Keep or Cancel Credit Cards December Edition

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Welcome to the keep or cancel credit cards December edition.   Some of my most frequents questions I get are “Should I keep or cancel my credit card?” and “What do I do about the annual fee?”  I’ll be explaining on some strategies on whether or not to keep or cancel certain credit cards. My annual fee hit on 3 of my credit cards this month and surprisingly they are all Chase credit cards, which I currently hold 9 of their credit cards.   Here are the credit cards up for renewal:

1. Chase Ink Plus Business Credit Card

I previously called for a retention bonus for Chase Ink Bold and received 5,000 Ultimate Rewards points which is almost worth the $95 to me.  The Chase Ink Plus is worth keeping for me if they offer me a decent retention bonus.  This time, I’m shooting for at least 10,000 Ultimate Rewards points because there is not much incentive to carry two Chase Ink credit cards after the sign up bonus.  Keep if good retention bonus, cancel if none.

2. Chase Marriott Rewards Credit Card

I signed up for the credit card two years ago for the 70K Marriott points and was able to stay in a couple nice Marriott hotels such as the Residence Inn Munich and Residence Inn Gaslamp.  However, Marriott raised most of my favorite properties now to Category 6 and the annual Marriott certificate is for a Category 5 hotels only. There aren’t any Category 5 hotels that I would like to stay at so I probably will cancel this card. I would say that I got pretty good value out of the points.  I am actually going to hold onto the credit card until my free night posts and then cancel the credit card.  I believe Chase does not claw back the annual certificate.  I’m not too worried because Chase refunds your annual fee up to 60 days after it hits.  Cancel.

3. Chase United MileagePlus Explorer Credit Card

I signed up for this card when the offer was 55,000 miles last year.  After meeting the minimum spend, I put the card aside and decided not to go for the 10,000 United miles after $25,000 spend.  The sign up bonus was great, but I don’t see the point in keeping the credit card.  The credit card does offer 2 United lounge passes (which I’ve found only mildly impressive) and a free checked in bag.  Since I travel mostly with one backpack, I don’t need that benefit.  Cancel.

Strategies for closing credit cards

Two things are affected when you close credit cards.  Your average age of credit lowers and your amounts owed (credit card utilization) drops slightly because you are losing credit.  The average age of credit only makes up 15% of your credit score and the amounts owed is equivalent to 30% of your score.

FICO Score Breakdown

FICO Score Breakdown

Before closing a card, I will ask for a retention bonus by calling the number on the back of the card to see if I can get the annual fee waived or bonus points that compensate for the fee to keep my length of credit history up.  To protect your amounts owed percentage, always ask to consolidate your credit by transferring the existing credit line to another credit card. For example, if I close my Chase United Mileageplus, I will ask to transfer the credit line to my Chase Freedom credit card.  Therefore, my only damage is the 15% length of credit history.  If I can minimize the damage to my score, I can continue to churn credit cards.  My credit score is according to Barclaycard Arrival’s FICO score is 791, despite holding 20 active credit cards.  Note that even though my credit score is high, it can still be tough to be approved for credit cards due to “too many recent credit inquiries.”

My Fico Score as of 12/9/13!

My Fico Score as of 12/9/13!

Hope you can learn something from this article, I will post the results of my keep or cancel credit cards December edition later on this week.  Stay tuned.

9 comments for “Keep or Cancel Credit Cards December Edition

  1. Richard
    December 17, 2013 at 2:03 pm

    Is your FICO score automatically updating on the Barclays site? I first checked it on October 18, and it still shows that same date and score.

    • December 17, 2013 at 4:12 pm

      It shows every 2-3 months it seems like.
      No way to update it on our end.

  2. Jay
    December 17, 2013 at 2:20 pm

    What is the wait time after canceling the Ink Plus before reapplying to get the signup bonus? I’ve considered downgrading to the Classic which has the same category spend, however, it’s probably best to attempt another sign-up bonus later.

    • December 17, 2013 at 4:36 pm

      I would just cancel. Canceling a business card doesn’t hurt your score.l theoretically. My intern Simon waited about 6 months from his last business app and got the card approval and bonus again. There’s no guarantees though. I’m pretty maxed out with chase, 7 personal and 2 business so it would be tougher for me. I recently got denied chase southwest business for too many recent inquiries. If you haven’t applied for too many cards lately (I’m about 10 this year) then your chances are better.

  3. toni
    December 17, 2013 at 2:32 pm

    Hey Rom,

    Thanks for the post! I have a couple of questions about this very topic I’ve been meaning to ask but haven’t gotten around to. First, does it matter if you call to ask for a retention bonus before or after the annual fee hits? Like, I’ve got a chase united explorer card getting ready to hit a year and get the annual fee. Should I call now, or is there any hurry? Will they not reimburse the annual fee?

    Question two: on cards like the citi Hilton reserve, for example, where if you spend so much in a year you get a free weekend night certificate at your one year anniversary, is there a way to get that cert without paying the annual fee, and without calling in and asking to have it waved, or is that basically the reason you get the cert, because if the annual fee? Is that the way it is with basically all cc yearly bonuses?

    Sorry if these questions seem kind if deal and self explanatory. I’m sure I know the answer already; I just want to be certain!

    • December 17, 2013 at 7:39 pm

      You can wait up to 60 days to get annual fee refunded. I usually do within 30 days to avoid actually paying that bill.

      You can possibly make the spend, get the free night and then cancel. The timing is a bit tight because you have to cancel within 60 days. I honestly would cancel the card and reapply possibly in 18 months after your first approval. Citicards are churnable after 18-24 months.

  4. December 17, 2013 at 7:15 pm

    Hi Rom
    Will Delta skymiles amex card give the 30,000 miles sign up
    bonus more than once to me? I have not had the card in over a year.

  5. smay
    December 26, 2013 at 8:19 am

    Yes Paul – AMEX will give the sign up bonus again on their cards once 12 months have passed since you cancelled it. You can then re-apply and get the bonus again.

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