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 May 28, 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.
I love your informative site-thanks! My Scotiabank Value Visa Card annual $29 fee was applied a few months ago. Any chance if i call and ask for it to be retroactively waived? I am considering cancelling it anyway (i never carry a balance and that card’s main benefit is low interest rate). Thank you.
No, once an annual fee is applied and charged, it cannot be waived. You are responsible for all fees and charges incurred until you cancel the card. The good news is, no charges should appear following the date the card is canceled and if they do, call your provider.
Hi there, I currently have a TD First Class Travel Visa credit card with the first year $120 annual fee waived.
I’ve already gotten the first 70,000 TD travel points from the sign up bonus but will have to keep the card for the full year to get the remaining 20,000 TD points.
I’m wondering if it’s worth upgrading my checking account to the all-inclusive account to get the remaining 20,000 points and waive the credit card’s annual fee?
The thing is my checking account only requires a minimum balance of $2000 to waive monthly account fee (it’s not available anymore) while the all-inclusive account would require $5000.
If I do upgrade my account and decide to downgrade later, which I probably will, I would have to keep a minimum balance of $3000 in my checking account.
Thanks for the comment. We’re not sure where you got the idea that opening a chequing account is what allows you to earn TD rewards from the TD First Class Travel Visa Infinite card. The current promotion for the card gives 20,000 points for making an initial purchase, up to 60,000 for spending money on the card, and then an additional 10,000 for adding an authorized user to your credit card account. That’s the 90,000. To waive the card’s annual fee, you need to have applied and then been approved for it before today, actually (December 1st, 2019). You’ll likely get the rebate no problem and can expect it soon.
You can indeed sign up for the All-Inclusive bank account from TD and waive an annual fee for one of the issuer’s cards, but since you’ll already get the rebate, we only recommend signing up for this chequing account if you actually need it. To waive its monthly fee then you will need to have at least $5,000 in the account at all times, however, this deal is separate from the TD credit card. Hope that helps.
Thanks for the reply. I think there may have been a misunderstanding.
I already have a TD First Class Travel Visa Infinite card which I’m using now. I have already earned 80,000 points from the promotion (20,000 points for making an initial purchase, and 60,000 for spending $2000 in the first 3 months).
For me to get the final 10,000 points, I would need to keep the card for the full calendar year. (This might a different promo than the one you mentioned).
However, I called TD’s credit card department and they said the final 10,000 points would only be given AFTER the full calendar year, which means I would be charged the $120 annual fee for the card.
So for me to avoid the card’s annual fee, I would have to upgrade to an All-Inclusive bank account beforehand. My current checking account with TD only requires a minimum balance of $2000 to wave the checking account’s monthly service fee ($4.95). Thus, I’m not sure if it’s worth upgrading to the All-Inclusive bank account which requires a minimum of $5000.
So I guess what I’m asking is do you think it’s worth upgrading my current checking account to the All-Inclusive bank account just to get the final 10,000 TD points and wave the card’s $120 annual fee? Or should I just downgrade the credit card to a free one before the annual fee and forget about the final 10,000 TD points?
Besides the travel rewards, I don’t see myself using the card more than maybe a few times a year for trips. I already have a few other credit cards that I use for daily rewards.