Choosing a new credit card?

[manleywoman]

Was wondering if everyone here could help.

I have a credit card that I've had for so many years I have the number memorized. It has a $43,000 limit on it (and I've never been close to hitting a balance that high) which looks good on my credit score. It's a card that allows me to gather miles on American Airlines, that I can then transfer to many other airlines, stores, etc. as needed.

Last year I got a letter from them saying that in 2011 the card terms would be changing. I can't remember exactly what the terms were, but it was something along the lines of (1) the membership fee was going up from $50 to $85, and (2) I *think* the APR was going astronomically high. I always pay my cards in full now, but there was a time when money was tight and I couldn't, and I don't want to have an APR that high. So I opted out of renewing the card.

So here we are a year later, and this card expires in ten days. I just spoke with them, and they can renew the card with the new membership fee of $85, but they will waive the fee for the first 12 months. Plus they will give me a bonus of 40,000 miles as long as I spend $1000 in the next four months (easy) and a free companion ticket on American Airlines as long as the first ticket is worth $299.

I wonder if I should just take the deal and then have a year to cancel the card when the membership fee comes up again next year, or if I should shop for a new one. I do worry about the impact on my credit score . . . having a card for this long with such a high credit availability always looks good on your record, and I can't guarantee that any new card I get is going to give me such a high balance right away. So is it "worth it" to pay $85/year for my credit to look good?

FYI: my other credit card doesn't have a credit limit nearly that high, and the last time I tried to get it raised to look good on my credit score (which granted was a few years ago) they wouldn't do it. I will call them and try it again. ETA: called them and they again won't raise it. :(

So . . . advice? And if I should shop for a new card, where's the best place online to comparison shop for cards?

Thanks

[milanessa]

Never mind.

[barbk]

Manleywoman -- I'd take them up on the offer while you look for a new card. A reduction in your available credit by as much as that line represents will really whack your credit score, I'd think.

American Express Blue Cash is considered pretty good, as is the Amazon Visa, at least if you don't run a balance. I think that if you do run a balance, you might be better off with a credit union card, which usually comes with much lower rates. (Though credit card balances are pretty risky in general.)

[Aceon6]

I'd take them up on it and call them back in 9 months asking for a no fee card with a lower APR. If you've never been late, you may get what you ask for.

As for getting a good card, look locally. Credit unions, college alumni associations and affinity groups like AAA have no fee cards with decent rates. IIRC, Consumer Reports liked the Chase Freedom card and a couple of the rewards cards in their last roundup, but the interest rates on rewards cards tend to be the highest.

[Prancer]

I've heard conflicting things about the effect of canceling a credit card.

Not a big deal (http://moremoney.blogs.money.cnn.com/2010/03/02/dont-sweat-it-canceling-a-credit-card-wont-hurt-your-score/)

But a FICO expert says it can be (http://www.bankrate.com/finance/credit-cards/closing-credit-card-dings-credit-score-1.aspx)

Apparently a lot depends on how you do it. (http://www.creditcards.com/credit-card-news/help/cancel-credit-card-6000.php)

[manleywoman]

Thank you!

[Angelskates]

manleywoman - do you use the benefits (points, miles etc.) a lot? Would you use them all when you gave the card up, or can they cash out? (My CC has cash back for points) $85 might be worth it if you use the miles etc. and can't get as much, or as useful, mile with other cards.