How To Get Rid Of Annual Fee On Credit Card?

By Bruce Boswell •  Updated: 12/14/21 •  6 min read
Filed under: Credit Cards

So, many of us have been in this situation. We’ve taken out a credit card because of its excellent benefits, we’ve barely used it, and are now faced with an annual fee on a card we don’t use.

Or in some cases, we do still use the card, but really dislike the high annual fees attached to it!

How To Get Rid Of Annual Fee On Credit Card

For those of us who have more than one credit card in our name, these annual fees can really add up, and even leave us in a negative balance. This additional financial burden can outweigh the benefits of having the card in the first place.

So, is there a way to get rid of the annual fee on our credit cards? In short, yes it is possible! There are a number of ways we can approach removing an annual fee from our credit accounts. Whilst this is not guaranteed, they are certainly worth a shot.

Speak To Your Lender

The first and most obvious approach is to simply just ask your lender! 70% of customers who approached their credit card lender and asked for their annual fee to be removed, were successful! Yet under 20% of people even ask the question!

Many do not realize that the option to request the removal of their annual fee is even possible. 

Ask the credit  card representative politely if they are able to help you with your request. Explain that whilst you value your credit card, the annual fees are having a detrimental effect on your finances.

Detail Your Loyalty

If simply asking for your annual fee to be removed is unsuccessful, then you can move on to some gentle negotiation. This element is only an option if you have been a customer for a number of years, or use the card regularly and keep up with payments. 

Explain in simple terms why you are their ideal customer.

Have you stayed with them for a number of years? Have you recommended them and their services to friends and family? Or do you simply use the card regularly and make payments on time and in full?

Reasons such as these will highlight why this credit card provider needs you as a customer  and not the other way around.

Compare The Market

It can be worthwhile having a detailed look at what products are available from your current card’s competitor’s prior to your discussions with them.

By knowing what products are currently available from other providers, you will be able to leverage a better deal on a match for match basis. 

Being aware of the products currently on the market, you will be able to use this information to negotiate why you should be receiving a better deal without having to change providers entirely. If there’s one thing credit card companies dislike the most, it’s losing customers to their competitors.

Inquire If There Are Any Incentives

Whilst waiving your annual fee outright might not be an option, there may be alternative ways to offset your annual fees. For example, some credit card providers may offer to waiver their annual fees, if you are able to fulfil an alternative offer.

For instance, by increasing your monthly purchases by a set amount. 

This option is suitable for customers who use their credit card on a very regular basis and pay off their balances on time and in full. This option should not be considered if you would be increasing your outgoings to reduce an annual charge, but in actual fact be spending more overall. 

Threaten To Cancel Your Card

If you are coming to the end of your annual term, then it may be an option to issue your credit card provider with an ultimatum: waive your annual fees or wave goodbye to your custom!

Whilst this option is a slightly Russian Roulette approach, credit card providers will not want to lose valued customers, and so they could fall for this demand. 

However, you should also be prepared for providers to actually agree to close down your account at the end of your term. If you do not want to lose your card, or you are not in a position to repay the final balance in full, then this is not the route to pursue!

Similarly, since closing credit card accounts can have a negative impact on your credit score, this is not a good choice if you really don’t want to cancel your card!

Switch To An Alternative Product

If at this point you are not having the desired result, and your annual fee is very much still in place, it will be worth looking at your alternative options. Ask your provider if they have any other credit cards available that you could switch to.

Your provider will be much happier to transfer you to another one of their products than to lose your custom entirely.

Weigh up the pros and cons of transferring to this alternative card. Does it not have annual fees but a higher APR? Does it have the benefits that you currently have? Will it be suitable for your needs and requirements? 

Only transfer to another product if you have adequately researched the alternative card and 

its specifications. You do not want to end up in a worse financial situation to avoid a one off annual fee.

Final Thoughts

Credit cards which include annual fees as standard can be a great cause of frustration, particularly if you barely use the card, or similarly if you use it so frequently you begrudge the additional cost.

Whilst there is no guarantee that you will manage to have your annual fee waived, it is by no means impossible to do.

You may not end up with the removal of the fee entirely, but by openly communicating with your credit card company, you could end up in a better position with an alternative product.

It is also worth noting that whilst annual fees can be a cause of annoyance and a financial drain, you should consider what these fees are for. Are there a range of fantastic rewards associated with your card that you wouldn’t want to live without?

Would downgrading your product have a negative impact on your finances in the long run? If that is the case, then perhaps staying as you are is the best option. You can always attempt the whole process again at your next annual review! 

Bruce BoswellBruce Boswell

Bruce Boswell

Bruce Boswell enjoys researching and writing about all things related to investing and saving money. Whenever he has a chance, Bruce loves travelling all around the world with his wife and trying new foods.