Points & Miles 101: Before You Cancel a Credit Card Make Sure You Do This!

As you might imagine with over a dozen active credit cards, I am potentially on the hook for a lot of annual fees as the best credit cards that offer points or miles typically have high annual fees ($65-$450). Sometimes when I signup for these credit cards the annual fee is waived for the first year so it is only after having the card for a full year do I have to decide whether to pony up for the annual fee. On some credit cards the annual fee is definitely worth it as they give you a free hotel night (IHG, Hyatt, & Marriott credit cards), bonus points (Club Carlson) or airline credits, elite status and lounge access (Amex Platinum) simply for paying the annual fee. On other cards though, there is no point to keeping them after the first year as I simply signed up for the card to get the large signup bonus, which we all know is the easiest and quickest way to earn lots of points and miles.

The one big piece of advice I have is before you decide to cancel a card you should always attempt to get the annual fee waived or at a minimum, ask for a “retention bonus” (i.e. bonus points) to offset the annual fee. Let me walk you through what I just did with my Starwood American Express credit card when I called to “cancel.”

SPG card

 

I signed up for the American Express Starwood credit card in August 2013 when the signup bonus was for 30,000 Starwood points for spending $5k in 6 months and the annual fee of $65 was waived for the first year. I was excited to earn the 30,000 bonus points but once the first year ended, I had to decide whether to cancel the card or renew it. Unlike some of the cards mentioned above, the Starwood card doesn’t offer any sort of renewal bonus so for most people I would recommend cancelling the card unless the annual fee could be waived or you got enough bonus points to keep the card open. For me however, I wanted to keep the card another year as it is my go to card for everyday purchases as I am trying to increase my Starwood point balance and this is the only credit card that earns Starpoints (unlike say Hilton or American Airlines which all have several cards that earn those type of points or miles).

So even though I decided I wanted to keep the card another year, I still called in to “cancel” my card. When chatting with the representative, here a few good tips to remember:

1) Always be polite – There is no need to get aggressive or sound agitated. Ask them how their day is or how their weekend was. They deal with enough annoying people daily so being nice to them can go a long way. More often then not there is a greater chance the rep will try to help you in anyway possible if you are nice to them.

2) Tell them want to cancel the card, NOT “I am thinking of cancelling the card” – You need to sound plausible and sincere about cancelling a card to get the reps to make an offer to you to incentive you to keep the card another year. In this case, it comes down to who is gonna call who’s bluff. If you sound serious about cancelling, the rep will have to make more of an effort to keep you (i.e extra bonus points). There is no guarantee this works but it will increase your odds.

3) H.U.C.A (Hang up, Call again) – My favorite piece of advice. Make sure to not let the agent cancel the card if you receive no offer – as they start reading the legal mumbo jumbo before they can cancel the card, just tell the rep you’d like some more time to think about it and you will call back. Or my personal favorite – tell them you received an urgent call from your boss on the other line and you can’t miss the call. That will stop the rep from processing anything and it allows you to HUCA and hopefully be more successful next time with a different agent. This worked for me in my example below.

4) Be prepared to walk away – This could actually apply both ways. Be prepared to go ahead and cancel the card if you have tried several times to get something but all the reps have refused and your true intention is to cancel the card. On the other hand, if you really want to keep the card, you might be forced to give up trying to get any extra points or the annual fee waived and just accept it for what it is. Make sure to not let the agent cancel the card on you in this case.

Going back to my example, my first attempt to “cancel” my SPG Amex was via secure chat while logged into my Amex account online but the rep was unwilling to offer anything when I asked if the annual fee could be waived. I pushed a bit further and asked about a “retention bonus” to keep the card open. Again, he could not offer anything, but he did suggest that I call the American Express retention department directly and ask them. The phone number to the American Express Retention Department is 1-800-452-3945.

Later that afternoon, I called the retention department and I was quickly connected to a live agent after entering my card number. I explained that I was speaking with another agent who suggested I speak with the retention department before cancelling my card. She asked why I wanted to cancel and I told her with the other 4 Amex cards I have open, I was paying too many annual fees and “I was trying to get a hold of my finances”.

Almost instantly after saying that, the agent proceeded to explain as a policy American Express does not waive annual fees but it could offer me some bonus points if I kept the card open. My offer was for 1,000 Starpoints + an additional 500 if I spent $1,000 on the Starwood card in the next 60 days (which was fine since I had to buy a new patio set the following week). Even though the value of the points (worth $30 to me at 2 cents a point) didn’t cover the annual fee, I still accepted the offer. As I stated earlier, it is really hard to earn Starpoints and I wanted to increase my Starpoint balance for some future trips I have in mind. With the annual fee in theory reduced to $35, that was a price I was willing to pay to collect Starpoints for another year. This may not work for everyone, but it works for me and my point earning strategies.

In closing, I was content to renew the Starwood American Express for the annual fee of $65 but before I did, I made sure to “pretend to cancel” to see if American Express would blink and offer me something not to close the card. It worked as I earned an additional 1,500 Starpoints for my time chatting with a rep online and then calling American Express. There is a whole thread on Flyertalk showing other offers people received to not cancel their cards, so I highly recommend trying this approach before cancelling your next credit card.

 

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One thought on “Points & Miles 101: Before You Cancel a Credit Card Make Sure You Do This!

  1. […] the credit offered may even be more than the annual fee, says Ralph Liberatoscioli, founder of PointsCentric, a rewards and travel-consulting website. But there might be strings […]

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