How to Get Your Credit Card’s Annual Fee Waived

How to Get Your Credit Card’s Annual Fee Waived article image.

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Not all credit cards have an annual fee, but those that do commonly charge a fee of $39 to $99 per year. For premium cards that have extra perks, that price could be even higher.

When you first sign up for a card, the rewards and benefits you get for membership could be enough to justify paying the cost—but things could change. If you no longer see enough value to justify a fee, your financial situation has changed or the card's annual fee has gone up, it could be time to consider ways to lower that cost.

Instead of jumping straight to canceling the card, you could try contacting the card's issuer to ask for a one-time fee waiver or another accommodation that could hold you over.

Ways You Can Get Your Credit Card's Annual Fee Waived

If a credit card's annual fee is causing you to rethink the account, taking the following steps could help you qualify for a fee waiver.

Keep Your Account in Good Standing

Asking for a fee waiver is asking for your credit card company to do you a favor. Companies, in general, are more willing to do favors for customers who have never missed a payment. Make sure to pay at least the minimum due each month because it could better your chances of having the request for a fee waiver accepted.

Figure Out if the Card Is Still Right for You

Think about why you're no longer getting enough value from the credit card to offset the annual fee. Your spending habits may have changed, for instance, or maybe you travel less and get less use out of travel-related perks.

If you're asked why you want the fee waiver, thinking about this beforehand could help you explain your situation. Based on your spending habits, the card issuer may transition you to another card that's a better alternative.

Call the Card Issuer and Ask

Once you've laid out your reasoning for wanting a waiver, it's time to call the credit card company. The number to call should be on the back of the card. Explain that you're seeking a waiver on the annual fee and why.

Review Your Options

Offers can vary—a company may agree to waive some or all of the annual fee, or an alternative could be pitched instead. Once you have some options on the table, take a second to figure out if the deal is valuable enough to make keeping the card worthwhile.

Alternatives if You Can't Get the Annual Fee Waived

A fee waiver isn't guaranteed even if you follow the steps above, but you still have other options to consider if your card fee is too high.

Downgrade the Card

If the credit card company offers other credit cards, you may be able to downgrade your credit card to another one with a lower fee.

Cancel the Card

A final resort could be canceling your card. The advantage of this is that you get rid of the fee, and having one less card could help you avoid incurring more credit card debt.

However, a drawback of closing a card is that it eliminates the card's credit limit from your credit utilization ratio, which is an important factor that affects your credit score. Since credit utilization expresses how much of your total available credit you're using, removing a card from this calculation could decrease your overall credit limit and cause your utilization to increase.

For example, if you have a total credit limit of $15,000 across your credit cards and total balances of $4,000, your utilization would be 27%. If your available credit decreases to $10,000 after closing a credit card and your other card balances remain the same, your utilization would climb to 40%. An increase in your credit utilization can be negative for your credit score, especially as it approaches and climbs above 30%.

Before canceling a card, consider your overall financial goals. Say you're planning to buy a house or car within the next year and the credit card is helping you maintain a strong credit score. It could make sense to hold off on canceling until after making the major purchase. If the cost of an annual fee is a financial burden, however, canceling might make sense.

Credit Card Companies May Give Fee Waivers, But It's Not Guaranteed

Fee waivers and retention offers available can vary from one credit card company to the next. Keep in mind that if you do qualify for an offer, it's generally a one-time thing and not something you'll get repeatedly. Because of this, you'll still have to make a decision on if the card is worth keeping over the long term.

If you'd rather avoid an annual fee, Experian CreditMatch™ could help you find a new card that doesn't have one. The credit card marketplace has several no-annual-fee cards that offer perks and rewards on everyday shopping, travel and more. You can compare terms and offers head-to-head to find a card that better fits your lifestyle and budget.