Cancel a Credit Card?

[HLAuburn]

I have an Old Navy card that I use from time to time - I've had it for years. I use it when they have a good promo, like 40% off with the card and I normally pay it off, but I have left a very small balance on it before. It's always paid on time.
So I logged on to pay it off this month and I notice the APR has gone up from a horrible 20% to a ridiculous 25%! Unreal. It would mean literally pennies to me if I happen to not pay it off one month, but it just makes me so mad!
So what do I do?
- Call them up, give them a piece of my mind, and cancel the card?
- Use the card for promos and just me sure to pay it off EVERY month?
- Cut up the card, never use it, but don't cancel?

I hear so many different opinions, and I don't want to hurt my credit, but I am not a happy customer!

Thanks!

 

[Madteaparty001]

If you had it for years I wouldn't cancel it, 15% of your credit score is history, meaning the length of which you've had credit. Having a credit line open for years is very good for your score, closing it would not be. If there's a yearly fee then that's a different story. I wouldn't call and threaten with cancellation because I've heard of people doing this and the customer service rep immediately canceling the card, no haggling involved. That being said there's no harm in calling them and explaining your displeasure with the new APR. Does the store let you pay the card off at the cash register? If so then I would just keep it and pay it off as soon as I charged something.

 

[kymom99]

I would certainly call them and point out that you are a long time customer and don't understand why they raised your rate. They may lower it.

 

[supersnoop]

The rate only matters if you carry a balance. Just always pay it off and don't worry about it. Despite what some people think, there is no benefit to paying interest or keeping a balance on the card. It won't help or hurt your credit in any way.

 

[ksh1111]

If it is your oldest card by years, I would keep it. Your credit age is done as an average, so if you have other cards within a year or two and you have over 10 years of credit history, it might drop your score a few points but nothing major. If you don't plan on buying a house or car in the next 12 months it is a moot point.

Most likely the issuing credit company raised rates across the board. Credit is not nearly as profitable as it used to be, so rates are raised to compensate.

 

[btk2333]

The rate only matters if you carry a balance. Just always pay it off and don't worry about it. Despite what some people think, there is no benefit to paying interest or keeping a balance on the card. It won't help or hurt your credit in any way.

I agree- I have no idea what the interest rates are on my credit cards, I've never carried a balance so I pick my credit cards for rewards and benefits, not APR.

 

[si-am]

I always heard that store credit cards don't carry much weight with your credit score, unlike Visa/MasterCard/ etc.

I would just pay it off and then not use it! (Or if you do, pay it off immediately!)

 

[Jimsig]

If you do cancel the card tell them you want it noted that it was "cancelled at your request" and in this case due to the interest rate being raised. That way in the future when applying for credit they know that you canceled it and not that it was cancelled on you as that could raise some flags.

 

[michellelovesthemous]

I agree with above "cancelled at consumers request" if you choose to close, but if it is your oldest card and you cancel it, it then makes your next card become your oldest account for example ON was from 2001 JCP was the next card you got in 2005 it shortens your credit history from 14years to 10 years saying you had no cards before the ON one. Hope that gobblydgook makes sense!

 

[Judique]

I have an Old Navy card that I use from time to time - I've had it for years. I use it when they have a good promo, like 40% off with the card and I normally pay it off, but I have left a very small balance on it before. It's always paid on time.
So I logged on to pay it off this month and I notice the APR has gone up from a horrible 20% to a ridiculous 25%! Unreal. It would mean literally pennies to me if I happen to not pay it off one month, but it just makes me so mad!
So what do I do?
- Call them up, give them a piece of my mind, and cancel the card?
- Use the card for promos and just me sure to pay it off EVERY month?
- Cut up the card, never use it, but don't cancel?

I hear so many different opinions, and I don't want to hurt my credit, but I am not a happy customer!

Thanks!

I understand how you feel. I just had my AMEX interest raised. It's still not high but the actual fact that they raised it annoyed me.

I'm keeping it.

It's not my oldest card, but it is about 20 years and it has a hefty limit, which means it would affect me in more than one way if I closed it.

I had a balance when it was raised and they were only going to charge the new rate on new purchases starting on a certain date. I paid it off instantly. Will now never run a balance. Will use the card and do the monthly payoff.

As soon as I paid it off, they started requesting me to 'update my income' both by email and online on the website.

Now I'm thinking they have my 'worked part time stay at home Mom income' as their decision making criteria, as opposed to what I do now. Not going to give them any info....don't need any more credit and the % is inconsequential at this point. They may have gotten a bit nervous when I opened 2 Disney cards and SW Air card. Oh well.

 

[nalajms]

OP - if you have good credit, I'd close the Old Navy card. I do not believe store cards weigh as much as the major cards. If it was a Visa, I'd say keep it. Another possibility is to have it linked to your bank account and autopay, if that's possible.