Don’t Just Blindly Accept Your Credit Card Annual Fee

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With airlines becoming ever more stingy in the way they hand out miles/points it’s never been more important to make sure you’re maximizing your earnings from elsewhere…and there’s no better way to earn miles and points than with credit card spend. The problem is that the credit cards that will earn you the most points or that have the better benefits tend not to be free and the cost of holding these cards is therefore part of the cost of earning the miles and points.

With the higher-end cards, like the Amex Platinum, Citi Prestige and the Chase Sapphire Reserve, there isn’t really too much you can do to negate the $450 annual fee other than make sure your maximizing the benefits the cards offer – like using up the travel credits that all three cards offer – but this isn’t necessarily the case with the less expensive (but still good) credit cards.

One of my cards that has been seeing less and less activity over the past year is the AAdvantage Aviator Red credit card and this is because I’ve chosen to put my American Airlines spend on cards like the Citi Prestige (3 ThankYou points/$ on airfare) and the Amex Platinum card (5 Membership Rewards points/$ on airfare).citi prestige credit card

With American Airlines getting ever worse at releasing award inventory I much prefer to earn transferable reward currencies like Citi’s ThankYou points or Amex’s Membership rewards than to collect AAdvantage Miles that I may or may not be able to use. And this has made my Aviator card somewhat redundant.

Last week the $89 Aviator annual fee hit my account and it didn’t take me long to realise that I really couldn’t justify paying it. I’m booking fewer and fewer tickets through American Airlines now that it makes more sense to book through its partners (to increase Elite Qualifying Dollar (EQD) earnings) and I’m not in a position to manufacture enough spend to generate the bonus Elite Qualifying Miles (EQM) or EQD that the card offers. I’d be kidding myself if I said that I could see a short-term use for this card.

The thing is that I don’t like having to close down credit card accounts if I don’t have to – the cards all add to the ageing of my credit history and the credit offered by the cards all held to improve my score too – so I like to see if there’s anything else that can be done….short of actually paying to keep the card for another year.

a close-up of a credit card

I called up Barclaycard and this is how the conversation went (I’m paraphrasing here):

Me: Hi, I see that the annual fee for my Aviator card has hit my account and, if I’m being honest, I can’t really justify paying to keep the card for another year so what do I have to do to close down the account?

Agent 1: Let me just look up your details……..(pause)……would it help if you didn’t have to pay the fee?

Me: Erm…yes, sure. If I don’t have to pay the fee of course I’d consider keeping the card.

Agent 1: Ok, let me just transfer you over to a colleague who will be able to assist you.

Me: Ok, thanks.

Ok, I’m not going to type out the entire of the rest of the conversation but, in a nutshell, the next agent was even more helpful.

This is what he did:

  • He issued me with a full rebate of the annual fee
  • He offered me 5,000 bonus AAdvantage Miles if I spend $1,000 on the card in the next 90 days
  • He increased my credit line by $2,500 without a pull on my credit score

Now that’s what I call a successful phone call – I have my line of credit increased (good for my credit score), I get some bonus miles should I want them and I get to keep the card free of charge for another 12 months just incase it suddenly becomes useful again.

It’s not always as simple as this (this was easily one of the quickest annual fee rebates I’ve ever had) and sometimes you have to actively ask for a “retention agent” or the “retentions department” before you make any headway…but it’s always worth a phone call.

Will this always work? No, definitely not, but you’ll never know if you don’t ask.

This tactic doesn’t only go for credit cards that you’re thinking of cancelling.

Don’t be afraid to bluff with cards that you have no intention of giving up as you can always back out at the very last minute if it looks like an agent is actually going to cancel your credit card at your request – I’ve had to do this a number of times and I’ll probably have to do this again next week when I ring up to “cancel” my Chase Sapphire Preferred credit card (The CSP seems to be one of the cards with which this technique works least frequently).

a blue and silver credit card

There doesn’t appear to be a scientific formula for determining if you’ll get your annual fee rebated (or at least get an offer of some bonus points which will help negate the annual fee) and experiences will vary from card issuer to card issuer and cardholder to cardholder…..but you should never be afraid of picking up the phone and asking.

So, the moral of the story is that you should never ever just blindly pay your credit card annual fees….you could be paying for something you really don’t have to.