How To Avoid Annual Credit Card Fees – A Simple Trick
This time I will post with two basic assumptions:
1. people use credit cards with benefits (cash back, free miles, points, etc. ..)
2. people do not enjoy paying the annual credit card fee.
Let’s admit, buying things on credit is great – you do not pay for it on the spot, sometimes you get up to 60 days for paying the bill and unfortunately, if you are an irresponsible spender you can use it to buy things, you really cannot even afford 🙂
It’s definitely better to buy things with credit cards that reward you with extra bonuses. Personally, I own four different credit cards – the Citi® / AAdvantage® Platinum Select® MasterCard®, the Chase United MileagePlus® Explorer Card, the Chase Marriott Rewards® Premier Credit Card, and the Chase Freedom® Card.
“Danielle, why so many credit cards?” you can ask for.
First off, I’ll mention the Chase Freedom® Card because it has no annual fee.
You can get cash back via direct deposit to most US checking or savings accounts starting at $20 for 2,000 points. Or, redeem your points for a statement credit for anything you’ve bought with your card with Ultimate Rewards. You’ll always get at least one point per dollar with this card, no matter how you use it. But there are very simple ways to earn up to 10 extra points per dollar spent. In fact, you can earn up to 10 extra points per dollar when you shop online at top retailers, like Best Buy®, Lowe’s, Macy’s, and more. You can also activate quarterly bonus categories and you’ll get 5% cash back on up to $1,500 spent in those categories that quarter, plus unlimited 1% cash back on all other purchases—no activation required. For example, I always shop online with this at Best Buy®, and I got 10000 points for $1000 spent or in other words $100 back. Not bad indeed.
Now let’s see my other three cards, each of which unfortunately has an annual cost. Let’s say that, annual fees are a silly thing. We all know that credit card companies already get a cut of each purchase you do, and we also know they make most of their money from the absurd charges on overdue payments. So why the stupid annual fees? They are already making plenty of money any time you use their plastic. I think that they could say they do that to weed fees from those who will simply apply for the card and not use it, but then why not set a minimum annual amount, which, once exceeded, results in the abolition of the annual fee?
My Citi® / AAdvantage® Platinum Select® MasterCard® charges $95. Luckily this fee is waived for the first 12 months only. I can take that. The Chase Marriott Rewards® Premier Credit Card charges a $0 Intro Annual Fee for the first year, then $85 per year. The Chase United MileagePlus® Explorer Card charges $0 Intro Annual Fee for the first year. After that $95. $95!?? What’s the point? Well, regardless of whether there is a point, I simply refuse to pay these fees … and now I want to teach you how to get rid of them too.
First, some assumptions …
One, you must have good credit and pay your credit card bill on time. Although it is no secret that credit card companies ABSOLUTELY LOVE IT when you do not pay on time (so they can charge you ridiculous fees), they’ll pretend that they would prefer customers with good credit when it best suits them. Trying to get your annual fee waived is one of those instances.
Secondly, you should have a backup credit card or be prepared to go without a credit card. You can’t easily bluff with these companies and in many cases, you simply have to cancel the card eventually. Do not go back on your threat to cancel, if they do not return the annual fee, just quit.
So now we are ready to work.
For starters, when you sign up for a new card, write down the registration date, somewhere where you can find it later – this will allow you to be prepared for the time that the annual fee is going to hit you. Almost all the major card companies waive the annual fee the first year, basically expecting you to sleep on the extension after 12 months, when, quite unremarkably, you see displayed the fee on the monthly report. Credit card companies certainly will not alert on the annual fee, it’s your job to stay awake here.
After 12 months here is the annual fee of $50/ $80 / $90 / $ 1,000,000. Now it’s time to act. Call the company and tell them you have just seen an annual fee for their card on your monthly statement. You do not like that. In fact, you do not even understand why they charge a yearly fee for your card while your other card _________ (Insert the name of the card with no annual fee here, does not really matter if you actually have this card or not … for me, is the Chase Freedom) does not require anything, why should this one? In addition, you say you got tens of proposals by e-mail about various other similar credit cards, offering amazing incentives (20,000 miles after first purchase, 20,000 points for hotel booking, etc. ..), The more examples you make, the better it is. The idea of the simple existence of competition always hurts.
So make it clear that there is indeed no reason for you to keep this card when you could subscribe to a new one, and get all these benefits. Now it’s time to drop the bomb – ‘or you waive the annual fee, or I’m going to cancel this card!‘
What happens next is usually one of the following. The first scenario is the person on the phone will search for your account, will notice that you use the card regularly and always pay on time, and will offer to send you a certificate by mail, which is good for a credit equal to the amount of the card annual fee. Provided you have to pay the fee of $95 ahead, wait for the certificate to arrive by mail, fill and sign it, and mail it back. You have just fought against a big bad credit institution :), AND WON!!!
Scenario two – the person will say that although they understand your rejection of the annual fee, there is nothing they can do. Then they ask if you would like to be transferred to the cancellation department to which you reply, “Yes, please.” Time to call the bluff. At the “cancellation department,” you just repeat your story and the desire to have your annual fee canceled. Again, one of the two things will happen. Under normal circumstances, the representative will suggest the certificate be mailed in return for the annual fee.
“But what if they refuse to reimburse my wages?” You ask. Simple. CANCEL. There are really tens of other cards you can have.
This is where having another credit card comes into play. In fact, you cannot win this game … but you have a backup. Once Chase did not refund my annual fee, I canceled the card. And you know what? A month later, I got junk mail from the same company for the same card, offering 20,000 United Miles after my first purchase and no annual fee for the first year. So I just signed again.
So far, in my experience, using this simple trick works. There is absolutely no reason to pay the annual fee for any credit card. Credit card companies certainly are not starving for money, so why give them more? These companies make a lot of money out of fools’ annual fees, but it is time for consumers to fight back!