Opinion: Why You Should Always Ask for a Credit Card Retention Offer
When you first sign up for a credit card and get it approved, it feels great. You have a premium credit card that is made out of metal and it comes with a lucrative sign-up bonus and perks and you earn valuable rewards on purchases. However, after a year of card ownership, you now have an annual fee to pay. Depending on how premium the card is, the annual fee can be quite expensive. For example, while the annual fee for the Capital One Venture X card costs $395, the AMEX Platinum card costs $695 annually.
Keep, Cancel, or Ask for a Retention Offer
You knew about the annual fee when you signed up for the card, but you may be questioning the card ownership after seeing the annual fee posted on your account. What should you do in this case? Normally, people either cancel or keep the card. However, canceling a credit card will diminish your overall credit line and may lower your credit score since it will increase your utilization rate. The cancellation will also reduce the length of your credit history, which can also lower your credit score. You can keep the card, but what if there is a better way so that you can keep the card but either not pay or pay significantly less for the same card?
A retention offer may entice you to keep your credit card for another year by saving you money.
What Is a Retention Offer?
Though it will depend on the person’s portfolio, there is a chance that the credit card issuer may lower your annual fee for a year or even waive it. It’s called a retention offer. A retention offer is a points/statement credit offer that is given to a credit card holder as a courtesy to keep the credit card for another year. The issuer may give you points or statement credit after you meet a spending requirement (i.e. spending $2,000 in 30 days to receive $200 as a statement credit) or may simply waive the annual fee for one year. Since a retention offer is a temporary offer, if you decide to accept the offer, you will have to talk to customer service again after a year when the annual fee posts again.
For AMEX credit cards, you can even ask for a retention offer using the issuer’s chat system in the app.
What Is the Process & When Should You Ask for It?
Each credit card issuer may have a different process for it, but in general, you would call the credit card’s customer service department on the back of your card, and explain that you are thinking about canceling the card. Then, you express that you would like to keep the card and ask for a retention offer. The customer representative will likely ask you about the perks of the card or your spending patterns with the card to justify why you should keep the card for another year. Be reasonable and be patient and answer honestly why you don’t see much value in keeping the card. Then, the representative may give you an offer or may not give you an offer. Because we cannot see or have insights on the algorithms for retention offers, be ready to either accept or reject it when the offer is given to you. This means, that once you hang up the phone, the offer you just received may not come back to you. For that reason, I highly recommend doing some research on your own and searching for what other people have received. Because everyone is different, it can be challenging to get realistic answers, but it is important to set your expectations and be responsive when given an option. If you are not satisfied with a retention offer, you don’t have to accept it, and you can reach out again later. A new customer service agent may offer you a better offer or he/she may not give you a retention offer at all. Also, you should ask for a retention offer after the annual fee posts on to your account. If you try to cancel it during the first year of your membership, the issuer will not give you an offer and it will be a big red flag if you cancel the card before your card anniversary hits since it can be viewed as abuse.
A retention offer may significantly lower the hefty price tag of your AMEX Business Platinum card.
My Experience with Retention Offers
For instance, when I recently had a conversation with AMEX regarding my AMEX Business Platinum card’s $595 annual fee, I told the customer service agent that I don’t value the $400 annual Dell credit at 100% since I usually force myself to buy something that I do not need. I also added that the $200 airline credit is difficult to use since I have status with airlines that fly out of my home airport, and I cannot value it at face value. After a minute or two, the representative came back to me and offered me $595 instantly for keeping the card for another year. That is $595 I was able to save by simply dialing the number on the back of my card and asking for a retention offer. It is not always this successful.
I recently received a full retention offer for my AMEX Business Platinum card, saving $595.
If you’d like to apply for the American Express Platinum Business Card, please consider using my referral link. It will continue to help fund my blog operations and help visitors make informed decisions to maximize their rewards. Thank you! http://refer.amex.us/EDWARS5hSy?XLINK=MYCP
The AMEX Bonvoy Brilliant card has an annual fee of $450, but it is one of my long-term keeper cards because I receive outsized values from its $300 hotel credit and free night certificate. I stay at hotels frequently, so the $300 credit is a pre-paid amount for my future travel needs. The free night certificate is capped at 50,000 Marriott Bonvoy points, and you can score some sweet deals depending on the time and location of your trip. Even though I plan on keeping this high annual fee credit card for the foreseeable future, I still ask for a retention offer. Last year, I received $100 by spending $1,250 in 3 months. The retention offer was not as good as the one I received for the AMEX Platinum Business card, but it reduced the annual fee to $350. Subtracting the $300 hotel credit, I can argue that I received a free night certificate for $50.
The Bonvoy Brilliant comes with great benefits that can substantially offset its annual fee. Photo credit: www.americanexpress.com
If you’d like to apply for the American Express Marriott Bonvoy Brilliant Card, please consider using my referral link. It will continue to help fund my blog operations and help visitors make informed decisions to maximize their rewards. Thank you! http://refer.amex.us/EDWARSwdXp?xl=cp01
Premium credit cards often have hefty price tags. If you have multiple premium credit cards, it can be challenging to justify the price of owning premium credit cards. Other than swallowing the same high price or canceling the card which may negatively affect your credit score, you should always ask for a retention offer. It may significantly offset the annual fee or even waive it entirely. Since it is a temporary offer, before you ask for a retention offer, make sure to do your own research and set realistic expectations. Of course, a retention offer is subjective to a credit cardholder, and you may not qualify for it. However, whether you qualify for a retention offer or not, I highly recommend you ask for one. At the end of the day, you may get to keep enjoying benefits and perks for another year at a discounted price or even for free!
