I got in on the 100K British Airways Visa offered last summer. That card has gotten me first class flights throughout South America, round-trip from Seattle to Alaska and has still left me with enough points to take 11 round-trip flights between my home-town airport, CLE, and Chicago/DC/NYC, given all are under 600 miles from my hometown airport.
Having said that, the card earns 1.25 Avios per dollar spent with very little other benefits. I can effectively earn 1.25 miles per dollar spent with my Starwood Preferred Guest card, with much more flexibility, and my annual fee of $95 was coming due. What to do in these situations? There are a few options:
The first is to consider what benefits you receive for keeping the card. My $95 annual fee on my Hyatt card gets me a 1-night certificate at category 1-4 Hyatt Hotels. That’s easily worth $95 and in many cases worth $100-$200 more. So I will keep that one. If the benefits do not outweigh the cost, you will want to take the following steps to try and get the best value out of your card:
- Call the credit card company and ask what benefits you would receive for paying the annual fee and renewing the card. If there are few benefits, such as in this case, you can let them know that you aren’t sure those benefits are worth the fee. At this point, they may offer a “retention bonus” for keeping the card. This can be in the form of additional miles/points or a reduction/elimination of the annual fee. Once offered a retention bonus, you will have to again weigh the cost of the fee vs. the benefit offered.
- If you decide you no longer want the card, you have two options:
- Ask if you can downgrade your card to a different card that doesn’t have an annual fee. There are multiple reasons to do this:
- You get to lengthen your average age of accounts which will help your credit score.
- You get to keep the credit line and card, which can be used in a future negotiation process. For example, in January, Chase told me they didn’t want to approve me for a card because I already had seven different cards with them. In the end, I closed my United credit card with them to get approved for the card I had applied for.
- Your credit line stays in tact, which also helps you lower your utilization rate and improves your credit score.
- You can cancel your card. Note: IF YOU CANCEL YOUR CARD, TRY TO SHIFT YOUR CREDIT LINE TO ANOTHER CARD WITH THE SAME BANK. For example, if you have a Chase Freedom card and Chase Sapphire, and you are closing the Sapphire to avoid the annual fee, ask Chase to move your entire credit line over to your Freedom card. This, again, will help with future negotiations on credit card applications for shifting credit and will help your utilization rate.
Some examples of what I have done:
I switched from a Sapphire Preferred Visa to a Sapphire Preferred MasterCard, and by doing so received another year without paying the annual fee
I downgraded my United MileagePlus Explorer to a MileagePlus card to avoid the annual fee. I then negotiated with chase to close the United card to get approved for a different card three months later
I downgraded the BA Card to a non-annual-fee card. I expect to use this card in a future negotiation with Chase
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