01
Nov

6 Tips for Negotiating a Retention Bonus

Posted By Trav

One of the biggest decision every frequent flyer will have to make is whether to close a credit card or keep it open after getting the signup bonus.  Since many cards will waive the first year’s annual fee, the first time you’ll actually have to pay for the privilege of having the card will be the second year.  That’s when it becomes decision time!

So what cards should you keep?

One of the keys to determining whether you should keep it open or not is the retention bonus you get offered!

Some cards will be no-brainers one way or the other; the card will either offer such a good anniversary bonus (such as a free night each year) that it makes no sense to close the card or it will have such a hefty fee attached to it that you’ll be closing it no matter what (such as the $450 American Express Platinum).

However, most cards fall somewhere in between.  What about those cards that are on the fence?  

You’d rather keep a card open in order to keep your credit score high, but although most cards offer some decent perks, it’s usually not quite enough to justify keeping them open.  But if you could just get a little something extra…then, sure, you’d keep it open.

Well, turns out, sometimes you can.

Credit card companies don’t want you to close your accounts with them because they don’t want to lose customers.  Hence, the ability to negotiate a retention bonus.

A retention bonus is when the credit card company offers you something extra for not closing the card.  The retention bonus usually comes in the form of a statement credit or frequent flyer miles or hotel points.

If the retention bonus they offer is one that comes close to how much you would pay for the annual fee than you should keep the card open.  Anything near 100 miles per every $1 of annual fee is a good deal!

With the help of loyal EPoP reader extraordinaire Matt, who was recently able to earn himself a retention bonus of 10,000 United miles for keeping open the Chase United Explorer, I’ve compiled a list of 6 tips to help you be successful in getting yourself a nice little retention bonus!

6 Tips For Negotiating a Retention Bonus

1.  Mention all the things you like about the card.

When starting the conversation, mention all the reasons you like having the card and BE SPECIFIC!  This will show the rep that you know what you are talking about and will start you off on good footing, since you are complimenting the product.

Example:  For the Chase United Explorer, Matt specifically mentioned he liked free checked bags, 2x on United purchases, and priority boarding.  

2.  Be “on the fence”.

Don’t call up and sound like you’ve already made up your mind about closing the card.  After mentioning the perks of the card, use language that makes you sound like you are debating what to do.

Example: Matt said “but I’m not sure if these perks justify the $95 annual fee.”  This is much better than “but there is no way I can afford to pay the exorbitant $95 fee.”

3.  Mention the exact amount of the annual fee.

This will again make you sound knowledgeable and it will also serve to make sure the rep knows exactly how much you have to pay for that card.  If the fee is hefty, it may also make the rep think “yeah, that is a lot to pay each year” and be more sympathetic towards you.

4.  If you never ask, you’ll never know.

The credit card companies may want to keep your account, but if you call up and simply tell them you want to cancel, they may not jump all over themselves to offer you a retention bonus out of the blue.

If the representative doesn’t say anything about a retention bonus after you’ve mentioned the perks and said you were unsure, be pro-active and ask them about one.

Example:  “I was wondering if there were any extra incentives Chase could offer to encourage me to keep the card open.”

5.  Control the conversation.   

By mentioning the things you like about the card right off the bat and then stating that you are unsure about keeping the card open, you are immediately taking control of the conversation.  Lay the situation out there clearly and then put the ball in their court.  You are making the rep reactive to your situation instead of the other way around.

This confident attitude goes a long way to getting what you want from the conversation.

6.  If you don’t get the answer you want, call back.

I recommend this to people for every situation regarding credit cards and the retention bonus is no exception.  You may be told that a retention bonus is not possible or unavailable from the first rep.  Don’t cancel the card!  Thank them, hang up, and try again.

I’ve had (literally) hundreds of readers call back a 2nd time and be able to get exactly what they were told was not possible only a minute ago by another rep.  It happens all the time, so don’t give up after the first call.  Try a second, and maybe even a third, time.

Example:  Matt was not given any type of retention bonus the first time he called but was able to snag 10,000 free miles the second time he called.

Final Word(s)

You should always ask for a retention bonus before deciding to close a card.  It makes no sense not to; the worst that can happen is they say no, in which case you are just back to where you started!

And if you don’t get the answer you want, don’t be afraid to call back.  A few minutes of your time for a upwards of 10,000 miles?  Sounds pretty good to me!

What are some other tips you have for negotiating a good retention bonus?  What’s the most successful retention bonus you’ve been able to score and which lender do you is the most generous?

(photos courtesy of pietro999 and r3tr0fr34k)

8 comments

  1. Ken says:

    I called Citi for my two AAdvantage cards recently. The first call they couldn’t help me for either card. The second call they offered an $85 credit along with 1,000 bonus miles every month I spend $1,000. I took it for my Visa and canceled my Amex via secure message. It has been like pulling teeth getting my wife to call them. She loves the free hotel nights but refuses to call someone for 10 minutes of her time. Makes no sense to me.

    1. Trav says:

      @Ken- Great job getting the retention bonus with Citi. I didn’t have any luck with them offering me anything, so I closed my accounts. As for convincing the significant other to call, well, that’s a tough one. I usually tell my wife she can go buy something she wants if she calls, or bribe her some other way!

  2. Scott says:

    Timely advice, the annual fee is almost due for my Delta AMEX. I signed up for the miles, but don’t use it much and already get most of the benefits from being a frequent flyer.

    1. Trav says:

      @Scott- Glad you enjoyed it. I assume you are canceling your Delta AMEX then?

  3. dadtogo says:

    I’m going on 3 years of getting my Citibank Visa fee waived via a statement credit and also bonus miles matching my monthly spend varying from $500-$750. The last 2 times I’ve called both reps have said “We can see that you use your card so we definitely want to keep your business.” The only thing I have on there is my monthly Netflix bill for less than $10… Doing that is worth it to me to get perks that come with the card.

    1. Trav says:

      @dadtogo- Wow, that’s awesome. Is that for the Citi/AAdvantage Visa? I wasn’t able to wrangle anything out of the rep for the Citi/AA card retention bonus, but I also don’t have a monthly recurring payment on it either. Seems like a wise move to throw something small on there if it gets you a retention bonus. Well done!

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