I apply for and open numerous credit cards each year as part of my periodic App Parties. Many of these cards come with annual fees, and most are waived the first year. Whether the card is new or you’ve owned it for several years, you have a decision to make each time the annual fee comes due:
- You can close the account.
- You can pay the annual fee.
- You can call and ask for a retention bonus.
I always do option 3. If you don’t, you’re missing out on some potentially great bonuses that may make it worth your while to retain the card.
Which Cards Am I Considering Closing?
Since I did an App Party in August 2012, there were a number of cards for me to make a decision on:
- Chase British Airways which provides 1.25 points for every dollar spent and offers a Companion Pass when spending $30k in a calendar year.
- Chase Ink Bold which provides 5x points for office store purchases and telecom spend.
- Citibank Business American Airlines which offers a 5% mileage bonus upon renewal.
- Bank of America Hawaiian Airlines and Bank of Hawaii Hawaiian Airlines cards offer 2,000 miles at renewal plus 50% off a companion airfare each year.
- American Express Premier Gold doesn’t offer much except the occasional bonus transfer options and Amex’s great customer service
What To Say When You Call
In the couple of months leading up to your calls, you should put a few token charges on the accounts so that they see you as a continuing customer, not someone who just threw the cards in a drawer to collect dust after receiving the initial points.
As you’re preparing to make your calls, review the benefits of your card and familiarize yourself with them so that you can point to a benefit or two as reasons why you’d really like to keep the card, if only something could be done about the annual fee.
When you do call, NEVER call to say that you are canceling the card. This backs the agent into a corner, and leaves you without flexibility.
How I say it is like this “I’m calling because I know the annual fee is coming up soon on my (name of card) card, and I’m undecided on whether to keep the card. I’m unsure if the benefits of this card are going to outweigh the $___ annual fee. Is there something you can do to help me with this?”
This puts the ball back in their court. Sometimes they will say that there’s nothing available, while other times you can receive a set amount of points or a challenge (where you’ll need to meet a certain spend within a specific timeframe).
What Happened When I Called?
The results were mixed, but I did receive some additional benefits for about 15-30 minutes of my time.
- Chase British Airways offered me 5,000 Avios as a retention tool. The points have posted to my account, but I’m still not sold on the $95 annual fee. I’m going to close this account and transfer the credit line to another account for future App Parties.
- Chase Ink Bold was traded in for the Chase United MileagePlus Explorer business card during my May 2013 App Party.
- Citibank Business American Airlines offered either a $75 credit or 10,000 American Airlines AAdvantage miles if I spent $5,000 in 6 months and paid my $75 annual fee. In my mind, I’d rather cancel this card and use that $5,000 spend on my next App Party and earn 25,000-50,000 miles.
- Bank of America Hawaiian Airlines said there was nothing available, so I’d have to pay the $79 fee or close the account. I’m closing this account for sure.
- Bank of Hawaii Hawaiian Airlines was much more positive and suggested I wait until the fee posted on my account, then call back and ask them to waive the fee since “I’m a longtime customer”. If they waive it, I’ll keep the account and put a few $100 in spend on the card over the next year to keep it active.
- American Express Premier Gold said that they didn’t have any offers right now, but that could change. They suggested I wait until the $175 annual fee posted to my account, then call back and see what offers were available then. If there’s not a good offer, there’s no way I’m paying $175 to keep this card!
Like anything in life, before you proceed, you should have an exit strategy in mind. And, along the way, revise that exit strategy accordingly as circumstances change or become more clear. It’s always a smart move to call 1 or 2 months before the annual fee comes due and again when the fee hits the account.