Why? The $125 yearly fee, that’s why. I have been an American Express Business Gold customer for a few years now, and while they have been very good to me and I have collected many, many rewards points that I plan on cashing in any day now, I will be closing my account. The annual fee is just not worth what I actually use the card for each month, which is currently only my web hosting bill. It was worth it when I was charging everything each month to the card, as the rewards really added up, but now that I charge everything to my Amtrak Rewards Chase card each month, that $125 a year is looking pretty steep. Don’t you think?
I stopped paying the annual fee on my Citibank American Airlines reward card already, because I gave up flying over 2 years ago. And while I realize that the popular opinion about credit cards is that you shouldn’t close any accounts, I don’t necessarily subscribe wholeheartedly to that concept. For me, a few tiny dings on my credit report is worth the price of ditching 2 credit cards I no longer use. Granted, I have other cards and I don’t carry any debt, so canceling the cards is not going to increase my credit to debt ratio or anything like that. It will amount to a ding on my credit score and nothing more. But the positives far outweigh this little negative, in that…
– I will no longer have annual fees due to credit cards
– I will have less cards to maintain and keep track of
– My credit report will show less open credit, which could actually help the next time I need to borrow money
So if you feel the need or desire to cancel a credit card, it’s not necessarily as terrible as some “experts” will tell you. (In fact, some people think they have come up with a good use for paid-off cards) Your credit score will bounce back pretty quickly from any hit it takes while you are cleaning up your financial life by getting rid of accounts you no longer need or want. I have decided that from this point forward, I don’t think I am willing to pay annual fees on credit cards anymore, as I already have the 1 card I use for every single purchase every month. The rewards or benefits will have to be extremely beneficial to me or my business in order for me to pay for the privilege of using a credit card with a fee!
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