Ideally, a credit card offers the rewards and benefits you’re seeking at little to no cost. According to a 2017 Experian credit card survey, 54% of consumers look for cards with no annual fee, but 45% of respondents also want a card that offers rewards.
Although there are rewards credit cards on the market that don’t impose an annual fee, some of the most competitive rewards cards charge annual fees, which can be as high as $550.
But there’s a chance you can have it both ways if you:
- Just ask
- Leverage your loyalty
- Inquire about specific card use
- Compare offers
- Call to cancel your account
5 Ways to Get Your Credit Card’s Annual Fee Waived
Although you’re never guaranteed to have your account’s annual fee waived, some experts have had success with a few strategies.
Just ask. When reaching out to your card issuer, simply state that you’d like to have your credit card annual fee waived. Ask if the representative can help you with your request and leave it at that.
“It helps to be nice,” says Rachel Richards, a former financial advisor and author of the book “Money Honey.” “These reps deal with angry people calling all day. Sometimes it’s refreshing for them to hear someone more pleasant, which in turn makes them more willing to help.”
Leverage your loyalty. If asking point-blank doesn’t work, move on to this next approach: Justify why you deserve to have your annual fee waived. Mainly, this tactic showcases that you’re an ideal cardholder who the company wants to retain.
“Give reasons why you’re asking for (the waiver),” says Allan Liwanag, founder of the personal finance blog The Practical Saver. “Tell them how their cards are valuable to you.”
Whether you’ve been an active user for many years or it’s your go-to credit card, explain why you’ve earned a pass. Your activity, including regular use and on-time payments, might be enough to waive the annual fee for the year.
Inquire about specific card use. A credit card issuer might be more willing to waive your annual fee if you do something for it in return.
“When I asked for a waiver, my credit card company told me that if I spent $150 or more in the next 30 days, then it would give me a credit equal to the upcoming annual fee,” says Liwanag. “Because I was using it consistently, I was able to spend over $150 easily and got my credit.”
Before following through on this type of offer, make sure you can afford the conditions. For example, don’t put additional charges on your card to meet a purchase requirement for a waiver if you can’t pay off the balance in full. Getting hit by interest charges eats into the savings you’d receive from waived annual fees.
Compare offers. Doing research about your card’s competitors ahead of time might help in your negotiations.
See whether there are competing offers for a zero-annual-fee card, a lower-annual-fee card or even a card that waives the annual fee for the first year of a new account. If the competing card has similar benefits as your current card, mention it during your call.
Briefly describe the offer from the other company and note that you plan to open an account with another issuer if the annual fee can’t be waived. There’s no guarantee your issuer will relent, but it’s worth a shot, especially if you have another viable credit card alternative lined up.
Call to cancel your account. If you’re on the fence about even keeping the card, let your issuer know that.
Clint Proctor, founder of the personal finance website The Wallet Wise Guy, did just this when his card’s $69 annual fee approached its renewal.
“The first time I was able to get a credit card’s annual fee waived, it happened by accident,” says Proctor. “I actually was calling to cancel the card before the annual fee hit. But the customer service representative offered to waive the annual fee to get me to stay as a cardholder.”
Since that fortuitous call, he’s repeated the same process twice. But Proctor warns that you should be fully prepared to close the account when trying this approach.
“There’s been plenty of times that I’ve called to cancel cards and wasn’t extended any offer whatsoever,” says Proctor. “It’s a bit of a roll of the dice.”
Other Options If You’re Unsuccessful
Depending on which credit card you have, annual fees can really dig at your finances. But there are alternatives to consider if your card issuer won’t budge on waiving your annual fee.
Pay the fee using your rewards. You’ve likely spent a good amount of money to earn the rewards points on your account. But those points might come in handy if you desperately don’t want to spend additional cash on the annual fee. For example, if you can apply cash back or a statement credit to your account, you could cover the fee if you have enough rewards built up.
Convert to another credit card. Not all credit cards are worth the energy in negotiating the annual fee. If your issuer has another card product worth switching to, consider downgrading to avoid the fee. To decide if this approach makes sense for you, assess which of your card’s benefits you actually use and whether the card is truly offering you value.
Riley Adams, a Louisiana CPA and founder of the personal finance blog Young and the Invested, performed a purge of his many credit card accounts after using them to build his credit early in his career.
He successfully got the annual fee on an airline co-branded card waived two years in a row. However, he realized that he rarely used the card and didn’t feel it was worth the effort to waive the annual fee another year.
Instead, he asked the issuer to convert the account from an airline co-branded card to a standard one without an annual fee. Although he lost the ability to earn miles directly with the airline, it actually worked out in his favor by widening his flight options when traveling between school and home.
To further his savings on annual fees, he continued converting other low-value cards to no-fee credit cards. He was able to get a credit increase along the way, which helped his credit score.
Open a different credit card. Your final option is to move on from your annual-fee card. You can consider the research you’ve done on competing cards and search for a card with no annual fee but with the basic benefits you need.
If there’s an available promotion that waives the annual fee for the first year, for example, weigh the pros and cons of the card’s benefits and rewards structure, and whether it’s worthwhile to pay the annual fee once the promotion period expires.
Of course, you can always try your luck negotiating to have the annual fee on the new card waived, if you’re up to the task.