Tuesday, October 15, 2013

Obsessive Behaviors And The Retention Department

I just read this hilarious post from The Points Guy this morning, titled "10 Obsessive Behaviors of Miles and Points Junkies". I guess I haven't gone off the deep end yet, since I only exhibit 8 out of the 10 behaviors listed on a regular basis ;)  All humor aside, there are actually some very good miles/points-earning tips in his post.

One I wanted to emphasize was #5, "threatening to cancel a credit card unless they give you bonus points or waive the annual fee". While it may sound like a terrible thing to do, like I'm blackmailing or hostage taking, this is actually a very normal aspect of owning (and disowning) a credit card, and one of the main reasons why retention departments exist in the first place.

I typically do not keep a credit card past the first year if there is an annual fee, unless it provides a truly worthwhile anniversary bonus, such as a free night at a hotel or a decent amount of miles/points. But even if a card doesn't give you any of those things, it is still important to call in and speak to someone if you are thinking about canceling, because more often than not, they will try their best to keep your business.

This is exactly what I did yesterday with my American Express SPG Business Credit Card. I noticed that the $65 annual fee had posted on my October statement, and I immediately called in. Using the automated menu, I selected the option of canceling my account, and was transferred directly to the retention department. From there, I followed a fairly standard script:

  • Even before speaking to anyone, first make sure you have enough leverage, and by leverage, I mean annual spend on the account. The more spend you have, the greater the chances they will provide some sort of incentive for you to keep the card.
  • Tell them how you really enjoy the benefits of the card and that you use it regularly, but the annual fee is just too high. Politely ask if there is anything they can do, such as waive the fee. I typically do not ask for miles/points directly, since they may voluntarily give you this option anyway if they can't waive the fee.
  • There may be some push back. The agent may tell you how great this card is, and give you a long list of reasons why you should keep it. Respond by bringing up examples of other cards you have that may provide better benefits, such as no foreign transaction fees, or an anniversary bonus.
  • At this point, it is either an absolute no, and you may want to go ahead and cancel the card outright, or the agent will ask you to hold for a minute while they see what can be done.
  • If a hold occurs, then there is a very good possibility that they are willing to provide some sort of incentive. If they do, decide whether or not to take it, or perhaps to push even harder for more. That's a personal decision on whether or not the offer offsets the annual fee.

In my case, the agent came back and said they could give me a $35 statement credit immediately, bringing my annual fee down to $30. I waivered for a few seconds, then politely asked if that was the best they could do. Sensing my hesitation, the agent actually put me on hold one more time, and then finally came back and said they could waive the entire annual fee by giving me a $65 statement credit. Score!

Of course, success is not always guaranteed, and I have plenty of examples where I struck out and went ahead with closing my account. But, if you have a good amount of spend on your card, and you are thinking about cancelling anyways, why not call in and see what kind of retention offer they can provide? It never hurts to try.

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