My two Bank of America cards were at 9.99% and 7.99% fixed. They were jacked up to 14.99% and 12.99% variable, but the new rates could be declined and the balance returned to the old rates and paid down on the regular monthly schedule. In the first case, I kept the card open, but made a substantial paydown on the balance. In the second, I refused the new rate, and will pay off the balance. So far, Chase (which has always been variable) dropped their rates to me when the prime rate dropped, and I am also paying off two older balance transfers (life of loan) with them at 2.99% and 3.99%. I usually pay Discover in full, but put some hotel bills on last month to get the 5% rebate. Will pay it fast. With the drop in investment values, I now watch even more closely to avoid any trouble. I pay on time and more than the minimum. ONE THING: You are advising closing credit accounts that go variable and raise rates. Most advice I've seen is NOT to close accounts 1) because credit agencies like to see a long period of good credit behavior and 2) because it cuts the total credit available, thus raising existing balances to a higher percentage of a lower total credit amount. Comment?

Dear Dolans
I appreciate all of the information. But I never notice anything pertaining to me. For instance, I got behind in my credit card and wasn't able to catch up so I stopped paying and it was sent to collections. From there I was able to settle with them with the payment in full. But now the problem is, I check my credit report only to find out that the original creditors pick it back up and are now asking for the other half of payment. I sent the information to the credit agency , the copy of check ectera. What must I do to get this taken off of my credit? Settled with collections and they reduced it to half. It isn't off my report.

i gooffed, paid all open accounts, to show for a good fico. i needed a new mortgage. one card was cancelled for no activity. this past sept. another went to collections because the bill was sent to old address. my fico hit was 61 pts .now i rank a 640 risk. i am really P.O. because experian ommitted that account in 4 reports in the past. they were able to send new offers to my new address. i think they like putting the screws to low risk fico scores. no hassle card ,MY ASS...

I thought it is better to just keep the card open since closing them would reduce your utilization figure (the exact term is escaping me) -- the percantage you have charged divided by your total credit line of all your cards.

Why just not cut them up, if you want to avoid temptation, and keep them open? Perhaps I'm not considering if they will close it from lack of use (I have 3 VISA types and I make sure to periodically use them all -- but I pay in full, and often just make a small purchase. For example, my Sunday paper delivery is on one).

However, if you have a prob with not paying bills on time (and I mean in full), and live above your means.... in my opinion, cutting them up is the way to go. Just not sure if closing them is always necessary (assuming no fee card etc).

My Fico score was 814 when I decided to cancel a credit card that had not been used for years. Capitolone billed a yearly fee of 55.00.When I received the bill I called Capitolone and asked them to cancel the card and remove the fee. They promised to do so. But the following month I got another bill for $55.00 plus late fees.I called again and they promised that it would be cancelled.By the 4th month the bill was $75.00 and I was now branded a late payer.I was asked to pay the bill and then would refund the amount. Stupidly I did so and capitol one did refund the money. The problem is that $40.00 appears as the amount owed to Capitolone on my credit score. I can not get this removed. No merchansize was bought. All this is their error in billing and late fees for an account that I asked to close.My score dropped to 763.
A year has now passed and this derrogatory note remains on my credit score account for 7 more years.
Samantha Amsterdam

@Samantha Amsterdam
Did you pay the APR fee of $55.00 you owed? It sounds like you didn't. Remember, it's an annual fee which means if you received a bill the following month, the credit card company didn't receive the first payment.

If you payed it off, then you should have a record of the payment. You can send a letter to the credit bureau explaining the discrepancy with your proof and they will investigate.

I am in a similar situation. I was cleaning out my draw and I found an old credit card. I called them and it turns out I owe them a 29.00 dollar APR fee that is due early next month. If I didn't call it would have accumulated late fees and my credit score would have dropped. I just payed the fee. I'm going to call them next to cancel and then follow up with a cancellation letter.

Good luck with your situation.

could you tell me aboubt the best thepay down tyour debt andthey pay half your and get you out of debt sooner

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Greetings, I enjoy your blog. This is a nice site and I wanted to post a note to let you know, good job! Thanks

I remember hearing Suzie Orman saying that you should never close your accounts..just cut up the card. Something about how the credit report reads? Is this not correct?

Hello, I have read over and over again that canceling an account (credit card) will certainly hurt your credit score. So what is the truth, cancel or not to cancel??

Just play their game.
I got a bill from Sears stating that I owed $0.00 dollars. After ignoring it, since I didn't owe anything, I started to get nastier notices and even threats of turning over to collections all still for $0.00. After about 9 months of phone calls to cyberspace and some clerks who promised to take care of it but never did. I got a great idea. I sent them a check for $0.00. I never heard from the collectors again and then closed my account.