When I’m charged the annual fee for a credit card, I take time to think if I want to keep, downgrade or cancel the card. For me to keep the card and pay the fee, without having any guilt, the benefits I receive have to be worth more than I’m paying for the card. Those benefits may come in the ability to earn points that allow Sharon and I to go on amazing trips around the world. A card might also provide certain savings on travel like getting a free checked bag with an airline or free WiFi when staying at a hotel. There also also cards that make our travel more comfortable by giving us access to airport lounges or room and car upgrades, like the SUV we received when we rented a base sedan from Sixt.
I’m not a computer programmer, but the equation is a simple one
- If card benefits > cost, then keep card
- If card benefits < cost, then cancel card
But what happens if when I go to cancel a card, the bank does something to alter the calculations? That’s how retention offers work.
What’s a retention offer?
When you call to cancel the card, if the bank wants to keep you (and who knows how they figure that out nowadays) they will transfer you to a “specialist, who will usually try to do two things. First they’ll remind you of all the card benefits. Hopefully, if you put thought into cancelling the card, you already knew all of this. After listening to the pitch, if you still say you want to cancel they might throw in some extras:
- Some banks will just straight off waive (or issue a credit equal to) the annual fee
- You might be offered a statement credit for using the card a certain number of times or spending a certain amount in a fixed amount of time. For example, they might offer you $100 if you spend $1000 per month for 3 months or $500 if you use the card 10 times in the next month
- You might get an offer for bonus points. This could be just to keep the card or as a benefit for spending a certain amount.
These offers will either reduce the cost of keeping the card, often to zero, or provide enough points to make the benefits outweigh the annual fee.
A little over a year ago, I realized that I was paying a whole bunch of money in annual fees for credit cards. Most of the cards cost under $100 and had benefits I liked, but I was spending close to $2000 between Sharon’s and my accounts. I had to look closer and determine not only if the benefits were worth the fees but if we were taking advantage of the benefits. I decided to call the bank for each card that was not a slam dunk keeper, meaning I didn’t call on a card like my $49 IHG Select which gives a free night certificate or the no-annual fee Disney Visa card. Getting Sharon to agree to the plan was a diplomatic discussion where I reminded of her of all the travel perks we get and she’d only have to make a call when I was pretty sure of the outcome ahead of time.
A year of calling for retention offers
Here are the results of our calls over the last year:
Chase didn’t offer any retention offer on this card. We hadn’t used it very much in the last year so I wasn’t surprised. We decided to keep the card so Sharon would still be able to transfer Ultimate Rewards to my account.
Citi came up with a really good offer for us to keep the card. We’d get a $50 credit every month we spent $1500 or more for the next nine months. So if we received the bonus every month, we’d earn $450 in credits which is equal to the annual fee for the card. Since the card offers a $250 airline credit and has the fourth hotel night free benefit, this was a great deal. With the changes coming to the card next year, I’m glad we kept it.
This is our go-to card for grocery spending and Sharon’s main card so I wasn’t thinking about canceling it. However, the card has a $95 annual fee so it couldn’t hurt to see if AMEX would give us anything to keep it.
They offered 2,500 Membership Rewards points right away and an additional 5,000 points after spending $1,000 within 90 days. 7,500 Membership Rewards points is worth at least $150 to us so it more than covered the annual fee.
AMEX Business Green Card
I don’t really talk about this card much. I hardly ever use it because it only earns one Membership Rewards point per dollar spent. I have it because it was originally a Business Gold card that I upgraded to a Platinum for a bonus offer and then downgraded to the Green card.
I would have no problem about cancelling the card so I called to see if they could do something to offset the $95 annual fee. It took a while but the retention specialist finally offered me 7,500 Membership Rewards points if I didn’t cancel the card. He also told me that I should really look into getting the Blue Business Plus* because it earns 2x points on all purchases and has no annual fee.
*Bonus points to him for that tip; it’s a great card to have.
I called for a retention offer on this card and I had a really strong case. AMEX had already announced the changes to the card and it would no longer be a great card for otherwise non-bonused spending. SPG points were worth over 2 cents each (more like three cents) but once the program merged with Marriott Rewards, the card would earn 2 Marriott points, a 33% devaluation. Chase also offers a Marriott card that earns the same points, so AMEX needed to offer something to keep me.
They immediately offered me 7,000 SPG points if I spent $1,000 on the card in the next three months.
Barclays American Airlines Aviator Red
This is another card I kept but didn’t really use. I’ve had it since it was an US Airways card and kept it open because I’d get a 10% rebate on award bookings, free checked bag and preferred boarding. Problem was, we don’t fly American that often, and when we did, I was using Avios I earned from the British Airways card so I wasn’t getting any of the 10% rebate.
For the last several years, when I called Barclays at renewal they immediately waived the annual fee but not this year. They didn’t offer me anything. I went ahead and cancelled the card. Getting approved for a Barclays card is hard if you don’t have a history with them but I wasn’t worried because I had just applied for the JetBlue Plus card so I’d still have an ongoing account.
I’m not going crazy, Sharon and I both have the SPG AMEX card. Since I received an offer when I called, I had Sharon call when her card was up for renewal. She received a better deal than I did, 7,000 SPG points after spending $500 in three months. Done!
Starwood Preferred Guest Business American Express
I guess we were pressing our luck a bit with AMEX and the SPG retention bonuses. Of all the cards, the business one was the card I was willing to let go. Starting in 2019, you’d no longer get to stack the night credits from the business and personal cards and the business card lost lounge access at Sheraton hotels.
Amex didn’t offer any retention on this card, even mentioning that we just received offers on the personal card. Cancelled card.
Since Chase can be really picky about their business cards and we had to convince them to approve us for this card the year before, I decided it would be best just to pay the $99 annual fee for the first renewal and not shake the hornet’s nest.
In doing my research before I called, I saw that Chase wasn’t currently offering any retention offers on the Sapphire Reserve. I decided to save some time and didn’t bother calling.
While not the first card I use, the Citi Premier is a good card and my primary card for gas purchases. It does have a $95 annual fee but I didn’t want to cancel it because that would be one of the things to reset the Citi 24 month clock for getting another Thank You card sign up bonus.
The offer wasn’t great; a $95 statement credit if I spent $3,000 in 3 months. Since I wasn’t going to cancel anyway, I took the offer. Spending $3,000 for $95 isn’t a great return as I could just sign up for another card and get at least $500 – $750 in points but you do what you have to do.
I’m not going to spend too much time talking about this one, as I’ve already written a whole article about how I cancelled the card this year. One thing I didn’t mention was that AMEX offered me absolutely nothing to keep the card, they just kept telling me all of the credits the card offers. If I have to spend money to make back the money I already spent, I’m not saving anything. I’m just breaking even.
I also followed through on my promise and cancelled the United MileagePlus Explorer card. For this one we didn’t even check to see if they’d give us an offer and cancelled it by secure message on Chase’s website. No need keeping a card from an airline we won’t fly on.
For most of the calls I made over the last year, I had a pretty good idea of what offers were out there before I called. I suggest checking out FlyerTalk’s message boards to see if it’s even worth it to ask for an offer before calling. Here are links to the retention offer threads for the main banks. The wikis at the top of the pages are usually current but you may have to click to the end of the posts to see the most recent offers.
Were all those phone calls worth it? On the surface, obviously I received several offers of extra points and statement credits just for calling and asking. I’m not one who likes to talk on the phone (and Sharon even less so) so I’d usually put the calls off until the last minute. From now on, I think I’m going to save the calls on cards that are really on the fence and I’m going to cancel the card if I don’t receive an offer. That way I can be really honest when I say that I’m thinking about getting rid of the card if there’s no way they can make it more valuable.
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This post first appeared on Your Mileage May Vary