Published in: Credit Cards | April 1, 2019

Can You Get Out of Your Credit Card's Annual Fee?

By:  Lyle Daly

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If you play your cards right, you could end up not paying a dime for your credit card.

Woman at desk talking on cell phone while holding credit card.

Image source: Getty Images.

I have a love-hate relationship with my credit cards. I love the rewards and perks they offer, but I hate the annual fees.

While credit card annual fees can be worth the money, no one likes paying them. The good news is that you don't always have to, as it's entirely possible to get your card issuer to waive the annual fee.

Getting out of your credit card's annual fee

There's no secret to getting your credit card's annual fee waived. All you do is call your card issuer and ask them to waive it. You can phrase it however you're comfortable. Personally, I mention that I like the card quite a bit, but I'm not sure about paying the annual fee.

This isn't a 100% guaranteed method. The representative you speak with could say no, of course. But research has shown that the majority of consumers who request a fee waiver are successful, and it never hurts to ask.

Even if your card issuer doesn't waive your annual fee, it may offer you another benefit to convince you to keep your card. This could be bonus rewards, such as 10,000 extra points, or a discount on the annual fee instead of a full waiver.

What affects your chances of an annual fee waiver?

There are two things that will affect your odds of getting your credit card's annual fee waived the most:

  • The amount of the annual fee
  • Your history with the card issuer

The lower the annual fee, the more likely it is that a card issuer would be willing to waive it. One $95 annual fee isn't a huge deal for a card issuer, but $450 is a lot of money to write off. With cards that cost that much, the annual fee is a big part of recouping the cost of the card's benefits.

You'll be most likely to get your card's annual fee waived if it costs $100 or less. Fortunately, many of the best credit cards fall into this price range.

Your history with the card issuer refers to:

  • Payment history: Card issuers appreciate customers who always pay on time.
  • Credit utilization:It's important that you keep your credit card balance low compared to your credit limit. Ideally, you won't use more than 10% of your available credit at a time.
  • Previous fee waivers: It's easier to get an annual fee waived if you haven't already had that fee waived before.

Of course, your card issuer will heavily consider how profitable a customer you are for them. If you're spending $2,000 per month with that credit card, they'll make much more in transaction fees than they would if you only spent $100 per month. More profitable customers are more likely to get extra perks, such as annual fee waivers.

What to do if your request is declined

If you can't get your card issuer to waive the annual fee, you have three options with your credit card:

  • Keep it.
  • Downgrade to a different card.
  • Cancel it.

You can do the math on the rewards you're earning with your card to see if it's worth keeping, but I prefer a quicker method. Ask yourself: Is this a credit card you use regularly for a good portion of your expenses? If it is, then you're probably earning enough in rewards to make the annual fee worthwhile.

If not, then you most likely aren't getting your money's worth for the annual fee. In that case, you can check out no-annual-fee cards offered by the card issuer and then call to ask if you can downgrade.

Canceling a credit card usually isn't recommended, but it may be the way to go if you want to cut down on how many credit cards you have or if your card issuer won't let you downgrade. Just remember that you'll have less available credit when you cancel your card, so if you've been carrying any balances on other cards, then your credit utilization will increase. That can cause your credit score to drop.

Saving money when your annual fee is due

If you're the type of cardholder who uses their credit card often and always pays the bill on time, then there's a good chance you can get its annual fee waived. Your card issuer probably won't waive the fee every year, but even one year without an annual fee will save you some cash.

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