A credit card annual fee can be more difficult to negotiate than other fees, such as overdraft, ATM, and late fees. There are a couple potential reasons for this.
When you sign a credit card offer, you’re signing on to all of the perks, points, and luxurious benefits. However, you’re also agreeing to the fees and penalties that come with it. When contacting a representative of your credit card company, you have to be extra prepared and extra persistent when asking for a fee waiver.
Another reason consumers might not be successful: They are not prepared. It’s important to know the tricks and proper phrasing to maximize your chances of getting the fee waived.
Although negotiating these fees can be more difficult, it is certainly possible. Consumers should remember they have more power and influence than they might realize. A bank, credit card issuer, or other institution spends ample time and money to attract you and onboard you as a customer. They would rather meet your needs — or at least meet you halfway — than lose you as a customer altogether.
This turns into retention offers.
What Is a Retention Offer?
A credit card issuer will extend a retention offer, or incentive, if you consider cancelling your credit card.
Retention offers vary from time to time, by issuer, and depending on your spending history. The offer will often entail a full or partial fee waiver, statement credit, bonus points, or another enticing gift.
How Do You Get a Credit Card Annual Fee Refund?
First, prepare your argument. Know what you plan to say before you get on the phone. Make sure that you phrase your request carefully, especially if you have to get through layers of automation before speaking with a human being.
Don’t say: “I’d like to close down my account.” You probably don’t want the automated system to shut down your account on the spot.
Do say: “I’m considering closing down my account.” Let them know that you’re concerned about the annual fee — ask if they can waive it. If they can’t, they might have offers to justify the cost.
If there are aspects of your policy that you enjoy, such as airline or hotel points, work those into your argument. Tell the representative that you enjoy your card’s perks, and you’ll pay the annual fee if they could give you more points.
Recommended article: Citizens Bank Overdraft Fee Guide
Timing is everything
Time your request right. Many issuers require you to request a waiver within 30 or 60 days of the fee being applied to your account, or the statement closing date.
Ultimately, it’s your issuer’s decision whether they will waive the fee or extend a retention offer — unfortunately you won’t always succeed. Your payment history typically also affects whether or not they will accommodate your request.
Annual Fee Refund Policies for Top U.S. Credit Cards
Cushion has analyzed more than $13 billion worth of transactions. The top five issuers that offer credit cards with annual fees are: American Express, Bank of America, Capital One, Chase, and Citibank. Each company has their own policies for annual fee refunds.
American Express
Typically, American Express will entertain retention offers if you contact them to cancel or downgrade your card within 30 days of the statement closing date.
A couple of its most popular credit cards include the American Express Platinum Card® and American Express® Gold Card. The Platinum fee runs $550 per year, while the Gold is $250.
Bank of America
The Bank of America annual fee refund policy is more vague, moreso dependent on your credit card history. To be safe, contact your issuer after the fee has been posted to your account but before the statement due date. When negotiating a fee waiver or bonus points with the representative, focus on your value, loyalty, and history as a customer.
Bank of America has a fleet of 22 personal credit cards, a handful of which have annual fees that range from $59 to $99 per year.
Capital One
The Capital One annual fee refund policy typically requires you to reach out within 30 days of the statement closing date if you’re thinking about cancelling your card.
The Capital One Venture® and Savor® cards have $95 annual fees, and the QuicksilverOne® is $39.
Chase
Under the Chase annual fee refund policy, a representative may waive the charge or provide an incentive if you are considering closing your account, but you must contact them within 30 days of the fee appearing on your statement.
Some of Chase’s most popular credit cards include the Chase Sapphire Preferred® card, Chase Sapphire Reserve®, and Chase Freedom Unlimited®. The Reserve charges a $550 annual fee, Preferred charges $95 per year, and Freedom Unlimited has no annual fee.
Citibank
The Citibank annual fee refund policy tends to be a bit more lenient than its competitors. You can contact them within 30–60 days of the fee posting to your account. Although the deadline is slightly longer, it’s best to contact the issuer as soon as possible.
Of Citi’s basic credit cards, the Citi Prestige® and Citi Premier® are the only two with an annual fee. The Prestige runs $495 per year, and the Premier is $95.
Recommended article: Citibank Overdraft Fee Guide
Cancel the Card or Continue?
If your credit card issuer does not waive the fee or extend a retention offer, are you willing to pay the fee? Or will you cancel your card?
There are a couple things to take into consideration. Rather than cancelling, some issuers allow you to downgrade to another credit card with a lower annual fee. Although the benefits may not be as glamorous, you can keep your points and rewards and transfer them to the new card.
Before cancelling, store any membership rewards points safely in another account at the same institution or transfer them to an account at another institution.
Finally, be aware of how cancelling a credit card can affect your credit score. Each time you apply for a new credit card, your score drops a few points due to the hard inquiry. Avoid opening and closing credit cards too often because those penalties will add up.
Also, credit history length accounts for 15% of your total score. If you close one of the credit cards that you’ve had the longest, it could bring your score down.
The Bottom Line
Although asking for a credit card annual fee refund may be a little more difficult than negotiating other fees, it is still possible. Before contacting your issuer, prepare your argument. Make sure you contact them in a timely manner.
Credit card issuers will often offer a full or partial annual fee refund, statement credit, or bonus points if you consider closing your account. Every issuer won’t refund the fee every time. If they don’t, decide whether you will keep your card open or cancel it.
Before cancelling, consider downgrading to a card with a lower annual fee, as well as how your score could be impacted by closing the account.
