- Day 1 – What’s Travel Hacking all about?
- Day 2 – Getting Organized
- Day 3 – Types of Miles and Points
- Day 4 – Credit Card Strategy
- Day 5 – Southwest Companion Pass
- Day 6 – Business Credit Cards
- Day 7 – Hotel Free Night Sign-Up Bonuses & Annual Certificates
- Day 8 – How to Apply & Track
- Day 9 – Not Instantly Approved
- Day 10 – Meeting the Spending Requirement
About a year from now you will notice that some of the credit cards you applied for will begin charging the annual fee to your credit card.
Now, there are many many credit cards that I keep that have annual fees, including:
- Chase IHG – $49 annual fee for one free night at ANY IHG property
- Chase Hyatt – $75 annual fee for one free night at any category 1-4 Hyatt property
- Citi AT&T Access More -$95 annual fee for 3X points online
- Chase Ink Business Plus – $95 annual fee for 5X points on cable/internet, phone service, & office supply stores
- Citi AAdvantage Platinum Select – $95 annual fee for 10% rebate when redeeming American Airline points
- American Express Platinum Card – $550 annual fee for $200 in yearly airline credits, $200 in Uber credits, Centurion Lounge access, 5X points for air travel, Amex Fine Hotels & Resorts booking, and Hilton & Starwood Gold status
But there are times when credit card companies reduce a card’s benefits and you may no longer feel that the ongoing benefits are worth the ongoing annual fee. For example, Citi has reduced the Prestige’s fourth night free benefit from unlimited to only two times per year. They have also increased the card’s annual fee. I may end up canceling the Prestige when the next annual fee is due.
I also almost never worry about the impact to my credit score from closing an account. If you remember back in the Day 1 Lesson, I had opened 18 new credit cards and closed 9 credit cards in a two year period and my credit score, according to Discover, was still over 800.
Retention Line
If you are on the fence about whether a card is worth keeping and paying the annual fee, be sure to call up the bank’s retention department before making your decision. It’s been tough on credit card companies keeping customers lately since each bank keeps offering new products to gain more customers.
Before calling the bank, do a google search for “flyertalk (the bank) retention offers”. Flyertalk is a very large online forum for travel. There are many threads and specifically threads where data is collected for each credit card and what kind of offer people receive so you can know what to expect. There are also special tips and tricks for each bank.
For example, here is the thread for Chase credit cards. As you can see, the thread tells you when you call that you MUST ask if there are any offers on your account. And to not just ask for an annual fee waiver, just ask if they can credit your account the $95 (or whatever your annual fee is) to your account.
The thread also lists data points from other readers including when they called, what they were offered, how much they usually spend on the card and how long they’ve had the card.
Here is a similar thread for Citibank and one for American Express.
Downgrade
If you don’t like the retention offers and still want to cancel the credit card due to the annual fee, the representative may ask if you would like to downgrade the card to a version that has no annual fee. This can sometimes be beneficial to keep the transferrable type of points (Chase Ultimate Rewards, American Express Membership Rewards, Citi Thank You Points) from expiring. *There is an upcoming lesson on keeping miles and points from expiring.*
Need to Knows
- While I recommend that you should only apply for credit cards that you intend to keep long term, there are times when you may want to cancel a credit card (when a bank reduces a card’s benefits or your situation changes and you no longer find the ongoing benefits worth the annual fee).
- Call the bank’s retention department to check to see if they make any offers to keep you as a customer
- You can typically downgrade a credit card to one with no annual fee
