Regularly evaluating the credit cards in your wallet is a smart habit to ensure you’re getting the most value from them. As time passes, the cards you initially obtained for their specific perks might lose their relevance, or changes in your spending patterns could alter the value of certain bonus categories.
If you’re paying an annual fee for a card you rarely use, it may not be worth the cost. However, before you make the decision to cancel or downgrade your card as the renewal date approaches, it is a great idea to contact a customer representative and inquire about potential retention offers that could make the card valuable enough to keep for another year.
This guide will cover everything you need to know about credit card retention offers and how to get extra bonus points or a partially waived annual fee for just holding onto your existing cards.
What is a Credit Card Retention Offer?
Retention offers are incentives that credit card issuers provide to encourage customers to keep their cards open longer, especially after the issuer has invested hundreds of dollars in welcome bonuses to entice them to open the card.
If a cardholder closes their card after only a year or two without using it regularly, the issuer will likely lose money on that customer. To recoup their investment, some issuers extend targeted retention offers, which can include bonus points, statement credits, reductions, or waivers of annual fees – anything that persuades the cardholder to keep the card open and continue spending on it.
For example, I have had my annual fee partially waived on American Express Platinum Card® and other cards I have been offered bonus points for keeping the card.
How to Ask for a Retention Offer?
Retention offers are not just for when you’re trying to close a card. While you may have the most success asking for a retention offer around the time your annual fee posts, you can try your luck at any time.
However, with more companies using automated systems, how you phrase your request is crucial. Instead of saying, “I’d like to close my credit card,” you should say, “I’m considering closing my card” or “I’m not sure I want to keep paying the annual fee on my card.” Otherwise, you risk the automated system shutting down your account before you can speak to a human about it.
Each issuer handles retention offers differently. American Express has a dedicated retention department, and you can also use their online chat feature or mobile app. For other cards, a front-line customer service representative might be able to help you.
When asking for a retention offer, mention that you like certain benefits but are unsure about the annual fee. If the agent starts reading talking points about the card’s value, deflect by bringing the discussion back to the annual fee you don’t want to pay. You can also mention having other cards with similar perks or that you don’t spend much on the card.
In my experience, American Express seems to be the most generous with retention offers while Chase rarely gives them out, though it’s more common on cobranded Chase cards than their Ultimate Rewards-branded cards. Other card issuers may offer retention bonuses, but much less frequently.
Types of Retention Offers
Credit card issuers may offer three different types of retention offers, depending on the issuer:
Annual fee reduction or waiver: This can be as good as cash, allowing you to keep the card open for another year, potentially boosting your credit score. When combined with perks like statement credits or elite status, an annual fee reduction may be enough to make the card worth keeping.
Bonus points or miles: Sometimes you’ll be awarded points for agreeing to keep the account open, but more often, it will be an offer similar to an initial welcome bonus, requiring you to spend a certain amount of money within a specified period to earn bonus rewards.
Statement credits: Similar to bonus points or miles, statement credits may be applied directly to the account, but they often come with a spending requirement.
It’s important to note that the more you spend on a card, the more likely you are to receive a retention offer, as issuers want to keep their most valuable customers.
The Verdict
Whenever your credit card’s annual fee comes due, you’re faced with a choice: keep the card active, request a downgrade to a lower or no-fee version, or close the account entirely. Before making a decision, it’s wise to invest a small amount of time contacting your card issuer to inquire about potential retention offers
In terms of pure return on time, there aren’t many better deals than negotiating a credit card retention offer. A quick call could save you hundreds of dollars in annual fees or earn you valuable bonus points or statement credits, making it a highly efficient use of your time.
Don’t let your annual fee renew automatically without exploring your options – a retention offer could make all the difference in deciding whether to keep, downgrade, or cancel your card.
