When it comes to credit cards, in many cases you get what you pay for, meaning most of the best rewards credit cards also come with annual fees, and sometimes pretty hefty ones.
While it’s certainly possible to get a great credit card with no annual fee, if you want premium card benefits, you generally have to be willing to pay for them. That said, credit card issuers are sometimes open to waiving annual fees in certain circumstances, and it can be as easy as calling to ask.
Whether you feel like the cost of a card outweighs the card’s benefits or perhaps 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.
How 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 your issuer
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. Although if the representative doesn’t agree to waive the fee, you may still be able to negotiate in the following ways.
See if your issuer will waive the fee in exchange for card usage
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.
Ask your issuer to match another offer
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 make sure the cards have similar benefits and be prepared to provide specific details on the competitor’s offer.
Ask to cancel
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 for you. However, they might say no and simply close the account, so you shouldn’t try this tactic unless you genuinely want to cancel if you can’t get the fee waived.
Use military benefits
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. There are also several cards that offer no annual fee 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.
How likely is a fee waiver?
Most of the time, 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 you 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.
Keep in mind that even if the issuer agrees to accommodate you, it may give you extra rewards points 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.
Alternative ways to avoid an annual fee
If you aren’t able to get your credit card’s annual fee waived, there are steps you can take to avoid paying a hefty amount.
Switch to a different card
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.
Earn rewards to offset the fee
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.
Cancel your card
You can avoid paying a card’s annual fee by canceling the card. First, find out if your rewards points can be transferred to a partner loyalty program; if they’re non-transferable, you may want to use them before canceling. Canceling a card can lower your credit score, so you should weigh your options before taking this step.
Apply for a card that doesn’t charge a fee
Of course, you can avoid paying an annual fee 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 free.
For example, the Chase Freedom Unlimited® earns an extra 1.5% cash back on everything you buy (on up to $20,000 spent in the first year). That’s 6.5% on travel purchased through Chase Ultimate Rewards®, 4.5% on dining and drugstores, and 3% on all other purchases and charges no annual fee. Neither does the Citi® Double Cash Card, which offers a flat 2 percent back on all purchases—1 percent as you buy and another 1 percent when you pay for those purchases.
You could also consider taking out a card that waives its annual fee for the first year, though if you go this route, you’ll face the same dilemma of whether to keep the card and pay the fee moving forward.
The bottom line
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 an annual fee and your card issuer doesn’t give you a waiver, you might consider an alternative to avoid the fee, such as switching to a different card.