The Frugal Creditnista

Annual Fee, Monthly Fee – I Closed The Card.

Q: I just got through paying my credit card off and I had them close it. I know I'm not supposed to close any credit accounts when building my credit but they are charging me a monthly fee AND an annual fee; it's just too much to keep it open. What do you suggest?

A: Budget before credit. Any damage you've done by closing the account can quickly be recovered as long as your current accounts are low and in good standing. You probably have the same cards I had when rebuilding credit First Premier and/or Credit One. I despise them both; but I'll be lying if I told you they didn't help me when re-entering the credit world. Bad credit is expensive! Those 2 are the only unsecured credit card providers that would touch me. And please believe I cancelled them both at 9 & 11 months. The key is to create a relationship with them, let the other credit card providers know you can now better manage your credit and open up another reputable (and affordable) card 3-6mths after opening your First Premier/Credit One card. That way when you close your accounts with them it won't be as detrimental. All of the credit card accounts will be around the same age; so just make sure you do not carry a balance from month to month. Pay off in full and keep your debt to credit ratio below 30% (I keep mind below 10% personally).

Hope this helps!

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