Tip: Consider a Retention Offer Before Canceling Your Credit Card
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If you’re thinking about canceling your credit card for any reason, you should consider the possible retention offers that issuers may offer when trying to dissuade you from closing your account. Banks pay a lot to acquire customers, so it can be worth it for them to offer a bonus for staying. These incentives are usually enough to negate the cost of the annual fee, or they can sometimes be worth even more.
I had been thinking about closing my Citi / AAdvantage Platinum Select World Elite Mastercard, as the annual fee for the card was coming up. I’ve been putting most of my spend on my Chase Sapphire Reserve, I rarely fly American and don’t take advantage of the card’s benefits as often as I’d like to.
I called Citi and told the representative that I wanted to close my account because the annual fee was too high, and the rep transferred me to an account specialist who offered me a special deal. If I were to spend $95 dollars on my card during the next month, Citi would waive the $95 annual fee for the upcoming year. I decided to accept the offer, seeing the value in the deal. A simple phone call saved me $95.
Although I don’t use the AAdvantage card that often, it still has some pretty great benefits. It offers free checked bags for you and up to four companions on the same reservation when you fly AA. Another great benefit is that you’ll get 10% of your miles back, up to 10,000 a year, when redeeming for award flights. That’s not bad, as 10,000 American miles are worth $150 according to TPG’s latest valuations. Cardholders also have access to reduced mileage awards, which can lead to even more bang for your miles.
Not every card issuer will offer a deal like this, so don’t expect to get rewarded for trying to cancel your card. Keep in mind that not all retention bonuses will be worth it, so make sure you weigh the pros and cons before accepting an offer — but it never hurts to listen!
Featured image courtesy of Getty Images.
WELCOME OFFER: 60,000 Points
TPG'S BONUS VALUATION*: $1,200
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel