Should You Expect A Discount On Your Travel Credit Card Annual Fee?

Filed Under: Advice, Credit Cards

Over the past several weeks I’ve repeatedly been asked by readers whether credit card companies would be discounting annual fees or offering other perks in light of the current situation. I wanted to share my take on that.

What’s the value in travel credit cards right now?

I view earning points as a long-term game, so I continue to earn travel rewards even though we’re not able to travel right now. I trust that I’ll be able to use my points again in the future, and that I’ll still get outsized value with my strategy compared to earning cash back.

The day will come where I can redeem miles for ANA first class again

While spending money on travel rewards cards can still make sense, there’s no denying that the travel perks associated with many of these cards aren’t exactly useful right now:

  • For many premium travel cards, lounge access is a primary benefit (whether you get access to Priority Pass lounges, Delta SkyClubs, American Admirals Clubs, United Clubs, or Centurion Lounges)
  • Many people have co-branded airline credit cards for the perks they offer when flying with an airline, like a first checked bag free, priority boarding, etc.
  • Cards that offer bonus points on categories like travel, airfare, etc., aren’t proving terribly useful for most at the moment

Lounge access isn’t a valuable perk right now

I expect card issuers will do something

While I don’t have any inside information here, personally I think it’s highly likely we’ll see card issuers introduce some non-insignificant initiatives to retain cardmembers.

Not only is it a time with no travel, but many Americans are looking to cut costs due to financial hardship at the moment, and a credit card annual fee is an easy place to cut costs.

We’ve seen Chase offer a $100 credit to those renewing the Sapphire Reserve over a limited period, though this more or less offsets the $100 annual fee hike we were supposed to see (in fairness, the card added valuable DoorDash and Lyft benefits).

What am I expecting from card issuers? I’m absolutely not expecting card issuers to completely reimburse annual fees, outside of exceptional circumstances. Rather I think it’s likely we’ll see some of the following:

  • A partial discount on the annual fee to reflect the period where people couldn’t travel
  • Some sort of points bonus to encourage people to keep the card; I imagine this will either be tied to renewing the card when the annual fee hits, or tied to completing some amount of spending
  • Some new perks that better reflect the current state of how people are spending money

Why haven’t we seen many initiatives like this on a widespread basis yet? Presumably card issuers:

  • Are waiting to see how bad the situation gets to decide what to do
  • Are looking at data of how many people are cancelling cards right now
  • Are working on relevant new partnerships right now, and those aren’t formed overnight

It’s hard for many to justify annual fees at the moment

What should you do if your annual fee is due?

When it came to airlines extending elite status, I encouraged people to give airlines time to announce initiatives, since most status is tied to the calendar year.

The challenge with credit cards is that annual fees are charged on a rolling 12 month basis. What should you do if you just got billed a big annual fee, and can’t justify paying it right now?

While I hope credit card issuers will eventually announce some official measures, in the meantime you can always call the card issuer if your card is up for renewal and explain the situation.

Card issuers will sometimes offer retention bonuses under normal circumstances (this is typically tied to how good of a customer you are), and I would think that they’d be even more aggressive about these offers right now.

If you’re not offered anything and if the card issuer doesn’t have any sort of a policy in place, then the decision comes down to whether to keep or cancel the card. Before you cancel a card, keep a few things in mind:

  • Having a credit card for a long time can help your average age of accounts, which is good for your credit score; so if you’ve had a card for a long time, try to avoid outright cancelling it
  • In many cases there will be an option to downgrade a card to a lower annual fee or no annual fee option, which could be a good temporary option; you can typically upgrade the card again in the future
  • If you’re in a position to do so (financially), it might just be worth holding onto a card, recognizing that the current circumstances are exceptional; if you’ve gotten outsized value from a card in the past, hopefully you’ll get outsized value from it again in the future

Bottom line

As of now we’re not seeing many US card issuers offering widespread perks or initiatives to account for reduced travel demand. Personally I think we’ll see more of this, it might just take time.

In the meantime, if your card is up for renewal, it can’t hurt to call your card issuer and explain the situation, and see if there’s anything they can do. If there isn’t, there might be an option to downgrade a card to a lower or no annual fee alternative, and then you can perhaps upgrade it again in future.

How are you feeling about travel rewards cards at the moment? Are you keeping them, or what is your strategy?

Comments
  1. AF on Prestige was due last month

    Only a weak offer for bonus points on spend, and it’s a sock drawer card for me if not doing hotels. I had a on of hotels booked for 4th night free through Aspire. The good news there is you can keep rolling those reservations into the future. So I reluctantly kept them. But I”m putting my spend on my Hyatt card.

  2. Our Citi AAdvantage Executive MC recently came up for renewal. Nothing proactively offered, and when asking for a concession was told no.

  3. I’m a Canadian Amex Platinum cardholder and the Membership Rewards points are doubled until July 20, 2020. It’s not clear, however, if it only applies to base points (at 1x accrual rate) or if it also applies to other categories (e.g. restaurants are usually 3x, are they now 6x?).

  4. I was planning on cancelling my prestige card this year due to loss of 4th night free. 5x on dining was something to consider but they’d have to bum it up to 25x at this point for me to pay my renewal fee next month.

  5. “Our Citi AAdvantage Executive MC recently came up for renewal. Nothing proactively offered, and when asking for a concession was told no.”

    This is disheartening – I just paid the $450 fee in March – and now have absolutely no travel planned for the foreseeable future – I tried to reach out to them through the website – and it was met with a generic email about no late fee for late payments – but nothing about the annual fee – credit, extension, nothing. $450 is a huge AF for the Admirals Club – which is the only reason I have this card – no travel, no A.C. – no fair. At least they could offer (Like AA did) to extend an extra year – heck, I’d be more than happy with a 6 months extension. —- The only reason I am keeping the card at this point is the dollars spent now count towards the million mile total, and I am only about 30k short of MM. So I will use it towards that – then probably close it out.

  6. I called yday after my annual fees posted on my Chase IHG card and BoFA Alaska card. Response is same from both banks. They are saying they cannot reduce the annual fee because I am still getting a free IHG night and Alaska companion pass and checked baggage allowance. For now I am not worried about these low $49 and $75 fee but my Aspire Amex $450 will be posted soon.

  7. Called today to Chase about my annual fee due this month for my Sapphire Reserve card and asked if there was any retention offer other than the $100 annual fee credit and they said no there’s nothing else being offered for renewing the card. Didn’t cancel yet but have a couple more weeks to decide on what I should do.

  8. @Colin Z – I’m in the same boat. The only reason to have this card as opposed to the Citi Gold Card is the AC access. Right now there are no ACs open and there likely will not be for some time. Citi needs to step-up. Otherwise I’m dropping it to a Gold card.

  9. Cancelled the CSR before they offered the $100 credit. Their quit-save was to offer me a $100 credit, and even at $450, it didn’t feel worth it.

    Card issuers don’t seem to be ahead of this game. This is the biggest economic upheaval in 30 years, and they want to pretend that it’s business as usual. They can’t even fix the staffing problems that are resulting in 2 hour + hold times… you would think there’s some sense of urgency here.

    Will be cancelling both Amex Gold and Plat. Given that they killed the gift certificate workaround and Grubhub/Doordash/Uber eats pay 1 point per dollar, these cards have had negative ROI this year for me.

  10. Primarily an Amex user and several AF’s paid recently or due soon. I downgraded one card and got generous points offers with NO spend requirement to keep the others. All in all, I’d say it was fair, given how exceptional (and hopefully temporary) these circumstances are.

  11. @Colin Z-I cancelled mine early this month when the annual fee came due. The phone rep made no effort to encourage me to keep it and shared that she had been advised by her supervisor to expect cancellations and no retention offers had been authorized.

  12. …and just to add, I waited for all AFs to post before calling in to their retention divisions. It’s been my experience that credit card companies are less likely to negotiate until after the fee has been assessed. And keep in mind you can generally cancel a card up to 30 days after the AF is charged without having to pay the fee.

    For those who are not having luck with their cc issuers, consider waiting until after the fee has been charged before calling in to explore your options.

  13. My CSR is due in September, I messaged Chase to see about the $100 credit and was told no. I’ve planned to downgrade the card but the $100 credit would keep me around another year, but I don’t think Chase cares 🙂

  14. I just downgraded my Amex Business Platinum to Business Gold and my Personal Gold to Everyday. The Amex rep that I spoke with didn’t even make an attempt to convince me not to downgrade.

  15. I got the United Club Card with 75K sign up bonus on March 1st.. Chase said I have until May 3rd to cancel get get my annual fee of $450 back. I already hit my 3K spend. So will see if miles deposit in my united mileage account, and cancel the card. Paying 450 for a credit card that I got for lounge access is useless this year. The travel I planned with *A was always cancelled.

  16. Like many here, when fees come due, I will likely cancel many of the cards. If I’m not traveling they are largely worthless and many have features that are redundant. For example, Hilton Aspire (can get gold status from many methods and diamond hasn’t gotten me anything special).

    Unless you are MS on the cards, most people don’t get value out of them. Citi AA card gives you lounge status which isn’t even open now, what is the point? In most cases you could always apply in a year or two, or may realize you don’t use it enough to need the card.

  17. I called to cancel my Amex Plat two days ago, and they offered me a $500 credit. I did not cancel since that almost pays for the $550 due next week.

  18. Lucky, a point that has come up here in comments regarding Lounge access is worth a whole story. What about those of us that paid for SkyClub with points, and now we can’t use the lounges. Not only that, but Delta closed most SkyClubs, including my home airport, Orlando International (MCO). Others will have paid cash, instead of the annual card fee. Are there any plans from ANY of the airlines to extend lounge benefits, like they have done on status?

  19. Like others reported here, I received either no or very meager retention offers for Citi AA Executive MC, Chase Hyatt, and AmEx Marriott, so cancelled all in recent weeks. Both IHG cards are coming up on renewal shortly but will probably keep those (especially since the $49 one is now irreplaceable). The question will be the ones with large annual fees coming up this summer, namely Aspire, CSR, and AmEx Platinum. I’m inclined to cancel all of them without some meaningful incentive because they are no longer at least breaking even.

    With both business and personal travel plans significantly cut for the foreseeable future (possibly years), and with an ever-increasing pile of unused points and miles, it no longer makes sense to pay most of those annual fees, as it will now probably take me several years to work though all those points/miles–or even longer if cash prices remain so low that using miles would be a poor value.

    In the current environment, cash back cards seem to be the most sensible option. $100 in hard cash that I can use today vs $150 worth of hotel/airline point that I realistically won’t be able to use until 2023 or 2024 or 2025 (and that’s assuming no point/mile devaluations) seems to be the classic example of “a bird in the hand…”

  20. There is going to be a lot of resentment from those of us who use our travel cards because of the travel benefits, but in this case I mean the trip interruption/cancellation insurance, and right now at least Chase is doing NOTHING for those of us who had flights/trips cancelled interrupted. If you dispute an airline charge they tell you to talk to the airline, if you file an insurance claim they just automatically deny it. I specifically put my flights on my CSR card for the insurance, and when it’s actually needed we’re told to pound sand. It’s inexcusable.

  21. My wife and I both have CSR credit cards. My annual fee posted this month, my wife’s will post next month. We decided to cancel my CSR and keep hers for now.

  22. I have Amex Delta and Chase United cards. The Amex literally just came up for renewal and similarly, they did nothing.

  23. Honestly, just cancelled my amex platinum. Don’t use uber or sacks, so without travel to take advantage of the travel benefits it just doesn’t make any sense. Retention offer was points for more spending, which just isn’t a good fit when considering the opportunity cost of not putting that spending on other cards and the fundamental issue of paying $550 for benefits we aren’t using.

  24. @Ben — Would you consider doing a roundup of cancellation rules on different credit cards and who offers a pro-rated refund on annual fees and who doesn’t? Also, I know some cards are within 30 days of the annual fee posting and others are 60 days or 90 days.

    One last quirk that I’ve barely seen covered anywhere that would be FANTASTIC to see more of an in-depth breakdown on is the state of Massachusetts has some type of consumer protection law that quires credit card companies to refund I believe 2/3s of the annual fee even if you cancel 10 months or 11 months into the year for anyone that is a Massachusetts resident/MA billing address. Amex abides by this rule but other banks such as Chase don’t seem to (at least they haven’t for me and I’m an MA resident). Would LOVE to understand how Chase and possibly others are getting around this loophole.

    Thanks!

  25. Cancelled Amex platinum after a lame retention offer and gleefully downgraded my Citi prestige for the new improved spending categories of the Citi Premier.

  26. Most of my annual fees are coming up in the next few months. I spend on most of my high fee cards and get value out of the spend bonuses, and I expect to travel in 2H20, so I am keeping most of them for me.

    Amex Plat/Gold – I still use the credits (Uber Eats, Saks, Grubhub), and Amex Gold is my main card for grocery and dining, so I am keeping these cards
    Hilton Surpass – Downgrade or cancel
    CSR – Likely a downgrade to CSP
    CapOne Venture – Likely a downgrade
    Delta Reserve – Keeping for MQM spending bonus
    Will look at downgrading/canceling AA, Marriott cards as well

    In the meantime, look at applying for cashback cards with no fee. Citi Double Cash, CapOne SavorOne, even the Apple Card is 2-3% cashback on all Apple Pay spend for no fee.

  27. Just called Citi and was told they are working with AA to come up with a solution for club membership for Citi AA Executive Card. No idea what that would be or when a decision would be made. My payment is not due until 5/10, so I’ll give it some more time before deciding what to do. Personally, the most appropriate solution would be to have the fee paid in 2020 count for club membership through your renewal in 2022. Basically pay now and get two years of membership.

  28. As I’ve repeatedly posted here, I’ve been so eager to dump the Amex Marriott card and kiss Marriott goodbye forever. Will be eager to see if they waive the AF when it renews or I just cash out all the points and use them on AA/OneWorld

  29. I plan to take issue with the CSR annual fee this year. Expedia runs its travel portal and they are 100% unavailable to help me. I need to make an agent-assisted reservation with my points and the phone system is programmed to hang up on those types of calls.

  30. Downgraded CSR and two Hilton Aspire cards to no fee. Was not offered anything by either to keep any of them.

  31. I’d like to know the rules of various banks and cards for how long one must wait to get new signup bonuses after cancelling cards. I know AMEX only allows one time signup bonuses on its cards. I started thinning the herd last summer and I just cancelled a few more which were travel cards with fees due. Hoping when the travel industry recovers, whenever that is, there will be new cards and opportunities. In the meantime, I’m at an all-time low in Annual Fees.

  32. I’ve been trying to get a retention offer on my Citi Premier that just renewed – but I can’t even get transferred to retention when I ask to cancel. Have tried a few times, the agent puts me on hold for 5 min, and comes back with ‘account specialists are all busy’. I’ll probably try one more time and then downgrade it to a Preferred if I can’t get a reasonable offer out of them. My Prestige is coming up in July and barring some huge concession from Citi, that will get cancelled. Hotel cards I’ll keep as the certs are worth the admission price and have a lot of runway to use those.

  33. The comments seem to be pretty unanimous. I’m wondering how many will regret cancelling their cards once travel resumes. Seems to be a rush to judgement…

  34. In Germany, Amex Platinum card holders were offered 41k Membership Rewards as a consolation that one cannot uses lounges etc. This was later dropped too 20k MR. Others got 3months off the monthly charge of €55 (€660p.a.)

    Earning MR was also doubled to 2MR (€1=2MR).

  35. Sure would be nice if issuers offered a “suspension” status so that one could pause then reinstate a card without any hard pull or change in terms.

    Does anyone know if downgrading an AmEx within the first year of membership will trigger a RAT shutdown of clawback of the signup bonus?

  36. I got a great deal from amex platinum. Called to cancel as the AF was due. Basically was told to pay the fee and then they would refund it so platinum is free this year! And the refund hit within 7 days of paying.

    Note: I’ve been an Amex card holder for 20 years. Just sharing in case that matters?

  37. I spoke with Citi this week regarding Prestige AF – no retention offer made but rather explained options to downgrade. Issue with canceling is using up TY points within 60 days – looks like there are various non-travel options and since no travel redemption kicker (like CSR) you aren’t losing value. Note, you have 37 days after AF billing date to ask cancel and receive refund.

  38. I don’t see why cc companies should suspend AF/offer other incentives, their business are as much impacted as other businesses in the current situation. We might even see the end cc bonus

  39. Apparently it all depends how you ask. I have Amex Blue Cash Preferred, which isn’t even a “travel” card. I called and asked about the possibility of having the AF waived this year. The rep couldn’t “waive” it, but he was able to give me a miscellaneous statement credit that canceled out the AF ($95). Another reason I will be an Amex customer for life.

  40. NO to the discount! If you can’t afford the card drop it and leave it to those of us with sufficient funds. If $550 a year is too much for you (and I have multiple cards that cost this much) then PLEASE leave them to those of us that can. Hopefully a byproduct of COVID will be to get rid of the riff raff that got these cards the past couple of years who really shouldn’t have had them!

  41. I’m really interested in what people are doing with the Chase Reserve. Mine renews in September, I travel so much and spend exclusively on this card so the annual fee doesn’t phase me. At this point, the heavy annual fee is really bothering me and I may just cancel the card. I really hope Chase steps up to do something to help us out.

  42. When bloggers suggest changing to a no fee card they fail to mention something very important.

    With Citibank – a product change is the same as a cancelation.

    I fell for Citibank’s (deceptive) mailing to convert my long idle Citi Preferred to a Citi Cash card.
    No where was it disclosed Citi regards a product change they initiated as closing a Citipoint card.

    Citibank will not let you get a signup bonus for 24 after receiving a signup bonus or 24 months from canceling a product in same reward category (Citipoint, AAdvantage Miles, etc)
    I am therefore now blocked from getting signup bonus on any Citpoint card for 24 months.

    Always ask and get permission to record any phone call to Citibank. Citibank says that calls are recorded. But when an agent misquoted a retention bonus offer on my Citi Prestige I was told that a manager would review the recording. Several requests were made over chat for the status of the investigation. Finailly, my certified letter got a reply saying that all calls are not actually recorded and even if so they would not pursue the matter.

    Doing business with Citibank is like going to a whorehouse. In spite of the businesses shady reputation you are there for something you want, which in this case is points to transfer to airlines. But you should have no expectation of honest and ethical treatment. This comparison is not intended as insult to whores.

  43. Called last night regarding the fee on my Aspire. No retention offers but was told I definitely could upgrade again later so I downgraded to the no fee card. Now to see if status is downgraded or not based on COVID policy changes.

  44. I also have the Aspire card which is due for renewal in June. The only way I will keep this card is if Amex agrees to extend my unused free night. Otherwise, I have no use for the card as being HH Diamond these days means nothing and all of the other goodies are travel based and duplicate my Amex Business Platinum (which may likely go too).

    CC Companies need to wake up! Their customers are in a crisis which is the time to step up. After all, CC’s are a dime-a-dozen. They need us far more than we need them. I would not be surprised if, adding up all of the annual fees for every card we have, most of us barely break even on benefits over time. It is all pricy smoke and mirrors.

  45. Why would you keep an annual fee card, when your travel is restricted?
    Downgrade or cancel, unless you get a good offer, then apply in 12, 24, or 48 months for a signup bonus.

  46. I have had the Aspire card by upgrade for about five months. I paid the first full annual fee in March. I went ahead and paid. I was wary of the ramifications of downgrading that soon. I also still have the weekend night award from signup, and the additional one should hit soon.

    If nothing else comes to offset the cost come next AF I may downgrade. I’ll review the value for the year just like any card. I won’t be grading on a CURVE to factor the effects of COVID-19. If turns out not to be worth it this year, they won’t get the AF next year.

  47. Called Citi ref: Executive (Admirals Club) MC which, for me, renews in Jun, to ask if there would be any adjustment in AF ’cause of no Admirals Club access currently. Told not at this time but to call back later. Sounds like the best approach would be to pay the fee and then ask.
    Lucky – we need a summary of cancellation periods for each cc (30 days? 60? Or???).

  48. Called on our Amex Platinum, said I was considering canceling since I couldn’t use the benefits this year. They offered a choice between a $500 credit or 50,000 points. I took the points because I can yield a much higher value out of them when transferring to an airline partner for premium class redemption. I have only been with them for one year so this was an incredible offer and obviously kept us as customers. Totally worth the 30 minutes spent on the phone!

  49. @John Stewart

    You are assuming banks and credit applications will have no impact from this event. But I do think it’s worth considering your entire card portfolio.

    Maybe not all cards are worth keeping. But I do agree it is harder to justify multiple $450+ AF cards without much spending or using perks.
    Amex Platinum is useless. (except to chop Zucchini).
    Citi Prestige isn’t extending the 4th night benefit booked before the cap, but still worth the x5 on food if you eat a lot.
    CSR is as useless as Amex.
    DL Reserve no need spend as status is extended, maybe for MQM.
    Citi AA is useless without AAdmirals Club.
    UA Club Card is useless without United Club.
    Hilton Aspire, not worth if you only get the free night.
    Bonvoy Brilliant not worth if you only get the free night.
    For people who (used to) travel a lot, that’s over 3k on AF without getting any benefits.

    The cards to charge these days, Citi Prestige for food and the rest on a ‘no fee’ BofA cash reward.

  50. What about Hotel branded cards like the Hilton Aspire? With hotels closed worldwide, that’s actually really not worth $450. Whereas at least some of these cards those who can travel can get some benefit like travel insurance.

  51. Got hit with $125 annual fee for Marriott Bonvoy business card this week. I spent $3500 on it during the past year, almost all of it hotel stays. Called to cancel and was not offered any incentive to hang on to it. Done.

  52. Today I received a $70 statement credit on my Amex Plat card for “airline fee reimbursement”. I wasn’t expecting this and it was a nice gesture as I haven’t traveled and don’t forsee any upcoming travel to make use of the $200 airline credit.

  53. @Disco Dave

    I hate to break this to you but $3500 isn’t really substantial spending (it isn’t part of the signup bonus spend requirement right?). And your free night certificate should be enough for them to charge your annual fee. Especially in times like this, be fair to each other not greedy. If Marriott collapse that is another story.

  54. @B – I’ve seen that rumored. But I don’t see the usual “earns 4x per dollar spent” when I look at my transactions for GrubHub. Are you seeing they post as 4X?

  55. My Citi Aadvantage MC (Exec Elite) just renewed. Only reason I have it is for Admirals Club access when I can travel. I called Citi today and given 2 options: 1) cancel the card and they will refund the $450, and 2) change to a different credit card product and they will refund the $450 but cannot come back to the Aadvantage Exec Elite MC for 12 months. Then suggested it would be best if I called Admirals Club directly to see what they could do.

    Which I did, and Admirals Club person taking call said I was 3rd or 4th person calling today about the same issue. They seem to be collecting names and contact info and seems like it was under discussion at their management level. So, I guess I will hang on for a bit and see what happens. Since travel for rest of this year is questionable and unclear to what extent, would be great if they could just extend the card membership by 1 year.

  56. @AC,

    I don’t think you’re a troll…lol and I agree with you completely. How many articles are out here saying, if you can’t afford the fee, then don’t get the card. If you don’t want to pay the fee, then cancel and go on your way, but stop whining about what you think you deserve. The wife and I have one Amex Plat and Gold, one each Delta Reserve and Hyatt, one United and one CSR. That is a good bit in fees, but I’m looking to the future and not short sighted because of what I think I deserve.

Leave a Reply

If you'd like to participate in the discussion, please adhere to our commenting guidelines. Your email address will not be published. Required fields are marked *