Can you get your credit card’s annual fee waived? It depends

William of England
By William of England 10 Min Read

The excellent news: There are a number of methods to get this fee waived. Here’s how.

How to get your credit card annual fee waived 

Your credit card in all probability gives quite a lot of advantages that you could or could not use repeatedly, reminiscent of money again on the grocery retailer, rental automotive insurance coverage, or entry to an airport lounge. Although a few of these perks are good to have simply in case you want them, your annual fee would possibly find yourself being a waste of cash if you don’t take full benefit. 

You would possibly even really feel compelled to cost extra bills to your card to make the annual fee appear “worth it.” For instance, you would possibly put your Netflix subscription on a rewards card that gives 3% again on streaming companies. But if you carry a steadiness month to month, these rewards get wiped away by the curiosity anyway (after which some).

“That’s why it is very important to calculate the real worth of one of these cards,” says Freddie Huynh, vp of information analytics with Freedom Debt Relief. If you resolve that paying this added fee isn’t working for you, listed here are a number of methods you can get it waived. 

1. Contact your card issuer

The first step to getting your credit card annual fee waived is leveraging your historical past with the issuer. If you’ve owned your card for some time and have persistently made your funds on time, you could have higher negotiating energy than somebody who not too long ago opened their card or has a historical past of late funds. 

Start with a retention name by calling your card’s customer support line. The quantity can normally be discovered on the again of your card or on your month-to-month assertion. Politely clarify that you wish to have your annual fee waived. Explain your historical past as a dependable buyer and emphasize that you wish to stay one. In the very best case, they could merely say sure. 

But it is probably not that straightforward. Often, customer support representatives will inform you they’ll’t accommodate this request because it’s not inside their coverage to take action. If that’s the case, request to talk with a consultant from the retention division. These brokers typically take care of clients who have already got one foot out of the door, so be sure that you are severely contemplating closing your account with out the fee waiver earlier than talking with them.  

2. Look for promotional fee waivers

Credit card firms generally provide to waive the annual fee within the first 12 months for brand new clients. So if you’re available in the market for a brand new card, search for one which’s presently selling this perk. If you have your eyes set on a selected card, you also can strive contacting the issuer to see in the event that they’re keen to briefly waive the fee in trade for your enterprise. Again, if you’re met with resistance, don’t be afraid to escalate your request to a supervisor.

3. Use navy advantages 

Members of the navy who’re actively serving (and in some instances, their relations) can reap the benefits of their advantages beneath the Servicemembers Civil Relief Act (SCRA). The act was put into place to cut back the monetary burdens confronted by service members on energetic obligation. In addition to capping rates of interest on any debt amassed earlier than becoming a member of the navy and through energetic obligation at 6%, many card issuers can even waive or refund any annual charges incurred throughout that point. 

You could have to contact your lender to debate eligibility and/or present documentation. SCRA protection sometimes stays in impact till 30–90 days after your date of discharge from energetic obligation. However, relying on your lender’s insurance policies, you could also be eligible for advantages for as much as one 12 months following the completion of your energetic obligation. 

What to do if you can’t get your credit card annual fee waived

If you already contacted your credit card issuer and it’s unable to waive your credit card fee, you have a number of extra choices to think about. 

1. Negotiate your card’s advantages

If you have been a loyal credit card buyer with a stable historical past of on-time funds, your card issuer might be able to present an extra profit instead of waiving your annual fee, which might assist cancel out the price. 

Some advantages to think about requesting embody a better credit restrict, extra anniversary factors, a lowered APR, or expanded journey perks. While not each credit card issuer is keen to cut price, it’s price a strive. 

2. Shop round for a comparable card with decrease charges

If you nonetheless benefit from the rewards you obtain on your present card however aren’t loving the worth tag, think about in search of a brand new card that gives related rewards with a decrease or no annual fee.

3. Cancel your credit card

Another possibility is to easily cancel the cardboard and shut the account. But beware: This might work in opposition to you in the long term. “If you do have an annual-fee card and no longer wish to pay the fee, think carefully, as always, about closing the account,” says Huynh. Closing a credit card—particularly one which has a excessive restrict—can negatively impression your credit rating. 

Here’s why: The quantity of revolving debt you owe in comparison with the entire quantity of credit you have accessible (referred to as your credit utilization ratio) is a serious part of your credit rating. Using a big portion of your accessible credit can seem as if you’re overly reliant on borrowing cash to cowl your obligations. Closing a type of playing cards will lower your accessible credit, which may trigger your credit utilization ratio to extend if you carry a steadiness on the others. 

Let’s have a look at an instance. Say you have two credit playing cards:

Credit Card A: $2,000 restrict, $600 steadiness

Credit Card B: $6,000 restrict, $1,000 steadiness

By dividing the entire excellent steadiness ($1,600) by the entire quantity of credit accessible ($8,000), you get an general credit utilization ratio of 0.2 or 20%. 

Next, let’s say that Credit Card B carries an annual fee, so you resolve to pay it off and shut the account. Now you’re left with Credit Card A, which has an impressive steadiness of $600 and a restrict of $2,000. That means your credit utilization jumps to 30%. As a outcome, you’ll in all probability see your credit rating take a success.

Of course, this isn’t an issue if you all the time pay your playing cards all the way down to $0 on the finish of the billing cycle.

4. Ask to downgrade your card as a substitute

Instead of closing a card, think about downgrading it to a fee-free model. For instance, the Chase Sapphire Preferred® Card costs $95 per 12 months, however you might downgrade to the Chase Freedom Unlimited® card as a substitute, which has no annual fee. This technique normally means giving up some premium perks or rewards, however you can keep away from the annual fee whereas sustaining your credit line. Plus, it doesn’t have an effect on your credit rating.

Usually, card issuers require you to downgrade to a different card throughout the identical product line. If you aren’t positive what your choices are, contact the issuer and discover out. 

The takeaway 

Credit playing cards that provide worthwhile rewards may come at a excessive worth. If you end up paying an annual fee for a card that you aren’t maximizing, think about asking your credit card issuer to waive it. 

Even if your annual fee can’t be waived, you aren’t out of choices. Consider negotiating your present credit card rewards to offset the fee, switching to a low- or no-fee card, or canceling your card fully whether it is changing into overwhelmingly costly. Keep in thoughts that adjustments to your credit card standing could impression your credit rating, so think about all elements moderately than making a hasty resolution. 

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