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Negotiate your annual credit card fee

To the point Do I have to pay or negotiate the annual fee for my credit card to keep all its benefits? milesopedia's tips

Negotiating your annual credit card fee may be an option! It doesn’t cost anything to ask and it can pay off. In practice, how is this done? Here are our tips.

What to do when the first year of your credit card expires?

There are many welcome offers with the first year free. But then comes the time for renewal: the first year ends and the membership fee will be charged.

Many people feel that in order to keep the benefits of their card, they have no choice but to pay their fees in order to remain a good customer of the bank. But is this always the case?

telephone attente

Annual contributions: what should be negotiated?

Everything (or almost everything) is negotiated nowadays. It is the same for the payment of invoices for a service. Electricity, Telephone, Internet, car insurance.

The market offers change, evolve. The renewal of a contract provides an opportunity to discuss it with suppliers in order to obtain a discount, compensation if the service has been little used or even to leave for another supplier offering more advantageous services.

The ideal is to keep up to date with the market in order to know the current arguments. For example, the airport lounge you were entitled to with the credit card was closed for most of the year?

Like any business, the supplier is looking to keep your loyalty. He has room to maneuver to persuade those who would like to jump ship… Retention measures, shall we say.

Let's take the case of Mathieu C. concerning his contribution

This is a question that was recently asked in the milesopedia Facebook group by Mathieu C.

I should be paying the fee for my Westjet Word Elite MasterCard (which I love – especially for its companion ticket) soon, but I don’t know how to steer the discussion with the customer service agent to not pay this fee. Because no matter what, I want to keep it for sure. Do you have a trick or an idea?

To which we replied: Call!

Only 11% of credit card holders call to negotiate their annual fee. But of these 51% receive a full reduction in these fees and 31% a partial reduction.

And here is the testimony of our reader after our advice

They reduced my annual fee by 50% (a savings of $50). A good hourly rate for the 5 minutes of time it took me!

A little tip for your readers: when I told her about my application, she initially said NO saying that the reason for the fee was the insurance and benefits of the card and I replied that I was thinking of cancelling my card otherwise as I already had other cards at another financial institution.

Finally she put me on hold to analyze my file and she came back a few minutes later with this proposal and told me that it was an exception for this year ONLY. We will see next year.

What are the factors that contribute to a reduction in the annual fee on his or her membership?

We are not financial analysts but some factors are obvious: if you use your card a lot (and pay for it!), then you are a good customer so they will be more inclined to make a commercial gesture in your favor.

It also depends on the amount of the fee, which represents substantial revenue for the financial institution. Finally, mentioning a possible closure of the card can also trigger a retention process with an offer at the end. But this is only a last resort if closing is really an option for you.

What can you get?

Extending a credit card also allows you to increase the average age of your accounts on your credit report, which has a positive effect on your credit score.

You can be granted during this negotiation:

  • a total reduction,
  • a partial reduction,
  • a certain amount of points or miles.

In the latter case, before giving an answer, do a quick calculation if it is worth it. When renewing an Aeroplan card for example, use our calculator.

One Aeroplan point is worth 1.7 cents, so if you are offered 5,000 points that’s a discount of about $85. In the case of the Scotiabank American Express card, the rate is 1 point = 0.01 cent, so the 10,000 points often offered by Scotiabank entitle you to a $100 fee reduction.

I have a confession to make: I don’t like talking on the phone. I don’t think I’m the only one who is embarrassed to ask for a discount.

Yet last year I had to call two banks: MBNA and CIBC. The first one didn’t want to know anything about it but the second one refunded the annual fee in full and yet I didn’t use the card much.

What if you don't get your way?

Our best advice: if your arguments hold up, hang up and call back! Every representative is different and you may find someone more accommodating. Don’t waste your time being stubborn with the person, you have the right to ask for a second opinion.

Finally, remember “
Nothing ventured, nothing gained!

Come to discuss that topic in our Facebook Group!

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