5 Tips To Escape Credit Card Annual Fees
Canadians are obsessed with credit card rewards, perks and benefits. From free flights to free baggage and insurance, credit cards offer an abundance of value. However, we’d all prefer to get a little something for nothing and avoid those pesky annual fees.
Aside from interest rates, the one thing every one can agree on is that they hate credit card annual fees. It doesn’t matter whether your welcome bonus is worth $400, your travel medical insurance $200 or your free checked bags save you $70 a trip. Annual fees are a pain in the @$$!
Aside from getting a no annual fee credit card, what should those of us who want the benefits of a fee based card, without the fee, do? Here are just a few suggestions.
In This Article:
1. Get A Banking Plan That Waives Your Annual Fee
Many Canadian banks offer banking plans that waive the annual fee on a selection of their premium credit cards. For example if you get TD’s All-Inclusive Banking Plan ($29.95 waived with a $5,000 monthly balance), you can also get the annual fee rebated for your choice of one of 5 premium credit cards, including the TD® Aeroplan® Visa Infinite* Card‘s $139 annual fee† (which is rebated the first year if you apply online by January 3, 2023). The BMO Premium Checking Account, RBC VIP Program, CIBC Premium Plan all waive the annual fee of their premium cards.
†Terms and conditions apply.
2. Call and Ask For Your Annual Fee To Be Waived
You know the old saying “squeaky wheels get the grease”? It’s true. As our very own Wayne Gretzky said, “you’ll miss 100% of the shots you never take.”
In that spirit, if you’ve been a long time customer, or you’re spending a prince’s ransom on your credit card every year, call your credit card issuer and ask them to waive your annual fee. You may not have a checking account with the bank, but your loyalty and/or spending level may still make you deserving of a fee waiver.
If nothing else, let them know you’ve received an offer with a fee waiver from a competitor, or that your checking account with your retail bank waives the annual fee for one of their premium credit cards.
3. Get a Credit Card With a First Year Annual Fee Waiver
You don’t buy a new pair of jeans without first trying them on do you? Why pay for a new rewards credit card before trying it out for a year and seeing if it works for you i.e. enjoy the online experience, easy to redeem, good value, good credit line, good customer service, etc…
Some of the best credit cards in Canada waive the first year annual fee to make switching a little easier for you. With so much fine print in the industry, credit card issuers should have to earn our trust, before we shell out a dime.
4. Downgrade Your Card
If you have a premium credit card and you find it’s not worth the annual fee, you may be able to ask for a downgrade to one of the credit card issuers no fee cards. You may not want to cancel the card, because you want to keep the credit line available for a rainy day, or you may simply want a no fee back-up card, in case your primary card gets lost, stolen or frozen.
5. Cancel Your Card
If you found yourself another premium credit card, it may not make sense to have multiple credit cards with annual fees at the same time. That’s especially true if you’re focused on exploiting welcome bonus offers throughout the year.
There are a few things to take into consideration before you cancel your card. For example, some people will argue that cancelling cards may lower your credit score because it increases your credit utilization ratio (total balances to credit line). However, if you’re cancelling a credit card and replacing it with another one, you should be fine. Moreover, if you’re not maintaining a balance, credit utilization shouldn’t be as much of a factor either.
Lastly, if you are applying for new credit cards, some of your new issuers may assign you a small line of credit, if they see you a large number of unsecured lines of credit on your file. Getting rid of those lines, gives more room for your new issuers to assign you a higher line themselves.