combine with other existing credit cards.
You can choose to combine the credit card with another credit card from the sane issuer. You can call them up and ask for “moving” the credit limit from this card to another credit card. This approach is very useful for most credit card companies. However, sometimes some ristrcitions may be applied. Sometimes the CSR might give you wrong answers. So if one CSR tells you that he/she can’t do that, just hang up and go for another call. I think it works for most issuers.
2). Switch to another credit card.
If you want to avoid the annual fee of a certain credit card, you can choose to switch this card to another no annual fee card or a card with lower annual fee. It’s especially useful for Citi PP-Elite and Citi PP card. You can get more sign-up bonus from the Elite level card, and waive the annual fee for switching to non-Elite card. You can earn simliar miles for both cards. This approach is also useful for Citi AA series cards.
3). Get bonus for staying.
I have the experience. When I called Chase to close Chase Freedom card, they gave me $10 to stay with that card and transfer credit limit from another card. Usually, when you called to cancel your credit card, you will be transferred to a person who is specially trained to handle this problem. They may give you some incentives to stay with that card. But remeber, don’t get angery. Stay calm and talk to the person kindly. The goal of that person is trying to get you stay with them. You can make profits for them! I hope you can get bonus for staying with them.
When you are ready to cancel a credit card, make sure you have a plan to deal with the credit card company. If you have any experience with this , please feel free to make a comment.
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October 5th, 2007 at 10:54 pm
this article looks familiar…
October 5th, 2007 at 11:04 pm
Hehe, yes.I have writen several posts about credit card. I will publish them in the following days.It ’s similar with my previous one.
October 6th, 2007 at 7:09 am
chase required me to maintain $500 minimum cl if i wanna move cl from this card
October 6th, 2007 at 8:04 am
Well, sometimes it will happen. But I can move credit limit between my 3 chase cards without an y problem. You can call them again. Or maybe you can leave $500 CL and close this card later.
October 8th, 2007 at 3:19 pm
Cardoffer:
Two questions:
1. Can I switch my FIRST credit card to another one? Will it hurt my credit score and shorten my credit history? BTW, when I switch one card to another, the history of the new card will start from the date the old card was opened or the switch date?
2. If I switch one card to another card that can have a signup bonus, will I get that bonus?
Thanks:)
October 8th, 2007 at 4:21 pm
Hi Ming,
It’s really hard to say what will happen. What I pointed out in my post is just a general rule.
1). It’s generally believed that the first card should be kept all the time. That’s what I am going to do. Usually they will close your old account and open a new acount for you. In this way, it will hurt your credit score.
2). This question is really YMMV. Sometimes you can get bonus. When you call in to do this, please confirm with the CSR. My friends tell me that AMEX will give you sign-up bonus. But I’m not sure whether or not other banks will do this.My suggestion is call them up and ask this question to the CSR. Of course you should have good reason to him/her. Be kind all the time.
October 8th, 2007 at 9:20 pm
I want to make it clear for one thing. If you switch your oldest card to a new card, yuor old account will be closed. Because they will give you a new account number. Of course, if you consolidate your new cards to old cards, there should be no problem.
October 14th, 2007 at 2:31 pm
One more question about the first card. Should I use it occasionally or let it just sleep in my drawer? I am worried that if I don’t use it at all, the credit issuer will close it automatically.
October 14th, 2007 at 2:38 pm
Hi, Ming. I think you can use it for about once every two or three months. I would keep my first card all the time. If you cancel your first card, your credit score will drop. Today, a new card appeared in my credit report and my credit score dropped 7 points. It’s true that if you cancel your first card or add a new card wither way will shorten your credit history and will lower your credit score. However, if you are not going to buy a car or house, you can cancel it.(credit score means nothing to you right now.)