Credit Card Fee Waiver: Reimburse or Avoid Annual Fees
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To maximize your credit card rewards, it is essential to reduce your annual fees. A credit card fee waiver can be achieved in several ways. You can choose a no-annual-fee card or take advantage of a first year free offer. However, the most effective method is to subscribe to a financial product, such as a chequing account, which allows for a recurring fee waiver if you wish to keep your card long-term. This approach offers the best balance between savings and lasting benefits.
How to get a credit card fee waiver
Generally, three approaches stand out for obtaining a credit card fee waiver. First, some cards are offered without annual fees, which eliminates these costs from the outset. Next, several cards offer a first year free, which allows you to avoid fees for a limited period. Finally, the most sustainable solution is to combine a credit card with a financial product, such as a chequing account, offered by the same bank.
When choosing a bank account, many consumers focus on monthly fees, the number of included transactions, or free withdrawals. However, an important element is often overlooked. Some chequing accounts also allow for a credit card fee waiver. This benefit can represent significant annual savings, especially with a high-fee card.
Of course, the benefits associated with certain cards, such as insurance, lounge access, or free baggage, can justify the annual fees. However, this does not mean you should pay them unnecessarily.
By choosing a bank account that offers a waiver or discount on credit card fees, you can keep your favourite cards while reducing your costs. This approach, focused on financial products, will be explored further in the rest of the article.
For example, the NBC The Total Chequing Account allows you to get up to $150 back on credit card annual fees. This rebate can be applied to a card such as the National Bank World Elite Mastercard, whose annual fees are precisely $150. Thus, this combination allows for a credit card fee waiver.
The Cost of Credit Card Fee Waivers
Premium banking packages that include a credit card fee waiver often come with monthly fees of approximately $30. This amounts to nearly $360 per year. Paying this amount solely to avoid credit card annual fees of approximately $150 is rarely advantageous.
However, some banks allow you to avoid these fees by maintaining a minimum balance, often around $5,000, in a bank account. But, there is an opportunity cost.
Opportunity cost corresponds to the return you forgo by leaving this money tied up, rather than using it otherwise. In the long term, this potential return also includes the effect of compound interest, which allows your money to grow on itself over time.
For example, this $5,000 could be used to reduce debt, build an emergency fund, or be invested. To assess if the waiver is worthwhile, simply perform a simple calculation. If you tie up $5,000 to avoid annual fees of $150, this equates to a 3% return. In other words, the waiver is advantageous if you do not have a realistic option offering a higher return, after taxes and without risk.
Finally, some banks offer reduced fees or waivers to certain groups, such as students, seniors, newcomers, or certain professionals.
However, these situations must be analyzed separately, since the calculation of opportunity cost may differ.
Which banks offer a credit card fee waiver?
Several financial institutions in Canada offer a credit card annual fee waiver under certain conditions.
These waivers are generally linked to a specific banking package or the maintenance of a minimum balance. However, conditions vary from one bank to another. The required balance, eligible cards, and avoided fees are not always equivalent.
It is therefore important to compare these options, taking into account the opportunity cost and your personal financial situation.
National Bank of Canada
National Bank clients holding The Total or The Connected chequing accounts can receive a credit of $30 or $150 on their statement, depending on the account type.
Several National Bank credit cards are eligible, including the National Bank World Elite Mastercard. This rebate applies only during the first year and to the primary cardholder.
The National Bank World Elite Mastercard is an interesting product to keep long-term. It stands out for its comprehensive insurance and a $150 annual travel credit. Furthermore, when you book a flight with points, only the tax portion is your responsibility, while still benefiting from the included insurance coverage.
The National Bank offers specific benefits to certain professionals through dedicated programs. These programs often allow for no-monthly-fee accounts and credit cards eligible for program benefits.
Certain healthcare professions particularly benefit from these programs, including:
- Doctors
- Chiropractors
- Dentists
- Optometrists
- Pharmacists
- Podiatrists
- Veterinarians
The exact conditions and benefits, such as the credit card fee waiver, depend on the chosen program and associated products. It is therefore important to check the eligibility criteria with the bank before subscribing.
BMO
Clients holding a Performance Chequing Account or a Premium Chequing Account at BMO Bank of Montreal can benefit from a credit or a full credit card fee waiver.
With the BMO Performance Chequing Account, you can receive up to $40 in annual credit on the fees of an eligible BMO credit card. This account has monthly fees, which are waived if a minimum balance of approximately $4,000 is maintained at all times.
The BMO Premium Chequing Account, for its part, requires a minimum balance of approximately $6,000 to avoid monthly fees and entitles the primary cardholder to an annual discount of up to $150 on an eligible BMO credit card.
| Credit card | Annual fee | Welcome offer | |
|---|---|---|---|
| $0 | |||
| $0 | |||
| $0 |
The BMO Ascend™ World Elite®* Mastercard®* and the BMO® AIR MILES®* World Elite®* Mastercard®* are both well-suited for travellers. They include comprehensive travel insurance protections that apply when you pay for all or part of your trip with the card.
The credit card fee waiver for these products can thus represent substantial long-term savings, especially if you regularly use the travel and insurance benefits.
CIBC
With a CIBC Smart Checking Account, you can receive an annual fee rebate on an eligible and active credit card.
| Credit card | Annual fee | Welcome offer | |
|---|---|---|---|
| $0 | |||
| $0 | |||
| $0 | |||
| $499 | |||
| $0 | |||
| $599 |
Depending on the eligible monthly balance of your CIBC Smart Checking Account, you can benefit from a discount on credit card annual fees.
- For Category 2, the primary cardholder can receive a discount of up to $50.
- For Category 3, the primary cardholder can receive a discount of up to $139, and authorized users up to $50.
TD
Two banking packages from TD Bank offer a credit card annual fee rebate: the TD Unlimited Chequing Account and the TD All-Inclusive Banking Plan. However, the TD Unlimited Chequing Account grants this rebate only for the first year. This approach is not very advantageous, as most TD credit cards already include a first year without fees as part of their welcome offer.
Conversely, the TD All-Inclusive Banking Plan offers a recurring discount on the annual fees of certain TD credit cards. This discount applies to the primary cardholder as well as an authorized user.
Specifically, a rebate of up to $139 applies to the annual fees of the primary cardholder’s eligible credit card. In addition, an extra discount of up to $75 may apply to the annual fees of an additional eligible card.
Finally, it is possible to avoid the account’s monthly fees by maintaining a minimum balance of $5,000.
| Credit card | Annual fee | Welcome offer | |
|---|---|---|---|
| $0 | |||
| $0 | |||
| $0 | |||
| $599 | |||
| $0 | |||
| $0 |
For points enthusiasts, keeping a TD® Aeroplan® Visa Infinite* Card long-term remains advantageous. This card offers better redemption rates, a free checked bag on Air Canada, and travel insurance when redeeming Aeroplan points.
Furthermore, Aeroplan has tightened its policy regarding repeated welcome bonus acquisition. Thus, keeping the same card year after year becomes more judicious. In this context, any credit card fee waiver offered by a current account represents a particularly interesting strategy.
RBC
The RBC Signature No Limit Banking Account and the RBC VIP Banking Account include a credit card fee waiver in the form of a discount. The former offers an annual credit of $48 applicable to the fees of several eligible cards. The latter allows for a full annual fee rebate for many RBC credit cards.
| Credit card | Annual fee | Welcome offer | |
|---|---|---|---|
| $120 | |||
| $120 | |||
| $399 | |||
| $165 | |||
| $139 |
In addition, the RBC VIP Banking Account offers an annual discount of up to $120 on the RBC Avion Visa Infinite Privilege Card. This reduction is in addition to other benefits associated with the bank account.
However, RBC does not allow you to avoid monthly bank fees by maintaining a minimum balance. Some clients may receive discounts, particularly students or seniors. Other reductions are possible when you hold multiple products with RBC, such as a mortgage or investments.
Thus, since monthly fees apply, using an RBC account solely to obtain a credit card fee waiver is rarely an advantageous strategy.
Scotiabank
Scotiabank also offers several popular credit cards for travel and everyday spending. Thus, it can be advantageous to examine its banking packages to obtain a recurring credit card fee waiver.
The Scotiabank Essential Package allows for a credit card fee waiver for the first year only. For its part, the Scotiabank Ultimate Package offers a recurring waiver on several eligible cards.
| Credit card | Annual fee | Welcome offer | |
|---|---|---|---|
| $150 | |||
| $120 | |||
| $0 |
Among these, the Scotiabank Passport™ Visa Infinite +* Card stands out for foreign exchange fee savings and airport lounge access. The Scotiabank Momentum® Visa Infinite +* Card and the Scotiabank Gold American Express® Card, for their part, offer high cash back rates on groceries and gift cards.
To avoid monthly bank fees, a minimum balance is required. This is $4,000 with the Scotiabank Preferred Package and $6,000 with the Scotiabank Ultimate Package. If you already hold a Scotiabank credit card, the annual fees paid can be reimbursed upon opening an eligible current account.
Conclusion
Obtaining a credit card fee waiver is essential to fully enjoy your card without paying annual fees. The most effective method is to combine a financial product, such as a chequing account, with your card. This approach allows you to keep your cards long-term while reducing your annual costs. No-annual-fee cards and the first year free are other good options.
Which financial products allow for a credit card fee waiver?
Some chequing or savings accounts allow you to waive your card’s annual fee each year if held with the same bank.
How to combine chequing accounts and credit cards to save?
By opening an eligible chequing account and keeping your card, you obtain an annual fee waiver while continuing to accumulate your points.
Which cards offer a first year free?
Several cards offer promotions with the first year free, allowing you to enjoy the benefits without initial cost.
Do all banks offer these options?
No, conditions vary by financial institution. It is important to check the eligible financial products and cards to benefit from the waiver.
