My Experience Canceling Various Credit Cards & All The Retention Offers

One of the most important attributes to being a successful travel hacker is organization. I think it is one of the most under-discussed and overlooked skill needed to master this hobby of ours. Every month, I set aside several hours to do my “homework” and go through all my credit card accounts to ensure I haven’t been hit with fraudulent charges, missed any payments or have any annual fees currently due. I’ve been especially focusing on cards with annual fees as many cards are worth it in year one (especially since many annual fees are waived for year one) but not so much afterwards.

My goal this time around was to reduce the annual fees I am paying and going through my monthly homework, I identified 6 cards that could meet the chopping block. I thought it would be an interesting and informative post on how I came to the decision on each card and what (if any) retention offers were made. I think the offer made on my wife’s Ritz Carlton card was the most interesting but I’ll let my readers decide that.

RIP

RIP

Card 1: Citibank American Airlines Platinum Select – $95 annual fee

I opened this card two years ago to earn 50,000 miles + earn 10% back on AA award redemptions. The annual fee was waived for the first year and last year I accepted a retention offer for a $95 statement credit if I charged $95 to the card within 3 months of the annual fee. Now the annual fee was due yet again and I called to see what retention offers were available. I got the same offer as last year but I declined it this year – why? Well, within the past year my former Barclays US Airways MasterCard was converted to a Red AA Aviator card that offers the same main benefit of 10% back on AA award redemptions (along with other perks such as free checked bags, priority boarding etc). I didn’t need two cards with the same benefits so I chose to axe the Citibank version of the card to restart the 18 month clock to get the card again.

Card 2: Barclay Arrival Plus – $89 annual fee

This was my favorite cash back card until the recent changes made (increasing the minimum award redemptions from $25 to $100, only getting 5% points back, no Trip It Pro, etc.) caused me to rethink why I needed this card. I liked using the rewards from this card to buy Uber credits in $25 chunks since you could earn the 2,500 points required by spending only $1,250 (which wasn’t hard if you MS’ed). However, now in order to break even on the card with the $89 annual fee, I would need to spend a ton on this card each year for it to be a better value than a no annual fee 2% cash back card like the Fidelity American Express or the Citi Double Cash which just wasn’t going to happen. My retention offer was to downgrade to no annual fee 1% cashback version of the Arrival card but why would I chose to put any spend on that card when I have better 2% cash back alternatives available? I quickly dismissed the offer by stating exactly that and my card was closed moments later.

Cards 3/4: Chase Ritz Carlton Visa x2 – $395 annual fee

My wife and I both signed up for the 140,000 point offer on this card last year which was possibly one of my favorite signup bonuses from last year. We timed these applications right and for paying the $395 annual fee, we each got 140,000 points, $600 in airline gift cards ($300 annual airline credit which we were able to use 2x since it is a calendar year based), Marriott Gold status and 3 Ritz Club level upgrades. We enjoyed the perks in year one but for year two, there is no compelling reason to keep the card unless you are a frequent Ritz customer (which we aren’t). It is a card you never want to put spend on and since we already used the $300 annual airline credit this year, I didn’t see a reason to keep the card.

The retention offer on this card was interesting though it was only offered it on my wife’s card and not mine. If she spent $5,000 in 3 months, she would earn 5,000 bonus points (yawn) AND a free night certificate for any 1-4 Ritz Carlton (say what?!?). I quickly debated the value of this and while I think this offer is definitely worthwhile for some, I passed. We’d still be paying $395 for this free night and there aren’t any Ritz Carlton stays planned for the next year so I was worried I wouldn’t be able to use the free night. I do recognize that if I had a use for the free night, I should have taken the offer as I could wait till January came around, used the annual $300 airline credit since it would be reset (though it has gotten a LOT harder to buy airline gift cards to use this credit) and then cancel the card in early 2016 to earn a pro rata annual fee rebate (if Chase does that, I’m not sure). This was the best retention I received on any card and one that should be seriously considered if you don’t have concerns over using the free night and/or using the $300 airline credit.

Cards 5/6: US Bank Club Carlson Visa x2 – $75 annual fee

I’ll make this one quick and easy. Basically, US Bank destroyed the value of these cards when they took away the last night free when using points. It really was an offer too good to be true – if done right, every 2nd night was free! Well, once the program was gutted a few months back, these cards were useless to me. My wife and I both cancelled them and cited the loss of the last night free on award stays as the reason. Neither of us got any retention offer, bonus points or offers for a free night like others I know were offered. Should I have HUCA’ed? You bet but if I’m being honest I want nothing to do with US Bank and/or Club Carlson so I was more than happy to cancel the cards without trying to get a retention offer. I don’t recommend doing this but in this case, I really just didn’t care.

Even after cancelling all these cards, my wife and I still have 36 different cards open between us. Over the next few months, I’m sure we will be cancelling more of them as I am really evaluating if a credit card’s annual fee makes it worth keeping. If this post turns out to be popular or readers request it, I’ll write a similar summary post when I do my next round of cancellations and retention offers.

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.