For the last few months, it's been so tempting to keep going with only making the minimum payment. I could see the balance going down, so why not? But, in keeping with my 40 Before 40 goals, I made myself add more even if it was just $10.
Before I made the last payment, I made a phone call to my bank. If you're about to pay off a card I strongly suggest you ask these two same questions.
Banks are starting to close inactive credit accounts and I wanted to make sure mine wouldn't do the same. I asked if, once I paid the card off, would they close it citing non use of the card and do they consider the annual fee as the card being used? The rep hadn't heard anyone ask the second question and she checked with a manager before answering.
I learned a few important things from that call:
1. At my bank, they will not close my account without notifying me first. 2. They do not consider the annual fee as the card being used.
3. I have 12 months from the time the card is paid off to use it again before they will notify me that they will close the account.
4. When I use it again, there is no minimum amount I have to charge. In the words of the customer service rep, "you can buy a pack of gum if you want to."
I have a pretty good credit score because of this card. There's no way I want to put that in jeopardy by having the bank indiscriminately decide to close the account because I'm not actively charging on it.
As far as I'm concerned, credit is a necessary evil. When I got my first card back in college, I had no idea how to use them. That came back to bite me in the butt. I've made a to educate myself about different types of cards and credit scores. I'm passing on that information to Tyler as well. Hopefully he'll be much smarter about it than I was and not have the same credit rating highs and lows that I've had. Next up, tackling the joint cards. But for now, I'm celebrating! (not by shopping though!)