Tubpbs wrote:I think the advice given by KCM is poor. It ignores the positive impact of positive reporting from accounts in good standing etc etc. Every time you pay an account as agree (whether it's $4 or $3,200), the lender reports that you paid your bill on time that month. This is valuable data for someone trying to strengthen their credit profile. If you are trying to rebuild or build a strong credit profile, at this point in your process, I think it would be wise to keep the accounts open. I would certainly try to change the product with an annual fee to another without one, but otherwise I'd personally keep them both open.
Respectfully agree to disagree, then.
The crux of the matter is whether the OP wants to buy a sweater or a pack of gum on the $39 AF card every month (or put a utility bill on it) in order to get the "payment history" points. Otherwise, it's just a dormant AF card that would do as much for OP's credit dead or alive (assuming OP's utilization is low enough).
With several other cards in good standing (and being used regularly), that should be enough to build credit quite rapidly. If OP only had one or two other cards, I'd say keep the $39 AF card and buy the gum. But, if the OP cancels the QS1, that's still four cards to charge on every month and get all the payment-history love from FICO. I'd be hesitant to say to anyone with certainty that having regular payments on 5 cards would be significantly better than 4.
Also, as OP's cards are all roughly the same age, one factor weighing down his/her score is probably length of credit history -- which won't be affected by saving $39 a year and cancelling the card.
Personally, I've been pretty merciless about cancelling my low-limit credit-building cards as soon as I was able to do better. At the time, I didn't really know much about credit building. I just figured "I don't want this card. I'm going to cancel. And I'm going to get better cards to replace the cancelled ones, use them, and pay them off on time." My credit profile was even thinner than the OP's in 2014 (and still is!). My score is now above 800.
In the end, I don't think the OP would torpedo their credit by following either of our advice. My point was simply that he wouldn't anger the FICO gods too much by saving $39 a year.