Q: I have a credit card that is my second-oldest, but it is a sub-prime card that charges a monthly maintenance fee of $6.95. I’ve had this card for three years.

I only use this card for small amounts each month and to continue the account history. Will closing this account hurt my score? I have eight other cards that are not sub-prime.

A: I don’t think closing a sub-prime card that is costing you nearly $7 per month (or about $94 per year) is going to hurt your credit history or score that much, if at all. I think you’ll find the effect on your credit history is small to none simply because the card isn’t that old yet, and you have at least one other credit account that is older.

If you told me that you were thinking of closing a credit card that has been active for 10 or 15 years, and you didn’t have any other credit accounts that were nearly that old, it might be a different story.

You should strive to maintain your oldest credit accounts. But if your oldest accounts are just two or three years old, and you have several that are about the same age, you should be fine with canceling this one and saving the monthly fee.

While your credit card company may not have a replacement card that might suit your needs, before you cancel the card, you might want to investigate if you can transfer the card you currently have to a different card that does not charge a monthly fee.

If that option is available to you, you might ask if transferring the card simply transfers your credit history from the old card to the new card. You could consider that option if it’s available to you. Otherwise, if it cancels the old card and creates a new account and doesn’t transfer your history, you’ll be better off canceling that card and then choosing a card that you really would want and need.

April 9, 2009