How I Tried to Avoid a $550 Annual Credit Card Fee

Here at How to Save A Buck, we’ve always preached the importance of managing credit card fees wisely.

So when I faced my Chase Sapphire Reserve $550 annual fee, I immediately thought, “How can I avoid this?” I wasn’t thrilled about the charge, so I called Chase and asked for a retention offer. This is a common tactic where you ask the card company to waive or reduce the fee in exchange for keeping your account open.

Unfortunately, I wasn’t successful. They politely declined my request, leaving me with a decision: Should I pay the fee and keep the card, or explore other options? Here’s what I learned from the experience, and what you can do if you’re facing a hefty annual fee on your credit card.

What Are Retention Offers and Why Should You Ask?

Retention offers are essentially perks or incentives that credit card companies give to customers to keep them from canceling their cards. These can range from waiving the annual fee to offering extra points or cashback bonuses. The key point here is you have to ask. You might not always get what you want (as I learned), but if you don’t ask, you’ll never know.

According to a recent Bankrate study, nearly 70% of cardholders who asked for a retention offer or fee reduction were successful. That's an encouraging statistic—more than two-thirds of people who request a fee waiver or retention offer get some form of concession from their card issuer.

The catch? Issuers are becoming more selective about who qualifies. Factors like your spending habits, how long you’ve had the card, and how much you utilize its perks can all influence whether they offer you anything.

I did get a $99 fee on another card I have. I called and asked for an offer - and BOOM - they gave me $50 statement credit. My fee was halved! SUCCESS!

General Rules About Credit Card Annual Fees

Credit card annual fees can range from $50 for basic cards to more than $700 for premium cards that offer significant perks like travel credits, airport lounge access, and higher reward rates. If you’re paying a high annual fee, it’s important to ask yourself: Am I getting enough value from this card to justify the fee?

Here are a few general rules to keep in mind when it comes to annual fees:

1. Know the Perks: High-fee cards often come with valuable perks like the ones mentioned above. If you’re using these benefits frequently, the fee may be worth it. For instance, I’ve used my card's $300 travel credit and lounge access enough times to offset a good portion of the fee (image below).

2. Negotiate or Downgrade: Always call your card issuer before your annual fee is due. While retention offers aren't guaranteed, it’s worth asking if they can reduce or waive the fee. If that doesn’t work, you can often downgrade to a no-fee version of the card while keeping your account open, preserving your credit history and a healthy credit score.

3. Track Your Spending: If you’re not getting enough value from the card, consider switching to a no-fee card or one with a lower fee. Data shows that about 20% of consumers actively seek to close their accounts or downgrade when faced with a high annual fee, according to a CreditCards.com survey. However, before closing any account, evaluate how it could impact your credit utilization ratio and overall credit score.

4. Look for New Offers: Sometimes, if you're a loyal customer with a good history, issuers might offer promotional points or cashback as a way to keep you from canceling. Though my issuer didn’t waive the fee, I’ve known some who received thousands of bonus points just by asking.

What You Can Do If You’re Hit with a Fee

If you’ve been charged an annual fee and you’re not sure if the card is worth it, here are a few steps to take:

1. Call and Negotiate: Ask if there’s a way to waive the fee or get a retention offer. As I mentioned, about 70% of people are successful when they try.

2. Consider a Downgrade: If they won’t budge, ask about downgrading to a no-fee version of the card. This keeps your account open, preserves your credit history, and avoids the fee.

3. Maximize the Perks: Take full advantage of any credits, rewards, or benefits the card offers. If you can make the most of perks like a travel credit, it might be worth keeping the card.

4. Evaluate Your Card Portfolio: Sometimes, the benefits don’t outweigh the cost, especially if you’re not using all the card's features. If that’s the case, it might be time to consider canceling and finding a card with lower or no fees that still meets your needs.

In the end, I decided to keep my premium credit card. After weighing the benefits—the value still justified the cost for me. But not everyone will reach the same conclusion, and that’s okay. The most important thing is to make an informed decision.

So, if you’re facing an annual fee, remember to call your issuer. You might get a fee waiver, retention offer (like me on my cheaper card), or bonus points that could make keeping the card worth it. If not, downgrading or switching cards is always an option. Whatever you choose, be proactive.

Don’t let the fees rack up without getting the most value in return!

Save On,

Chris