Credit card benefits and sign-up bonuses immensely help elevate your travels – whether that’s the lounge access benefit or a huge sign-up bonus which you can use to fly international First or Business Class, some credit cards are a must for those who travel. Generally speaking, the higher the annual fee is, the more benefits are attached to the card; sometimes if you use all of the credits and benefits associated with the card, you can actually profit from the card. For example, some credit cards offer over $1,200 in credits each year alone – not factoring in the additional travel benefits such as worldwide lounge access… all for an annual fee of around $700.
Waived or Reduced Credit Card Annual Fee
When an annual fee posts to your account, you usually have 30 days (depending on the bank) to make a decision about whether or not you want to keep or cancel the card; if you make a decision after 30 days, you can still cancel your card and close your account, but you likely won’t get the fee back. When the fee posts to your account it makes sense to call the bank and ask what your options are if you don’t want to pay the annual fee. Banks love keeping loyal customers and therefore if you’ve had the card for a while and have spent quite a bit of money on it, chances are that your bank may be willing to waive or significantly reduce (post a statement credit) your annual fee for that year.
Bonus Miles/Points for Keeping Credit Card
If your card earns frequent flyer miles, hotel points, or transferable bank points, then instead of an annual fee waiver or reduction, you may instead receive bonus points or miles for keeping the card open – however, you will have to still pay the annual fee. Not only that, but sometimes a spend requirement may be attached to your bonus. For example, say your card’s annual fee is $550 and you call your bank about your options – they mention that they can’t waive or reduce the fee, but they can offer you X number of points after you spend X amount of money in X months. In cases like this, you should consider what they are offering and decide if those bonus points are worth paying the $550 annual fee. Keep in mind, you might have to spend a certain amount to get this bonus.
Card Downgrade / Product Change
Yet another option if you do not wish to pay your annual fee (and the bank doesn’t provide a waiver/reduction or bonus points) is a card downgrade, also known as a product change. Your card must be part of a bigger “family” of cards for this option to work. For example, if your bank offers different credit cards which earn miles with different airlines, you can’t switch from one airline card to another; however, if your credit card earns transferable bank points and there’s multiple types of cards that earn these points, you should be able to switch to a different card within the same family that earns the same type of points – and this other card may have a lower annual fee. Just remember to do this within 30 days after your fee is billed, otherwise it may not be possible for you to get your money back if you decide to change to a card with a lower annual fee.
No Bonus Points or AF Waiver?
No matter how loyal you are or how much you spend on your card, sometimes, you just won’t have any offers available – basically, you can pay the annual fee to keep your card open or you can close your card and not pay the fee. If you have tried calling and asking and still haven’t gotten any annual fee waivers/reductions, bonus points, or have a card downgrade option, make sure you carefully review your card’s benefits and then decide for yourself if the card is worth keeping and paying the annual fee. If it’s a travel card offering a ton of different benefits, then perhaps it may be worth holding on to – just review how many of the card’s benefits you have used during the past year and what credits you have gotten and think about your future travel plans and when you might use the various benefits and credits that come with your card.
All in All
Travel credit cards are awesome – there’s just so much value they provide for the annual fee; you can even come out ahead if you use up all of the credits and perks offered. Sometimes it is important to review how much of the benefits you have used in the past year and whether or not it makes sense holding onto the card and paying the fee. If you have maximized the benefits and credits, then it is probably worth keeping the card – however, if you have barely used them, then perhaps it might not make sense to have the account open and pay the fee. Each traveler is unique and uses credit cards differently so there isn’t a “one size fits all” strategy so be sure to understand your options and card benefits before making a decision regarding your card.