• Credit Card Conundrum

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    photo: Andres Rueda

    Over the past few months I’ve chosen to close a few credit card accounts. I think that in each case, the card carriers were going to start charging an annual fee unless we started using the card. The most recent example was my Citibank card, as they wanted us to spend at least $2400 per year to have them waive a $60 fee.

    The problem with all of the recent cancellations are that 1) the cards were among the oldest that I had and 2) they had pretty high credit limits. Cancelling those cards has reduced the average age of my credit history and has decreased my overall credit limit. I do still have a relatively high overall credit limit around $35,000 and my oldest card was opened in 2000, with others opened from 2005 to 2007. But still, it sucks that I had to cancel those cards.

    Of the remaining credit cards that I have, I use two of them regularly. Both are rewards cards, but one of them has a $45 yearly fee. Oh, and Her also has that card as well. So yes, we’re paying the $45 annual fee twice.

    So naturally, I’m contemplating closing that card as well so that we don’t have to pay the annual fee more times than we need to. The problem is that card is also the second oldest card that I have and has the second highest credit limit; closing the card would effectively halve my overall credit limit. I don’t want to take another ding on my credit score. I’ve had this card for almost 5 years, so we’ve paid $180 in fees so far – soon to be $225. We have definitely received much more in rewards (5-star hotels in Europe are a very nice perk), and so far have accumulated enough points to go on more awesome vacations.

    Do you think it’s worth it for me to still have this card? What alternatives could you think of instead?



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