While credit cards with annual fees can be worth it due to the rewards and perks they offer, that doesn’t mean your needs can’t change over time. Perhaps you want to switch up your rewards and earn travel points instead of cash back, or maybe you want to have travel benefits you haven’t had in the past (e.g. free checked bags or hotel elite status). Maybe you used to travel often for work and enjoyed benefits like airport lounge access, but now you’re retired and want a credit card with no annual fee.
If you decide to call your credit card issuer to cancel or downgrade your card, you may be enticed to change your mind with a credit card retention offer. These offers vary and not everyone can qualify, but they often come in the form of bonus points or statement credits on your account.
How credit card retention offers work
Hypothetically, let’s say you have card_name discontinued_disclaimer (annual_fees annual fee; See Rates and Fees) but feel you can no longer justify the cost. You call American Express to cancel the card and they offer you a statement credit if you maintain your card membership.
When a card issuer mentions a credit card retention offer, they are typically hoping you will pay the annual fee on your card for another year in exchange for an added benefit. They may also offer to waive all or part of the annual fee for one year. It’s up to you to decide if the retention offer is valuable enough to keep the card.
Also be aware that you can take the reins when it comes to credit card retention offers and ask for one. Most cardholders do this when the annual fee posts on their card statement for another year, since this timing gives them more leverage for negotiation.
You can wait for the annual fee to be posted on your card, then call your card issuer using the number on the back of your credit card or reach out for assistance via online chat. In either case, you would tell the representative you are thinking of closing your account but aren’t entirely sure if you want to. This opens the door to your card issuer seeing what they can do on their end, which may include the offer of a statement credit or some points if you decide to keep the card after all.
Types of credit card retention offers
All credit card issuers handle retention offers differently, and offers you receive (or don’t receive) may be based on your use of a card. The more you spend on a card on a regular basis, the more likely you are to get a generous retention offer if you threaten to cancel or downgrade.
Some credit card retention offers also require you to spend more money on a card to qualify. For example, one user on Reddit recently shared a retention offer they received that required a minimum spending requirement:
“Bank of America gave me a pretty nice retention offer on the Alaska card. $175 statement credit for $1500 spent in 3 months. That basically covered this last year’s annual fee and I’m going to close the card next month and essentially pocket the $80.” – rickayyy
Another user on Reddit with the Platinum Card® from American Express said they were offered points in place of a statement credit when they said they would cancel the card.
“I’ve had the card for 1 year and my annual fee just posted. Chatted with a rep and asked for a retention offer and he was able to offer $695 statement credit using 69,500 points. He stated the credit is usually 115,833 points.” – gck0124
These examples from Reddit show how a redemption offer can work, but offers have the potential to be different for every cardholder or completely nonexistent. Are credit card retention offers worth it? If a card issuer offers you benefits for keeping a card and the rewards for not canceling are significant enough, then yes.
What if I don’t get a retention offer?
If you call or chat with your card issuer and threaten to cancel but you’re not offered anything in return, you can always try the HUCA (hang up, call back) method to see if the process works differently the next time around. If that doesn’t work, you will need to decide if the credit card’s annual fee is worth paying.
At this point, your options include:
- Paying the annual fee on the card for another year: Decide if a card’s perks and rewards are worth it for another year without a retention offer. If they are, you can decide to pay the annual fee and maintain membership for another 12 months.
- Inquiring about downgrading the card: See if the card issuer offers a no-annual-fee card you can downgrade to. This option would let you maintain the credit history associated with the previous card, but you would miss out on the new cardmember bonus for the card you downgrade to.
- Cancelling the card: If you decide the annual fee isn’t worth paying without a retention offer, you can cancel the card. This move has the potential to hurt your credit score since canceling an account can decrease the average age of your credit history and cause your credit utilization ratio to increase.
➤ SEE MORE:Are credit cards with annual fees worth it?
Bottom line
If the benefits of keeping your credit card open don’t seem worth it, you can inquire about a credit card retention offer. This offer may come in the form of cash back, bonus points or a waived annual fee, but this can depend on the card issuer and how often you used the card in the past.
If you don’t feel the retention offer is valuable enough — or you’re not offered anything at all — you can decide whether to keep the card, downgrade to a no-annual-fee card or cancel the account altogether. In some cases, cancelling the card you no longer want and signing up for a new one with a generous sign-up bonus, lucrative rewards and the perks you want to have can make the most sense.
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