While so-called premium credit cards can be a great way to earn rewards points, they often come with costly annual fees. You could end up paying $100 or more to your credit card issuer just for the privilege of using your premium credit card. While a premium credit card may make sense for big spenders (i.e. you take care of all the shopping for your family), the annual fee can easily offset the higher reward points you’ll earn. The good news is there are ways to get your credit card issuer to waive the annual fee.
Why sign up with a credit card with an annual fee when there are so many great credit cards out there without any annual fee? Credit card issuers know many people are hesitant to sign up for credit cards with annual fees. To entice you to sign up, many credit cards waive their annual fee for the first year as a sign-up bonus. You can still enjoy the same great perks as a premium credit cardholder without paying the hefty annual fee for the first year. What’s not to love?
While some premium credit cards will waive the annual fee, others will offer you a juicy sign-up bonus just for being a new cardholder. For example, you may receive 20,000 reward points as a bonus for signing up – that could be worth $200 in cash, more than your annual fee! All the bonus rewards points you earn after that is like icing on the cake!
If your credit card issuer was nice enough to waive the annual fee the first year, don’t count on it next year. While you may have earned points galore without an annual fee, a premium credit card might not be worth it if you have to start paying $200 a year to your credit card company. Consider calling your credit card issuer a month or two before your annual fee is supposed to kick in. Point out you’d like to keep using the credit card, but you’re not a big fan of the annual fee. Your issuer might be willing to waive the annual fee on the spot. It doesn’t hurt to come armed with research. For example, if your issuer or the competition is waiving the annual fee to new applicants, mentioning it can only help your case.
If your issuer refuses to waive the annual fee, it may be worth jumping ship to the competition. If a rival credit card is waiving the annual fee for new applicants or offering a sign-up bonus, why not take advantage? Just keep in mind that changing credit cards too often could affect your credit score, so consider that before signing up for a new credit card and ditching your old one.