How to get a retention bonus for your credit card

For many people, signing up for new cards is probably the best way to earn points and miles. However, if you sign up for a card just for the bonus, you’re always in a catch 22 situation once the annual fee hits. Should you keep or cancel? There’s another option. You can call the bank and request a retention bonus. If successful, you can end up with a nice chunk of points or a statement credit for simply renewing your credit card for another year.

CREDIT CARD RETENTION BONUS REQUEST

Before we get into the details of how you should put your case forward, let’s get the basics out of the way. The main purpose here is not to just call and ask for free points and statement credits. Banks make money because of the business you offer. The goal of your conversation is to request them to provide you with an incentive or a retention offer, in order to keep your business.

PROVE YOUR VALUE BEFORE ASKING FOR A RETENTION OFFER

When you call in for a retention offer, you need to strike the correct tone. Explain to the rep how you are a customer in good standing. Following that, clearly outline any problems or shortcomings that you think the credit card has. The more specific and genuine your concern, the more likely you’ll get a positive response.

KEEP IT SHORT AND SWEET

Most banks have retention departments that have set budgets. It’s always best to lay out your case in the most succinct way possible. Always make sure you have a few talking points ready, so that you can make your point clearly.

HUCA

Hang Up, Call Again or HUCA is a common tactic. Very often, the first representative may not be able to help you out with a credit or some extra points. In that case, you can always politely end the call and call back at a later time.

THE SCRIPT

I’ve previously written about how I’ve received lucrative offers for credit cards during the time of renewal. I’ve had the most success rate with American Express, especially on their high annual fee cards like the Amex Gold and Amex Platinum. A few years back, Amex waived the entire $595 annual fee on my Business Platinum card by giving me a $595 statement credit.

Here’s how I usually structure these calls. You can replace the bank name and card name and tailor this to your situation.

Me: Hi, I just logged into my account and saw that the annual fee was charged to my card. I’ve been a customer with [insert bank name] for over 10 years now. However, I’m not sure about whether I should renew this card for another year.

Rep: May I know the reason why you’re considering this?

Right after this, you may usually see the rep read a laundry list of the benefits of the card. This is their first move. At this point, the rep is looking to see if you can be convinced to renew the card without them having to offer you any renewal bonus.

Me: Yes, while I love benefits X and Y, I just read that benefits A and B are being reduced. Also, I’ve changed my travel patterns, so I’m no longer in a position to fly with Airline C. As a result, I’m not able to fully utilize the rebates and credits on offer.

Make sure that your reason for cancellation is specific and clear. At this point, you’ll probably get a first hint of what the bank wants to offer you.

Rep: Thanks for being a customer with us since XXXX. We really value your business and would like to offer you 10,000 points. Let me know if this works for you and we’d be happy to keep your business for another year.

At this point, it’s your call whether you want to take the initial offer or play hardball. There are pros and cons, depending on which option you choose. If you’re looking to get a better offer, you can always politely ask if there’s a better offer available. In my experience, I’ve received some pretty good retention bonuses at the first request, especially from American Express.

THE PUNDIT’S MANTRA

Retention offers can go a long way in alleviating some of the burden from a high annual fee credit card. While all issuers may not be offer a retention bonus for their products, it never hurts to ask for the best possible retention offer for your credit card.

Have you received a retention bonus on your credit card off late? Tell us in the comments section.

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