Consider Whether To Keep The Card When The Annual Fee Is Due

Unknown-2When the time comes to pay the annual fee, consider whether the card makes sense to keep.  Many times the credit card companies waive the fee the first year as an additional enticement for you to apply for the card. But what happens a year later when you get a bill for the annual fee for a credit card that you may no longer use, a card you only applied for to get the very attractive point bonus, which you did?

At this point, I usually call the bank and ask them to waive the fee. They usually say no. However, I have found that some banks like Citibank will negotiate with you. They will make offers such as use the card for 5 purchases (OF ANY AMOUNT!!!) and they will waive the fee. Ok I will bite!!!  (um, this may not be true anymore with Citibank.)
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I recently got the $95 fee waived on my Citi Visa just by taking advantage of this very easy assignment that Citi gave me. However, other banks like Chase are not so flexible. They will not negotiate, despite the fact that I say that I am going to cancel the card.  For example, I closed my Chase Marriott because I did not want to pay the fee. After all, I had already acquired and used the 50,000 bonus points I received when I originally got the card!  Canceling a card has a small impact on your credit score as long as other positive financial factors are in place. You can read about the effect of canceling a card on your credit score here.

Another alternative to canceling, is to downgrade your card to a no-fee or lower fee card.  You can read more about that here.

Go To Tip 8-Get Each Family Member Their Own Frequent Flier Accounts