How to avoid paying your credit card annual fee

We at WenneTravel often get questions from readers nervous about their upcoming credit card annual fee. This is understandable. Nearly all cards with reasonable signup bonuses also come with an annual fee by the second year. But that doesn’t mean you should just pay it. Oftentimes credit card companies are willing to waive the annual fee if you’re a good customer, and sometimes even if you’re not. Personally, I have yet to pay a second-year annual fee on a card that waived it the first year. Here is my step-by-step guide to not paying annual fees:

The timing

If you’re going to try to get your annual fee waived, it’s best to wait. You don’t want to try too early. You also don’t want to try too late. Make sure to do it before your fee actually hits. So my recommendation is to wait until the 10^th month of your card year. Then you call up the credit card company. This way you look proactive but not like you’re trolling for a fee waiver.

The approach

Telling the credit card company you are going to “cancel or else” is not the right approach. After all, a phone agent is a person too. They’re not going to take kindly to threats. The best approach, in my opinion, is to call up the credit card company and tell them:

1. You like this card
2. You don’t want to pay the annual fee
3. Is there anything they can do in terms of waiving it?

If they say yes, they’ll make you an offer to waive the fee or give you bonus miles/points or something of that nature. If they say no, then you can ask to cancel it. They may make you an offer once you ask to cancel. Even if they make you an offer, you don’t have to take it. You can always cancel the card.

If you have to cancel…

Don’t just cancel the card outright. Ask the credit card company if you can transfer your credit line to another card you have with them. This way you don’t lose any of that “total credit line” that is important to your credit score. And that way you also have more leverage later if you aren’t approved for a new card, as you can ask the company to transfer some line from an existing card.

WenneTravel success story

My Citi AAdvantage Visa’s annual fee is coming up in June, so I called Citi last month to ask them if they would consider waiving the annual fee. They did me one better. Not only did they offer me a statement credit worth exactly the amount of my annual fee (how convenient!), they also gave me a bonus offer. For every month I spend $1,000 on the card, I’ll earn 1,000 extra bonus points. This offer is good for 16 months, so I can earn as many as 16,000 extra AA miles. I’ve already taken advantage of this for this month, and plan on doing so 15 more times!