How and When to Ask for a Credit Card Retention Offer

If you’re like many people in the miles and points world, you may have quite the collection of credit cards. Many times when talking with others who are less familiar, the first question they have is, “Doesn’t applying for lots of credit cards hurt your credit score?” Not necessarily.

But the second question people usually ask is, “Do you really pay the annual fees on so many cards?” So I wanted to share some thoughts on how you can call credit card companies and ask for retention offers, and how that might work for you.

Decide what fees make sense for you

Generally speaking, when it comes to annual fees, there are three basic categories of credit cards (listed here with examples):

• Cards with no annual fee: Citi Double Cash® Card, Chase Freedom Flex®.

• Cards with annual fees around $95: Ink Business Preferred® Credit Card, Citi Premier® Card (no longer available to new applicants), Citi® / AAdvantage® Platinum Select® World Elite Mastercard®, Marriott Bonvoy Boundless® Credit Card.

• Premium cards with annual fees of $395 or more: Hilton Honors American Express Aspire Card (see rates and fees), Citi Prestige® Card, Chase Sapphire Reserve® and the Capital One Venture X Rewards Credit Card.

Not every card falls into one of these three categories, but this holds for the vast majority of cards. Sometimes the annual fees are waived for the first year, so in those cases there would be no out-of-pocket cost to apply for a new card.

» Learn more: Chase Sapphire Reserve review: A first-class premium travel card

Request an offer, then consider it

Maybe you applied for a new card 12 months ago with a waived annual fee, and now that annual fee is about to hit (or maybe already has). You already received the welcome bonus, so now you need to decide whether or not to keep the card. Whenever a card’s annual fee comes due, I usually will make a phone call to the credit card issuer to see if it has any retention offers available.

If you think about it, there is a (fairly significant) cost for the credit card companies to acquire new customers, so in many cases they are willing to give you bonus points and/or statement credits to keep the card in your wallet.

Here’s an example from a recent situation where the $95 annual fee came due on my Citi Premier® Card. I called up Citibank to see if they would give me any bonuses for keeping my card open. After speaking with an associate in the retention department, they gave me three different options:

• $95 after spending $1,000 in each of the next 3 months.

• 500 ThankYou points after spending $500 in each of the next 16 months.

• An extra 2x ThankYou points on purchases over the next 6 months.

After thinking about it, I ended up taking the first offer to fully offset my annual fee, since I knew I'd meet that spending requirement.

You can ask for offers all year

Now that we’ve learned about calling to get a retention bonus, there are a few things you can keep in mind. First of all, when you call, don’t tell the automated phone system you want to cancel. It’s possible the card will get canceled automatically before you even get a chance to hear a retention offer.

While the most popular time to call for retention offers is when the annual fee comes due, it's possible to call at other times during the year. I wouldn’t recommend calling too often, but two or three times per year is reasonable. The worst thing that can happen is that you don't get an offer.

One other thing to keep in mind is that some banks are stingier than others. It's been my experience that banks and other credit card issuers will give better retention offers on cards on which you’ve been spending a lot of money.

Think twice before canceling

If you ask for a retention offer and don’t get one that you’re looking for, you may end up canceling the card. There are some ramifications to your credit score when you close a card and a few things that you’ll want to do before closing a card, including making sure you don’t lose your points.

One alternative to closing a card would be to request a product change to a different card from the same issuer. That way you can keep your points, avoid the negative impact on your credit score that closing a card can have, and still avoid having to pay an annual fee — assuming you product change to a card without a lower fee.