Nobody likes paying an annual fee to use a credit card, but many of the top reward cards require it. But what if there was a way to keep your account while having your annual fee waived? In fact, many cardholders have been successful in doing just that. Do you want to join them? Here’s how:
1. Wait for the best offers. Avoiding annual fees starts the moment you apply for a card. Some cards with annual fees will feature offers that waive these fees for one year for new applicants.
2. Look for a card with a generous sign-up bonus. Annual fees are no fun, but be sure to put them in context. For example, Chase is currently offering their Southwest Airlines Rapid Rewards Plus Visa card with a $69 annual fee. But consider that new cardholders earn 50,000 points after spending $2,000 on their card within two months. Since these points are worth over $800, the annual fee is a trivial expense by comparison.
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3. Negotiate your fee when it comes time to renew your card. Many credit card users do not realize that these fees are not set in stone. Banks spend hundreds of dollar in advertising and marketing costs to acquire each customer, and they don’t want to lose your business over an annual fee. So before you accept this fee, contact your bank and ask them to waive it. Mention that you are considering cancelling your account and using a competing card, and you will likely be transferred to another department that specializes in making offers that will retain existing customers.
Ideally, the bank will waive its annual fee, but there are a few other possibilities. In some cases, the bank will refund a portion of the fees, while others may offer you some amount of reward points or miles to retain your business.
4. Cancel your card. If your bank refuses
to negotiate on your annual fee, you can always just call their bluff and cancel your card. Then you can actually try a competing product with a waived annual fee or no fee at all. But if you still miss your old card, don’t worry. The bank will happily welcome you back with another sign-up bonus, so long as you wait about 12-18 months.
While it is tempting to imagine that annual fees are an inescapable part of some reward credit cards, there are ways around paying them. By employing all of these techniques to avoid these fees, you can earn plenty of rewards without paying the price.
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Note: It's important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.
Jason Steele has been writing about credit cards and personal finance since 2008, poring through the terms and conditions of credit card agreements to understand the minutiae of how these products work. His work has appeared on Yahoo, MSN, HuffingtonPost and other major news outlets. In his free time, Jason's a commercial pilot. He graduated from the University of Delaware with a degree in History. More by Jason Steele
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