Credit Cards The Basics

Canceling a Credit Card

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This past week, I received one of my credit card statements that showed that my annual fee would be charged in a few weeks. Quick sidebar on that: there are a couple of ways to remember when your annual fee will hit (if you don’t write it down someplace). One is to look at the card to see when the expiration month is (that will be the month that you initially signed up for the card) and the other one is to check on your statement for the information (they do have to tell you that it will be charged soon and when). Even if you do get charged for it, you typically have 30 days from then to cancel the card and get a refund on the annual fee.

Anyway, it was a (Chase) card that I was not planning on keeping because I was not getting the value from it anymore that I once did. So, I called up fully prepared to cancel (however, I was going to transfer my line of credit to another card so that I wouldn’t lose my overall credit line with Chase. Here is (roughly) how the conversation went:

Me: Good evening, sir, how are you doing tonight?

Agent: Fine, sir, how can I help you?

Me: Well, I was calling because I saw that my card is coming up for renewal and I wanted to cancel it before the fee hit. If possible, I would like to move my available credit line from that card to my Sapphire Preferred.

Agent: I’m sorry to hear that you want to cancel your card. Do you mind if I ask why you want to cancel it?

Me: Not at all. I had gotten it because I was planning on flying United more this year and knew I could get some great value out of the perks the card offered. However, I am about to become Star Alliance Gold so I will not need the card for the free bags anymore and that is really the only value left that I needed.

Agent: Well, congratulations on securing Star Gold. What about earning miles with United for award travel?

Me: Thank you for mentioning that but I am all set with that. As you can see, I use my Chase Sapphire Preferred a lot and with that I can transfer my points to United or to other airline partners so I prefer that flexibility.

*Keep in mind – I really am wanting to cancel this card. This is just the rigamarole that you have to go through to cancel a card

Agent: I can definitely help you with that. I will just need to transfer you to an Account Specialist to have them help you with your request. I will get someone on the line now.

Short wait and then another account specialist comes on.

Agent: I understand you want to cancel your account. May I ask why? (no kidding, same intro)

Me: Well, as was telling the other agent, I am not getting the value of the card anymore to justify the annual fee ($95).

Agent: Yes, I see that here in the notes. Well, we are not allowed to waive the fee but I do have a couple of offers for you that may persuade you to keep the card. First, I could offer you 10,000 United miles that would post to your account within 4 weeks or I could give you a $100 statement credit on your next bill.

At these offers, I was more than willing to keep the card. Since I value United miles around $.02 per mile, I figure $.0095 was a pretty good deal for these miles so I decided to keep the card open and take them.

Me:  Thank you very much. I believe I will take you up on your offer and will take the 10,000 miles. I really appreciate it. That definitely helps me to keep the card for another year.

And so ended a few minute phone call which ended up with me picking up another 10,000 miles. This has happened a few times before as well with other cards (and different retention bonuses). Here are some things to help you when you make your cancelation calls:

  • Call before the fee hits (even though you can cancel the card and get a refund of the fee if done within 30 days of posting) as it gives you a better negotiating position
  • Only call if you are prepared to cancel the card. Some bloggers will tell you to do this for every card (even though you do not plan on canceling them). I don’t agree with that for many reasons (not the least of which would be an ethical one). Some of the reasons are: they make notes in your accounts and may track your cancelation calls, they may just let you cancel the card without any offer, you want to build a good long-term relationship with the card issuers and calling for every card each year may damage that.
  • Realize that you most likely will never get the fee waived, but they will sometimes try to offset that with at least a statement credit for a portion of the annual fee if not the whole fee
  • As soon as you get the automated phone system, say that you want to cancel. This will route your call to the retentions department. These are the special agents who will try to help you stay
  • Be honest
  • If you really, really want to cancel no matter what, be firm but polite.
  • Be ready to ask them to transfer the credit line over to one of your remaining cards with them (note – credit lines cannot be transferred to charge cards and, with Chase, credit lines without at least $500 available cannot be transferred at all
  • If you want to cancel with little/no hassle, secure message them through their website while logged in

Now, when should you not cancel the card?

  • Just about every airline card allows you to take one free checked bag per trip. Most of the time, that is available to at least one other member on your reservation. For one trip of two people (both checking a bag), that would be $100. Most cards have an annual fee under that so you can get the value from that with one trip
  • Perks offered by the card that you may not get elsewhere or that may cost more separately. If you have the United Explorer card, that card acts as your primary rental insurance when renting a vehicle. This way, you definitely do not pay for the insurance from the rental company and you don’t have to worry about your own premium going up if you were in an accident. If you rent cars frequently, that could be worth a lot.
  • Hotel cards often give a free room when you pay your annual fee. For example, Hyatt gives you one free night for your card anniversary (up to a Category 4). The annual fee is $75 but most of these hotels cost more than $75 to stay so you are making out well.
  • Some airline cards have fantastic bonuses and perks. For instance, most cards give you higher boarding priority. This helps in finding some space for your bag before the entire plane fills. Also, some cards already have a hard coded bonus to give you miles each anniversary while others give you a free companion ticket while others let you purchase lounge passes at a discount.
  • If you are on the fence about whether or not you are going to keep the card (because of the high fee), set a number or item in your mind before calling. Use this as your point of agreement as to whether or not you will keep the card.

Anyway, I hope this helps. We get phenomenal value out of our credit card sign-up bonuses but the fees do come down after the first year. I am sure many of you have some of those fees looking you in the face even now. I hope this helps you to determine whether you will keep cards or, if  not, how to handle the call when canceling a credit card. Good luck!

Editorial Note - Opinions expressed here are author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.

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About the author

Charlie

Charlie has been an avid traveler and runner for many years. He has run in marathons around the world for less than it would cost to travel to the next town - all as a result of collecting and using miles and points. Over the years, he has flown hundreds of thousands of miles and collected millions of miles and points.
Now he uses this experience and knowledge to help others through Running with Miles.

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