Sunday, May 18, 2014

Annual Fee Due? Ask for Retention Bonus

This isn't breaking news, but it's always worth repeating.

The annual fee for my wife's Citibank American Airlines just posted.  It is an $85 annual fee. Obviously, I didn't want to pay that.  I still want the card open so that I can get the benefits of the card, like a free bag, but I don't think it is worth the annual fee.  

I called up Citibank and told them "I would like to cancel my card because I don't want to pay an annual fee."  I was put on the line with someone from the retention department.

The Offer

I was immediately offered a $95 statement credit (the price of the annual fee + $10) and  1,000 bonus miles every month for the next 16 months if I spend $1,000 in that month.  If I spend right around $1,000 every month for the next 16 months, I'll get 16,000 total bonus miles on top of the regular 16,000 miles for spending $16,000 miles for a total of 32,000 miles.


This is not an overwhelming bonus by any stretch, but it's a nice deal.

That being said, I will probably spend the $1,000 every month that I would have normally put on my Fidelity American Express.  Instead of $320, I'll have 32,000 miles, more than a third of the way to a free round trip ticket to Israel.

Moral of the story, always ask for a retention bonus.  You might not get one, but who knows.