Can You Get Out of Paying Your Credit Card's Annual Fee in 2024?

Do you have a credit card (or two) that charges an annual fee, and you're wondering if it's worth paying for another year? Maybe you aren't using the card's perks as much as you thought you would, or maybe you aren't spending enough to make a card's rewards program worth paying for.

If you're questioning whether your credit card's annual fee is worth it, call your credit card issuer to see if it will offer you a retention bonus if you choose to keep the account open. It's a common practice for people to apply for a credit card with a high annual fee to receive an initial welcome offer, but to reconsider the card before the annual fee becomes due again in a year.

How to ask for an annual fee waiver

The exact procedure (and success rate) depends on the particular credit card issuer. The best course of action typically involves calling your credit card issuer (not reaching out through live chat or any other way) and asking to speak to the retention department. You may be asked a few questions first, so just politely say that you are considering closing the card in favor of one with a lower annual fee through another bank.

Your outcome will likely depend on a few factors, such as how long you've had the card and how much you spend on it, but in general, one of three things will happen.

1. No retention offer will be made. You need to be prepared for this as a possibility and decide whether you want to keep the card or cancel it if it does happen. In some cases, the card issuer will offer to downgrade your card to one that has a lower annual fee.
2. You'll be offered a fee waiver, which can reduce or eliminate the card's annual fee the next time it's due.
3. You'll get a retention offer, which is typically a certain amount of rewards points or miles after reaching a spending target. For example, you may get 15,000 airline miles after $2,000 in spending over the next three months.

As mentioned, the outcome can vary considerably, but if you have a long history of being a good customer, always pay your bill on time, and use your card frequently, there's a good chance the credit card issuer wants to keep your business.

The bottom line

The best-case scenario is usually getting out of the card's annual fee entirely, but even a point-based retention offer can make it more desirable to pay the fee and keep the card. I'm planning to test this out, as I have a couple of credit cards with annual fees that I get value from but could certainly live without. I'll be calling to ask for retention offers to keep them within the next few weeks -- and I'll be sure to write about how it goes.

The bottom line is that paying a credit card's annual fee can be worth it, but it doesn't necessarily need to be a decision of, "Should I pay the annual fee for another year or cancel the card?" You might be surprised at the retention offers you'll get, and the worst thing the issuer could say if you ask is no. If you want to avoid annual fees altogether, check out our best no annual fee credit cards.