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How to Get Your Annual Credit Card Fee Waived or Reduced

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Tom Goward | 21/05/2020

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Annual credit card fees are universally disliked by points nerds and frequent flyers alike. While there are credit cards out there with no annual fees, the best frequent flyer cards will almost certainly have a fee attached. Whether you are searching for a card with a high earn rate or one with a large signup bonus, you could be looking at anywhere from $99 to upwards of $1750 for the annual fee (sometimes even higher!).

While some cards may offer a reduced or waived fees in the first year, you’ll likely have to pay the full annual fee when that dreaded card anniversary comes up.

But don’t despair! There is no harm in contacting your bank to ask if you can get a retention offer before the fee is charged. In this guide, I share the tips and tricks you can use to help get your annual credit card fee reduced or waived.

What should I consider first?

Most cardholders request a retention offer when their annual fee is approaching, at a point where they may cancel the card. Before calling your bank, it is a good idea to consider what you will do if you don’t receive a retention offer. Will you keep your card or cancel it over the phone? If you plan on cancelling, it may be a good idea to clear your balance before you call.

There are many factors to consider before going cancelling your card, including:

  • When your annual fee is due – How long do you have to make a decision?
  • Your other finances – How tied to the bank you are
  • How many points are owed – If your points transfer to a frequent flyer program monthly, it may be beneficial to wait for any owing points to transfer. If you have a bank rewards card, these points will likely expire when you cancel your account, you may wish to transfer them out before calling.
  • Other cardholder benefits – Have you used your card benefits like lounge passes and free flights?
  • Direct debits – Do you have any direct debits that will need changing?
  • Insurance benefits – most cards come with travel insurance, will you still be covered if you close the card?

What should I say?

Before you call your bank, it is important to understand the new credit card rules on lenders that came into effect in January 2019. Banks must now provide cardholders with the ability to cancel their credit card online, as well as being required to assist customers with any requests.

This means you will have to word your retention request carefully. If you say, “I want to cancel my card.” the lender is required to assist with your request, and cannot offer a retention bonus to keep your business, as was previously the case.

Although, if you say something along the lines of, “My annual card fee is due soon and I am considering switching banks, but I would like to ask if you can offer any incentives to stay?” the lender is able to offer a retention bonus.

You want to be upfront about what it is you’re looking for because lenders can’t proactively offer you incentives.

What to expect 

While a credit card retention offer can be a great reason to stay with your current card provider, I should mention that it is common for banks to deny a retention offer request. It’s an unfortunate fact of life that banks aren’t necessarily looking to help their customers out all the time and you might not be their ideal customer.

Banks and credit card companies make a substantial amount of money from transactions (they get a small cut on everything you pay), this could mean that if you use your card for all your daily expenses, you’re considered more “valuable” compared to someone who only used the card to get a bonus points offer.

Most often, the customer service person will tell you quite quickly if you are eligible for any offers. Although, sometimes you may need to be transferred to someone who handles cancellations. If you are fortunate enough to receive an offer, you may receive something like:

  • A frequent flyer/rewards points bonus
  • A balance transfer offer
  • A reduced or waived annual fee

Summing up

Annual credit card fees are an annoying part of life, that said for some cards they are worth it. For example, many American Express cards come with travel credits and other perks each year which greatly offset the actual cost of the card.

Inquiring about a retention offer with your bank may help to get your annual fee reduced or waived. When calling your bank, the most important thing is to be prepared.

Are you looking for a new card? Check out our list of the best frequent flyer bonus offers!

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Tom Goward

Tom is a Hobart-based writer with a passion for aviation and travel.

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