Credit Card Retention Experiences Across Four Banks
Credit card retention is a popular topic on the blog. Looking at the comments on yesterday’s post about Citi shutting down accounts with the automated system puzzled me. Yes, Citi has the right to do it, but they should make it more than clear to the customer that their account is being shut down via the automated system. More importantly, I simply don’t understand why a company that spends so much money on customer acquisition would do such a thing.
With that said, the topic of retention isn’t limited to calling up a company and threatening to cancel so they will give you something. Sure, it is fun when that happens, but I speak to retention representatives all of the time for other reasons. My wife and I apply for and open a lot of cards. We are constantly evaluating our need to keep a card or perhaps to convert it to something else.
Over the past week my wife and I have had retention experiences with four different banks since a cluster of cards just hit annual fees. As you will see, the outcome at each of the banks was different, but satisfactory to our needs. Let’s take a look at what we were offered, what we decided to do and some takeaways from the experience.
Barclaycard Aviator Red
My wife applied for this card when it was still the US Airways Mastercard. The card actually comes with an anniversary bonus of 10K miles, but those already posted and we did not want to pay the annual fee on the card. Since Barclaycard’s retention has been stingy lately and since we have other American Airlines credit cards, my wife wanted to cancel. She wasn’t even seeking out an offer.
When my wife first called in she got a rep who wasn’t very friendly. That representative offered a credit equal to half of the annual fee. At that point she was just going to cancel when something lucky happened. The call dropped out. When she called back a much friendlier retention rep offered to issue a credit equal to the annual fee and also offered 1 additional mile per dollar spent on gas, groceries and utiltiies for the next 90 days up to 8K bonus miles.
Verdict: My wife decided to keep the card to extend her average age of accounts and for the bonus.
Takeaways: Barclaycard’s retention teams have varying offers. Push for what you want and if you don’t get it consider hanging up and calling again.
American Express Business Gold
A little over a year ago I opened an Amex Business Gold account during a 75K bonus offer similar to the one I covered the other day. While this account has been good to me (especially considering Amex Offers), I don’t really want to pay the $225 annual fee. ($175 + $50 for AUs). With that said, I do believe keeping some accounts for longer periods with Amex is good for my banking relationship with them.
The other day I called up American Express to go over my options. Of course I was hoping for some sort of offer to keep the card, but that never came. I knew I could downgrade to a Green card with a $95 annual fee, but I hate paying an annual fee for a card I will barely use. The rep I spoke to was knowledgeable and he almost sold me on keeping the Gold card for the 3X computer hardware category, but I have access to my wife’s Gold card if I need to make a purchase.
Verdict: After thinking it over, I decided to downgrade to the Business Green which will start the 12 month clock ticking on me getting the Gold again if I want. Sure that card still has a $95 annual fee, but one good Amex Offer will more than pay for that considering my AU cards. Some people would never pay this annual fee, but I see it as a way to invest in my business relationship with Amex.
Takeaways: Amex is one of the best banks about allowing for product conversions. It is a good idea to research your options ahead of time since the rep might not offer you all options at once. While I didn’t receive a retention offer, some people have recently reported that they have received offers for statement credits on various cards, so it doesn’t hurt to ask.
Citi AAdvantage Visa
My wife’s three year old AAdvantage Platinum Visa card came due recently as well. She got this card at the same time as an AA Amex by using the old two browser trick. Recently when calling in on the Amex, she was given a credit equal to the annual fee (after making 5 purchases) so she is keeping that card. Unfortunately the Visa card has no such offer, so she decided it needed to go.
Verdict: Instead of cancelling the card, she opted to convert it to a Citi Double Cash. This way we always have a nice 2% card with no annual fee and more importantly the history of the account stays in tact.
Takeaways: According to numerous recent reports from readers, Citi has tightened on their retention offers on the AAdvantage credit cards. Where annual fee credits were once the norm, it seems offers are still available, but harder to come by.
Chase Sapphire Preferred
There was a time when retention offers from Chase were very good, but it has been awhile. The Sapphire Preferred is another card where it is hard to get any sort of an offer. My wife called up on her card the other day not expecting an offer, but hopeful. Unfortunately there was no offer and the rep seemed eager to close her account. Not so fast though, there is a better option.
Verdict: My wife asked to convert her Sapphire Preferred card to her second Freedom. In my review of the Sapphire Preferred I said it is a good card to get, but not necessarily to keep. I actually believe the Freedom is a more valuable card with its 5X earnings and no annual fee.
The three main reasons to keep the Sapphire Preferred are for its 2X earnings on travel and dining, primary rental car insurance coverage and points transfers to partners. We both have Inks to cover the transfers, I think the ThankYou Premier is a better card since it earns 3X on travel and I like the insurance coverage, but don’t think it is worth the annual fee.
Takeaways: Chase won’t let you apply for a second Freedom card, but it is possible to get a second (or third) one through the back door by converting the Sapphire Preferred. While Chase’s retention offers are almost non-existent, this conversion is valuable.
For those who think retention is all about begging for offers, then you aren’t playing the game right. Sometimes the offers will come and sometimes they won’t. Formulating a strategy for which cards to keep and which ones to cancel is essential. Also, never underestimate the power of a conversion! I always go into a call knowing what all of my options are so I can make the best financial decision for myself.
Do you disagree with any of our decisions? Let me know in the comments!