They'll Pay You To Stay (Credit Card Edition)
Before Cancelling A Credit Card, See What They'll Offer You to Stay. Potential Savings: $100+. Difficulty Level: Low
Welcome to Saving Money with Andrew!
A recurring money-saving theme is to politely but firmly ask for a discount. As discussed in my post on saving on your cable bill, sometimes a brief phone call can yield hundreds in savings.
This often works with credit cards as well. If you are considering cancelling a credit card and switching to a new one, try this first:
Call your credit card company’s customer service line (check the back of your credit card)
Explain why you are dissatisfied with your current card (annual fee too high, rewards too low, etc), that you are considering another card, and ask if there are any offers available to stay with your card
More than half the time, they will offer you something to stay, most commonly waiving an annual fee or offering you a significant bonus
These offers vary greatly, but here’s one example. Last month, I called to cancel an American Express with a high annual fee (which I had opened because of a signup bonus and other perks). Foolishly, I had forgotten to cancel it before the one-year anniversary, so I had a $550 fee on my statement. I politely explained that I didn’t like the high annual fee and wanted to cancel the account. Not only did the representative immediately refund me the annual fee and waived it for the year,[1] but they offered me a significant points incentive (worth $150) if I would continue using the card and spend another $3000 in the next 3 months.
This incredible thread chronicles various retention offer results across many Chase credit cards (there are threads for other cards, just Google your card name and “retention offers”), and can at least give you a sense of whether an offer might be available. There are even some people out there who make requesting these retention offers a habit, calling every few months to ask for one. That’s a bit much for me, but it’s a no-brainer to at least try this every time you are considering cancelling a card.
I hope this has been helpful. If you liked it, please share it with a friend! Also, please send me your feedback, requests, and success stories.
[1] Useful fact - American Express will also refund your annual fee if you cancel a card within 30 days of the fee being charged. Many other card issuers will do this too.