Can You Negotiate a Credit Card Annual Fee?
Credit card annual fees are charged every 12 months, and cost an average of $147. Here’s how to request that a credit card annual fee be waived or lowered.
May 10, 2022
Credit cards are very common in American households. In fact, around 70% of the U.S. population carries a credit card — and around 34% carry three or more credit cards.
But credit cards can get expensive.
And there are other costs associated with using credit cards. Namely, the annual fee.
Is it possible to negotiate a credit card annual fee, or to get it waived?
What are credit card annual fees?
Annual fees are mandatory fees charged every year by the card provider or issuing bank.
This fee is charged regardless of how or when you use the credit card. The fee does not relate to your spending habits — it’s a flat cost that every card member must pay each year.
The annual fee is added to your statement balance approximately every 12 months. These fees go directly to credit card issuers.
There are other fees associated with credit cards, but annual fees are typically the most significant.
Average credit card annual fee
Many cards have no annual fee, but for cards that do, the average is around $147 per year.
Credit card annual fees can range from $0 to $600 or more, depending on the card.
On the high end of that spectrum are generally travel rewards cards, which offer generous perks. But many cards with moderate annual fees ($25 to $100) have minimal perks.
Can you negotiate credit card annual fees?
In many cases, yes.
Some cards will always have annual fees. However, many card issuers may be willing to waive these fees or refund fees that have been charged recently.
This is because annual fees are not the only way that card issuers make money. Their main profit center is interest charges when you carry a balance.
Card issuers will likely still make money from having you as a customer, even if you don’t pay the annual fee. For this reason, some issuers are willing to waive or lower annual fees.
How to get a credit card annual fee waived
Note: “Waived” means “refrain from applying a fee.” It basically means “remove,” in this case.
To get your credit card annual fee waived or lowered, you will need to contact the card issuer. This is the bank that issues the card, e.g., Chase, Citi or Capital One.
The best way to do this is typically by calling the customer service number on your credit card. You can also try email or secure messages, but calling is generally the most efficient.
Here’s a step-by-step guide on how to get a credit card annual fee waived.
1. Wait until around the time the annual fee will be charged
It’s most effective to wait until the annual fee is about to be charged or has recently been charged within the past 30 days or so. These fees are charged around your card-member anniversary (about every 12 months after you originally applied).
You can typically wait until the annual fee actually shows up on your account statement. Most credit card issuers give you around 30 days to request a refund after the fee posts to your account.
To be safe, try to call your card issuer as soon as you notice the annual fee — or as soon as you know that it’s likely coming up on your next statement.
2. Call the number on the back of your credit card
Next, contact your card issuer by calling the phone number listed on the back of the card.
When you reach a representative, explain to them that your annual fee has been added to your account and that you would like to request that it be waived.
It’s best to start asking for the fee to be waived completely, rather than lowered. In some cases, the representative may be able to reduce the fee, but not waive it completely. But if you don’t start with asking to cancel the fee entirely, that option likely won’t be possible.
Remember to be respectful on the call, even if the representative is unable to help you with changing the fee.
3. Explain your reasoning
You’ll need to come up with a reasonable explanation for why you would like the fee to be waived. Here are some perfectly good reasons:
“I don’t use the card’s benefits and they are not worth the cost to me.”
“I have another credit card that offers the same benefits.”
“I do not use the card.”
“The annual fee is too high, considering the benefits I get from the card.”
“I am considering canceling the card to save money.”
“I have fallen on difficult financial times and cannot afford this fee.”
Any of these reasons could work — pick the one that is most relevant to you or explain your own personal reasoning.
4. Consider canceling the card
If the representative is unable to lower or remove the fee, it may be time to cancel the credit card.
And often, just saying that you are considering canceling might help you get the fee waived.
When you say that you would like to cancel a card, many banks will transfer you to the retention department. This department is tasked with trying to keep you as a customer. They often have more power than front-line phone representatives.
If you explain that you will likely cancel the card unless the annual fee is waived, the card issuer is more likely to waive or lower the fee.
Again, remember to be kind and respectful to every representative you talk to.
Yes, it’s often possible to negotiate a credit card annual fee. It won’t always work, but it’s typically worth the few-minute phone call to try.
†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. Based on your credit history, the APR (which is the same as your interest rate) will be between 7.90% - 29.99% per year. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.