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Will it hurt my credit score if I cancel one of my credit cards that charge me an annual fee?

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Top Contributor
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Yes, it would lower your score

for a while. 

If your score is in good shape now, I'd suggest that you open a new credit card to replace the "Available Credit" you will lose by closing the old account.  You score will fluctuate for a short while, but should stablize with in a couple of months.

Personbally, I only have 1 card that charges me an annual fee.  Thats a travel/milage card that off sets my annual fee by giving me a credit for 3 times the fee once a year.  Otherwise, Don't keep any cards that charge fees.

Top Contributor
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I would be careful of what Eddy says.  He is correct in many ways, but did not factor in one other thing that will lower your score and will be a double hit doing what he says.

Average age of credit. Some models only use open credit some use all reported credit.  For the latter your score will drop due to age of credit being lower. Opening a new card to maintain the same usage/avaiable percentage will lower all scoring models for average age of credit.

Depending on your current usage to available I would just close if it does not effect that percentage into another bracket, if it does then doing what Eddy suggested would help the more important asspect of your scores, but you will still see a drop. Or pay off other credit to maintain the percent used.

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You did not indicate what type of card or what benefits you derived from paying an annual fee.   You have three things to consider:

1. - Utilization -  This lowers your available credit and thus could increase your Utilization.  Easy fix, ask one of your current cards for an increase that would restore the amount of credit available on this card.   If you credit line remains unchanged with the cancellation, no harm is done.

2. - Average agent of accounts -  How will this affect your average agent of accounts.   Never replace a card with a new card.   This only amounts to 15% of credit score and the impact could be minmal.   My oldest card as a $35 fee with no rewards.  I consider this a minor issue when I look at the fact that it is 5 years and my oldest account.  ALthough, if you have another card with the same age, it would have minor affect.  

3.  What do you get in return for the annual fee.   If rewards offset the annual fee, increase its usage to minimize the affect.

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