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Sarah Brodsky
Sarah Brodsky is a freelance writer specializing in personal finance and economics. She has more than 12 years of experience writing about credit, consumer banking and investing. Sarah writes for Credit Karma and Impactivate, and her clients have included Glassdoor and the Institute for Humane Studies. Her articles have been published by Haven Life, KeyBank, Investopedia, First Citizens Bank of Raleigh, North Carolina and the Coosa Valley Credit Union.
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Liza Carrasquillo
Liza Carrasquillo is an editor on the Bankrate credit cards team who focuses on providing accurate educational content to those at all stages of their credit card journey.
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You get what you pay for. That old phrase applies to many financial decisions, including which credit cards you carry. While it’s certainly possible to get a great credit card with no annual fee, you generally have to pay for premium perks. That said, credit card issuers are sometimes open to waiving annual fees in certain circumstances, which can be as easy as calling to ask.
Whether you feel like the cost of a card outweighs its benefits you just need a break from this year’s fee, here are some steps you can take to get your card’s annual fee waived:
Attempting to get your credit card’s annual fee waived isn’t guaranteed to work, but it doesn’t hurt to try, either. There are a few possible ways to convince an issuer to waive your fee:
Call the customer service number on your statement or the back of your card, and provide identifying information like your name and account number. Then, ask if you can have a waiver for your annual fee. If this is successful, you’re done. But, if the representative doesn’t agree to waive the fee, you may still be able to negotiate in the following ways.
Your issuer might give you a waiver if you meet certain conditions. For example, it might offer you a credit for the amount of the fee if you spend $1,000 with the card within two months. This may be worthwhile if you wanted to make a large purchase with the card anyway. However, it’s not a great idea to rack up a lot of charges you wouldn’t have taken on otherwise just to get a fee waived.
If you can show your issuer an offer for a card with comparable perks that doesn’t charge an annual fee, you have a good bargaining chip. Before negotiating with your credit card issuer, you’ll want to ensure the card has similar benefits, and be prepared to provide specific details on the competitor’s offer.
You could ask to speak to your credit card issuer’s retention department and tell them that you want to cancel your card to avoid being charged the annual fee. If they’re worried about losing your business, they may offer to waive the fee. They also may offer you a product change, which is when you switch credit cards (ideally to a card with no annual fee) but get to keep the same account number.
However, they might say no and simply close the account, so you shouldn’t try this tactic unless you’re genuinely ready to cancel the card if you can’t get the fee waived. Canceling a card can lower your credit score, so you should weigh your options before taking this step.
The Servicemembers Civil Relief Act limits the amount of interest and fees that can be charged on an account if the account holder is serving on active duty in the military, as long as the debt was incurred before the borrower went on active duty.
If you’re a member of the Armed Forces or a reservist on active duty, or a member of the National Guard on orders for more than 30 days, you can ask to have the fee waived on a credit card you opened previously — if it would put the rate you pay on your eligible balance higher than the 6 percent cap imposed by the law.
Several cards that typically have annual fees also offer no annual fees to qualifying members of the military. You’ll need to send your credit card issuer a copy of your military orders to prove you qualify.
Usually, card issuers charge their stated fees and don’t offer to waive them. Whether your issuer is likely to approve your request for a fee waiver depends on a few factors. If you’ve used your card for a long time and have a perfect payment history, you probably have a better chance than someone who is a new cardholder or who has a spotty record of payments. A credit card issuer might also look more favorably on someone who regularly charges significant amounts to the card versus someone who rarely uses the account.
Another avenue the issuer might agree to take is to give you extra rewards points, card benefits or a statement credit equal in value to your fee, rather than deciding not to charge you at all.
If your issuer does waive your annual fee, it will probably be a one-time courtesy, and you will likely be charged the fee again the following year.
If you cannot get your credit card’s annual fee waived, there are steps you can take to avoid paying a hefty amount.
You could ask to switch to another card from the same issuer that doesn’t charge an annual fee. This may be less of a hassle for you than canceling your card and applying for a new one with a different issuer. However, a no-fee card may not offer the same rewards, and you’ll want to find out if you can take your points or miles with you when you make the switch. If not, you may want to redeem them or transfer them to another rewards program before switching cards. You’re also unlikely to be eligible for any sign-up offers or welcome bonuses on the new card.
Paying an annual fee can be worthwhile if the rewards you earn more than cover its cost. If you use the card strategically and maximize your rewards, you might accumulate enough points or miles to justify paying the fee or generate enough cash back so the fee is taken care of.
Certain credit cards, like the Delta SkyMiles® Gold American Express Card, will also give you a points or cash back bonus by reaching a certain spending threshold. For the Amex Delta SkyMiles Gold, additionally, after you spend $10,000 in purchases in a calendar year, you can receive a $200 Delta Flight Credit to use toward future travel, which is just enough to offset the card’s $150 annual fee.
Of course, you can avoid paying an annual fee altogether by opening a card that doesn’t charge a fee in the first place. There are a number of great cards on the market offering generous rewards rates and perks without attracting an annual fee, including:
You could also consider taking out a card that waives its annual fee for the first year, such as the Blue Cash Preferred® Card from American Express. This card’s $95 annual fee is waived during the first year, which gives you an excellent opportunity to maximize the card’s value and focus on earning the welcome bonus. However, if you go this route, you’ll face the same dilemma next year of whether to keep the card and pay the fee moving forward.
Credit card issuers typically charge the annual fees they advertise, but if you’re a particularly valued customer, they might make an exception for you. If you don’t want to pay the fee and your card issuer doesn’t give you a waiver, you might want to consider an alternative, such as a new card with no annual fee.
