Did you know that simply by asking, you may be able to reduce or completely waive your credit card annual fee? This article will share some ways to do that!
Why Would Banks Do This?
Credit card issuers make money off your transactions (via swipe fees), so they have incentive to get you to spend more using their card. Factors like your spending behavior, your relationship with the bank, and the general well-being of the economy all could influence the desire for banks to retain their loyal customers. The key is to find a win-win situation where you pay less fees but banks also get to keep you on as a customer.
Likelihood by Bank
The ability to get any sort of offer depends highly on the issuing bank, as well as the specific card. Here are some popular banks I have experience with:
Citi: Very likely. I've had almost 100% success rate waiving the full fees of my Citi American Airlines cards, and usually requiring only a small amount of spend (e.g. $1000 in 90 days).
Amex: Likely. For Amex's cards with annual fees, it is generally possible to get retention offers every other year. However, it also seems to be highly targeted, and change on a daily basis, so try again if you are not initially successful.
Chase: Very unlikely. Historically, Chase has pretty much not offered any retentions. However, with the pandemic there are widespread reports (especially for the $550 Chase Sapphire Reserve) of existing cardholders getting reduced annual fees.
Although none of these are guaranteed, below are some strategies that have worked in the past. It is generally recommended to try these strategies no earlier than when your annual fee hits, and no later than a month after (you usually have 1 month from fee appearing on your statement to decide and you will get a full refund if you choose to cancel/downgrade).
1. Call in to ask
It may be as simple as calling the number on the back of your card and asking if there are any retention offers available. Here are some ways to phrase the question:
My card is renewing soon, I haven't been able to use many of the benefits due to the pandemic. I was wondering if there is anything [insert bank] can do to help offset the annual fee?
Hi! I was recently charged a renewal fee, and was wondering if there are any promotions available to help reduce the fee?
This has worked well for me in the past, although it generally comes down to the card issuer. I recently called regarding my Citi AAdvantage Platinum Select ($99 Annual Fee) and was offered to have my entire fee waived after spending $1000 in 3 months. I took the offer.
2. Secure message / chat
If you feel more comfortable asking via chat, many credit card issuers now have live chat support. In my experience, Chase eventually will redirect you to call, but Amex agents will look up retention offers if they are available. In 2020, I was able to get a retention offer on my Amex Gold for 15,000 MR points (worth $300+ to me) after spending $2000 in 3 months. However, in line with other data points, I was unsuccessful the following year:
Other times, you may have more luck:
3. Check your statement
In certain cases, you may be targeted and a goodwill credit or bonus may be applied without you needing to do anything! For example, longtime Chase Sapphire Reserve cardholders are currently automatically provided a $100 credit towards the annual fee (mostly due to the pandemic).
Furthermore, some in our CreditFred Facebook Group have been able to get an additional $150 off after calling in!
4. Other tips
- HUCA (Hang Up Call Again) - There have been instances where people get a different outcome simply because of a different agent. People have also tried calling during standard business hours to increase their chances of getting the rep to seek manager approval on offers. However, don't overdo this and remember to be polite. They don't technically need to do this!
- Be prepared to cancel - Sometimes when you call in to actually cancel/downgrade the card, they can sense it and will automatically bring up any offers (if available). However, there is also a good chance that this won't come up so don't accidentally cancel a card before actually wanting to!
At the end of the day, if you don't find yourself using the benefits and can't justify the annual fee, perhaps it is the right move to cancel/downgrade your card. However, if you do find good value in it and don't mind paying the annual fee (the cards I have more than pay for themselves, and any additional retention offer is a plus), it doesn't hurt to at least ask and see if there are any offers!
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This site is for informational purposes only. Contents and opinions expressed are the author's alone and your experience may vary. The author is not a financial/investment/tax/legal professional of any kind. CreditFred strives to provide the most accurate and up-to-date information possible, but the strategies and tips provided should not be replicated before you conduct your own research and, if needed, consult with a financial professional.