If you're on the fence about keeping your credit card, ask for a retention offer - you could get bonus points, a statement credit, or an annual fee waiver

Holly JohnsonFeb 14, 2020, 00:54 IST

The best travel rewards credit cards charge an annual fee - depending on the card, you could pay as much as $550 per year. However, some card issuers will extend retention offers that can waive this fee for a year. 
Some retention offers may also come in the form of extra bonus points. These additional points can help you recoup costs involved with paying the annual fee on your favorite card. 
Examples of retention offers include 30,000 points for keeping the Platinum Card® from American Express, and a $50 statement credit for keeping the Marriott Bonvoy Boundless Credit Card.
If your card's annual fee just posted, calling your card issuer is the best way to find out about retention offers that may be available to you.  
See Business Insider's list of the best rewards credit cards »

The best rewards and travel credit cards come with insanely valuable perks that extend far beyond the points and miles you can earn. Many come with travel benefits like airport lounge access or annual travel credits, and some come with consumer protections like purchase protection and extended warranties. When you add in the sign-up bonuses and ongoing rewards the top credit cards offer, it's easy to see why you might want to keep them in your wallet forever.

Unfortunately, most of the top rewards credit cards charge an annual fee, although many waive the fee for the first year. This means that, every year or at least after the first year, you'll have to decide whether to pay the fee on your card and renew.

Fortunately, credit card retention offers have the potential to change all of that. These offers sweeten the pot and make keeping your card a much better deal for an additional year at a time.

Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back.

What is a credit card retention offer?

A credit card retention offer is essentially an offer a credit card issuer extends to entice you into keeping your credit card for another year.

Card issuer retention offers change all the time, and there is no standard offer you should expect. The amount of spending you put on the given card can impact the type of retention offer you're offered - with people who spend larger amounts getting the most generous offers.

Types of retention offers you might receive from a card issuer include:

Bonus points: For example, you may be offered 10,000 bonus points worth $100 if you pay the $95 annual fee on your credit card and extend your membership for another year. While this still means you're paying the fee to keep your card open, the rewards you earn can help you recoup all or part of your costs.  In some cases, you'll be required to meet a minimum spending requirement to earn the bonus points.
Statement credits: Some card issuers have been known to offer statement credits that can cover the annual fee on your credit card, or at least part of the annual fee. This type of retention offer can effectively "cancel out" the annual fee on your credit card for the year.  
Annual fee waiver or reduction: Card issuers may even be willing to waive the annual fee on your credit card if you call in and ask, or at least waive part of the annual fee. This could be the best resolution to strive for since you can keep your credit card for another year without having to pay for the privilege.

Examples of credit card retention offers

Again, these offers change all the time, and just because someone else reported receiving an offer doesn't mean you're guaranteed to get it as well. Here are some retention offers reported by credit card users on the travel and rewards forum FlyerTalk.

American Express

The Platinum Card from American Express ($550 annual fee) - 30,000 Membership Rewards points or a $300 statement credit after you spend $4,000 in three months. The standard welcome offer for the card is 60,000 points after you spend $5,000 in the first three months.
American Express® Gold Card ($250 annual fee) - 15,000 points after you spend $2,000 in three months. The standard welcome offer for the card is 35,000 points after you spend $4,000 in the first three months.
The Business Platinum® Card from American Express ($595 annual fee) - 5,000 points, plus another 25,000 points after you spend $10,000 within 90 days. The standard welcome offer for the card is 50,000 points after you spend $10,000, and an extra 25,000 points after you spend an additional $10,000 in the first three months.

Chase

Southwest Rapid Rewards Plus Credit Card ($69 annual fee) - $70 statement credit for keeping the card. The standard welcome offer for this card is 40,000 points after you spend $1,000 in the first three months.
Marriott Bonvoy Boundless card ($95 annual fee) - $50 statement credit for keeping the card. The current welcome offer for this card is 100,000 points after you spend $5,000 in the first three months.
Southwest Rapid Rewards Priority Credit Card ($149 annual fee) - $70 statement credit for keeping the card. The standard welcome offer for this card is 40,000 points after you spend $1,000 in the first three months.

Citi

Citi® / AAdvantage® Executive World Elite™ Mastercard ($450 annual fee) - $100 statement credit for spending $3,000 each month for the next three months. The standard welcome offer for this card is 50,000 miles after you spend $5,000 in the first three months.
Citi Premier℠ Card ($95 annual fee) - $95 statement credit, plus 1,000 points for spending $1,000 each month for three consecutive months. The standard welcome offer for this card is 60,000 points after you spend $4,000 in the first three months.

How to ask for a card retention offer

By and large, credit card issuers do not make unsolicited retention offers when your annual fee is charged. To access credit card retention offers, you really do have to ask.

If you want to keep your favorite credit card without paying the annual fee, your best bet is calling the contact number on the back of your credit card after your annual fee posts to your account (but before your monthly payment is due).

Some credit card issuers, including American Express, have a dedicated retention offer department that handles this type of request. Others handle retention offer requests on a case-by-case basis, usually by checking their computer system for offers they may be able to extend to you. Either way, there are several ways to move this process along.

Here are some scripts you can start with:

"Hi, the annual fee just posted on my credit card and I'm thinking of closing my account. I'm wondering if there is any way to get the annual fee waived on my credit card for the year so I can keep it."
"The annual fee was just charged on my credit card and I'm wondering if you have any incentives you can offer that might make paying the fee a better deal. Can you help me?"
"Hi there. I am looking over my credit card account and I just noticed the annual fee posted for the year. I love this card due to all the benefits, but I'm not sure I can justify paying this fee right now. Do you have any retention benefits you can offer me?"

Any variation of these scripts will also work. The key is making sure you mention that you don't want to pay the annual fee on your card, but also be clear that you're open to keeping your card if you're given some sort of benefit in return.

When it comes to credit card retention offers, it's crucial to understand that you have to ask to get them - but the worst that can happen is the card issuer saying "no."

If you don't get a retention offer

Speaking of card issuers saying "no," this happens all the time. Not all card issuers make retention offers available to all of their customers, and some may limit them only to customers who spend a lot of money on their credit cards year after year.

Either way, you have a decision to make if you don't get the retention offer you were hoping for. You can:

Pay the annual fee on your credit card: This will require an out-of-pocket commitment, but your card's benefits may outweigh the fee. Make sure to consider how much cardholder perks and rewards are worth to you before you renew your credit card for another year.  
Cancel your credit card: If you feel the benefits and rewards don't justify the fee, you can always cancel your credit card. Before you do, make sure you redeem any rewards you have in your account that aren't held with a third-party loyalty program like a frequent flyer program or hotel rewards program. If you close your account with an active rewards balance, it's possible you'll forfeit your points.

There's no right or wrong answer here, but if you do opt to cancel a valuable credit card because you don't want to pay the annual fee, keep in mind that there are plenty of other rewards credit cards to consider with different annual fee requirements. Some offer large initial welcome bonuses that can make the annual fee well worth it the first year, and plenty of others waive their annual fees for the first 12 months.

See Business Insider's list of the best rewards credit cards »

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

Business Insider may receive a commission from The Points Guy Affiliate Network, but our reporting and recommendations are always independent and objective.

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

Cookies on the Business Insider India website