Ask The Money Coach

Q: I Have a Visa Credit Limit of $1,325 with a Balance of $691 at 23.9%. I Pay an Annual Fee of $8.50 a Month. I’ve Had This Card Since 2004 and Have Always Paid This and All My Bills on Time. I Called to Ask For a Lower Rate and a Lower Annual Fee and Was Told All Rates Were Fixed and Can Not Be Changed. This is My First Card I Want to Eliminate. I Have Other Credit Cards I Want to Pay Off Too. Should I Pay the Minimum on My Other Cards So I Can Pay Off Visa Faster? And When It’s Paid, Should I Cancel the Card?

A: Except under certain circumstances, I generally don’t recommend that people cancel credit cards, especially in the current environment because doing so can hurt your credit scores.  Regarding paying the minimums on your other cards, yes, that can be a smart strategy if you want to put more effort into knocking out that Visa card more quickly. Read this article also, in which I offer negotiating tips to get your credit card interest rates lowered. However, if the company doesn’t budge on the high interest rate or those nasty monthly/annual fees, you might consider canceling the card — but only if you have another credit cards and other accounts with a longer credit history. If you don’t have another card, just wait until you get a zero balance on your Visa card. Then apply for a national brand credit card with no annual fee and a decent rate. When you get approved, then you can cancel the old Visa card. This way, you won’t be held hostage to a credit card that isn’t doing you much good.