Premium credit cards: how to get the annual fee waived

If you want to keep your premium credit card but not pay a fee, the first step is to call your credit card company. Politely tell the customer service representative that you are considering cancelling your card, but was wondering if there were any retention offers available.

Ask to be transferred to the retention department as retention officers have the power waive your fee.

Keep in mind that it is the retention officer's job to keep you as a customer, but have you pay the fee. A common tactic used is to have the customer use their points to pay the annual fee. I always decline this "offer" as it is a terrible use of my points. I collect points to pay for trips not fees.  

Next, they will highlight all the features and benefits available with the card such as the extended warranty, price protection and travel insurance.

I let them talk for about a minute before politely interrupting them by saying that the rival card I'm considering has similar features, and my issue is paying the annual fee.

At this point, the retention officer will have enough information to either turn me down, waive the fee or give me a retention bonus, which is enough points at least to cover the cost of the fee.

If turned down, don't give up

If you get turned down, don't give up. Hang up and try again with a different agent. You might get a different outcome.  

If you spend at least a couple of thousand a month, pay on time, have no balance, or a manageable credit card balance, you have a decent chance at getting your fee waived.

Ryan Remiorz/Canadian Press

Those carrying a lot of credit card debt will have a harder time getting fees waived if your card company believes that you'll have difficulty qualifying for a card at a rival institution.

Some cards never waive their fees because they are confident that even if their customers test the market, they won't find a better offering. I don't mind paying the annual fee as long as I'm getting value.

In a typical year, I collect $3,500 worth of points, so it makes sense for me to pay the annual fee even in years when I can't get it waived.

I also take advantage of the insurance benefits included with my premium card. For example, I have used price protection insurance to save $250 on a TV and, when my bike was stolen, I put in a claim with my credit card and they replaced it the next day.

If you are paying for a premium card, it is worth finding out protections you are eligible for, and don't be afraid to use them.

Avoid carrying credit-card debt

If you are not getting value out of your premium card, then I would suggest downgrading the fee-free card or, if you are carrying a balance, then consider enrolling in a lower interest rate card which cuts the interest charges in half.

However, even with the "low" interest option, you are still paying nine to 12 per cent.

Since credit card interest is calculated differently than a line of credit or loans, whenever possible avoid carrying credit-card debt.

Two months ago, I missed a payment by two days but was charged interest for the full month. If you are a good customer, you can complain and ask for the interest charged to be waived, which they will likely do on an exception basis.

You can only get away with this once every couple of years, so be diligent and make those payments.

This column is part of CBC's Opinion section. For more information about this section, please read this editor's blog and our FAQ.