When you go to close credit cards be prepared for the card issuer to offer you a retention bonus. This may be in the form of miles or credits to your account to offset the annual fee partially or wholly. Think about what you’d be willing to take as a retention before you call. There are certain cards that I am willing to do more for than others. As I’ve mentioned before, the Starwood Hotel card is one that is very valuable. The annual fee is lower than most cards at $65, but it was raised to that this year from $40. The points that you earn from this card are very flexible. You can use the points for hotel stays at Starwood hotels (Sheraton, Westin, etc) or transfer them to airline frequent flyer points. When you transfer 20,000 to an airline program, you get a bonus 5,000. This is why most people that play this game consider them the most valuable.
Today was my day to call and cancel cards that are almost up for annual fees. I had one Starwood and one American AAdvantage card that were up. I really didn’t want to cancel the Starwood, but I also didn’t want to pay the annual fee. I was just hoping that they would do something to lower the cost of the card or give me miles. Now I’m not a big spender on this card, so I wasn’t sure that they would offer me anything. But they did offer me a $25 credit to stay (which lowered the fee back down to what it used to be). I was happy with that, so I took that.
When I called to cancel the American, I also was not expecting anything. I opened this card to get the sign-up bonus. I only spent was I needed to to get the bonus. It wasn’t up for the annual fee until September, but I called now because I just wanted to get some of the canceling out of the way. They first offered me an extra bonus of 10,000 miles if I spent $5,000 in 6 months. That’s not worth it to me so I said no. They then offered me 2,500 miles just to keep the card open. I asked if I had to keep it open for a certain amount of time and they said no. I took that and will call back and cancel in September. So a free 2,500 miles for about 5 minutes of my time – not too shabby.
Obviously they are hoping I won’t remember to call back. That’s why it’s important to stay organized with your applications. I keep a spreadsheet of all the cards I applied for, when I applied for them, what the bonus is, what the minimum spend is, and what the annual fee is. I check it on a monthly basis to see which cards I need to cancel.