The age of each credit card account. We try to keep a card open as long as possible. Obviously a no annual fee card is easy to leave open. Usually it becomes a ‘sock drawer’ card. Only comes out if there is some spending bonus I can use it for. Otherwise it collects dust. Annual fees can chew into your bottom line quickly. About a month before an annual fee is due I’ll start the card analysis. Main question is, do we get enough benefit from the card to justify the annual fee?
First, I’ll call the # on the back of my card and ask for a ‘retention offer’. The first agent may be able to tell you or they might put you through to a designated agent that strictly deals with that. When you call, say your annual fee is coming up and you were wondering if there were any retention offers available to retain your business. DO NOT call in and say you are thinking of cancelling your card. There have been instances where a bank (Citi) has automatically closed accounts. I’ll call in even if I know I plan to keep the card. I may get some extra points, fee waived, cash credited, or some type of spending challenge. For example, they may offer me ‘x’ if I pay the annual fee if I spend ‘y’ amount by ‘z’ date. Doesn’t hurt to ask.
If I know I don’t want the card and I get no decent offer to retain it then I’ll ask to downgrade to a no annual fee card if possible. The bank doesn’t consider this closing the account, just changing to another product. They will then send you the new card and the card’s history stays intact. If I don’t get a good retention offer or I can’t downgrade I’ll seriously consider holding it or simply close it. If I know a card is only good for the sign up bonus I’ll wait at least a month before the annual fee is due to call in and cancel. Best to call in for retention offers around the annual fee due date.