Question: One of my two credit cards will begin charging an annual fee this year. I have had this card for ten years and always pay the entire balance each month; my credit limit is half my annual salary. I'm conflicted over whether I should keep the card--I am opposed out of principle to spending money for the privilege of spending my own money. However, closing the card will vastly decrease the amount of available credit I have, and will probably hurt my credit score. Do you think I should suck it up and pay the annual fee to keep my credit card? Eric, Washington DC

Answer: I don't see why you should pay a fee to keep a card you don't want and remain a hostage to the credit scoring industry.

You might take a brief hit to your credit score when you cancel the card. But so what? Are you buying a house in the next couple of months? A new car? If not, the nick to your score is meaningless. The best way to maintain a good credit score anyway is to pay bills on time, which you do.

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