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(Video) Sunday Reader Question: Avoiding Credit Annual Fees and Keeping Points

by on December 2, 2012 · 17 comments

in Credit Cards, Sunday Reader Questions, Video Blog Post

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TPG reader Serena asks:

“Many of the cards have a $0 introductory annual fee, but then some sort of annual fee after that.  Do you keep the card after a year and pay the annual fee, or transfer your points and close the account once the year is up?  And does that do anything to your credit report?”

Here are some of the factors you need to consider when deciding whether to keep a card or cancel it before the annual fee is due:

As always, do the math and consider how much value you get from a card and the points it earns you before deciding whether to keep it or cancel it.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Corky Putt Putt

    Love the stockings. Nice touch.

  • Christophergarby

    you mentioned the $200 credit, I assume this is per year, so if I got my card in December last year, I actually received 2 credits, one for 2011 and one for the current year. But you said something about amex overlooking this credit after renewal, so if I renew in December, can I get a $200 credit for dec 2012 and the another in 2013? or no.

    thanks

  • Sandreadis

    CC companies will almost always make you an offer of bonus miles or will waive the annual fee when you call to cancel a card. Several times they have upped their original offer after I turned down the first offer.

    I called to cancel the BOA British Airways Visa after the first year and they waived the annual fee for year 2 and I ended up holding on to the card.

  • Whiskarina

    I LOVE that Mr. Rogers sweater… looks really cozy!

  • http://twitter.com/jamucsb Jamison

    nice Fireplace!

  • Dcamerl

    Can’t see the video……..

  • Karan0324

    Thank you so much for your advice. I joined recently and hope to be able to benefit from your knowledge and wisdom and your perspective and save me some time and money! Bet wishes of the season to your family!

  • dave goodwin

    I enjoy your blog and your advice. As a result, I’ve been happily using the Chase Sapphire and the Amex SPG cards for several months. So I’ll be looking at their annual fees before too much longer. I have to admit my wife and I don’t travel that much, and when we do, it’s usually coach within the US. So I have a hard time justifying paying fees to get cards which will give me points/miles. I also have a Chase Freedom card, so between that and the Sapphire card I do build up enough Ultimate Reward miles to be useful (I usually transfer them to United Mileage Plus miles). My wife recently received an invite to get an Amex “Blue Cash Everyday” card, which has no fee , 3% cash back on groceries, 2% cash back on gas and dept. stores, 1% on everything else. The groceries and gas are two of our major spending categories (another is dining, for which I use the Sapphire). I’m thinking I should get the new Amex Blue Cash card and cancel the Amex Spg card to avoid the fee. Make sense?

  • RP

    Helpful video.

  • thepointsguy

    Great point- never hurts to ask!

  • thepointsguy

    The $200 is by calendar year- not by renewal. So every January 1 you get a brand new $200 to spend- even if you cancel shortly thereafter

  • thepointsguy

    You should average the amount of cash back you’ll get if you put your spend on Blue Cash Everday vs SPG. I can extract as much as 8 cents per Starpoint, so thats generally why I go with that card or Sapphire Preferred/Ink BOld which provide huge value when I transfer to United/Hyatt. I’ve done the math and for me, I’d rather have the valuable travel points than cashback

  • thepointsguy

    Thank you- safe travels to your and your family as well!

  • thepointsguy

    :-)

  • thepointsguy

    I was in a very professorial mood!

  • thepointsguy

    I’ve been traveling so much, I went crazy “nesting” for this holiday season!

  • The Marc

    You mention spending the $200 Amex Plat credit on gift cards. Can you elaborate?

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