How To Avoid Credit Card Annual Fees

avoid credit card annual fees

No more annual fees!

Being an avid reader of personal finance blogs/websites for the last year or two, I’v noticed that there are two schools of thought when it comes to credit cards. Those who say credit cards are pure evil and avoid them at all cost, and those who embrace credit cards and use them to play the rewards game.

I’m in neither of these camps.

I definitely don’t avoid using credit cards.  Not because I don’t think they are dangerous – they certainly could be in the wrong hands – but because they are very convenient.  I use credit cards more that I use cash.  However, I only use credit cards when I know I have the cash to pay for whatever I buy.

For example.  I budget $150 for groceries per month, but instead of paying cash when I go food shopping, I pay with my credit card.  I know I can’t spend more than $150 because then I’ll go over budget.  At the end of the month, I take the $150 that are in my bank and pay off the credit card.

This allows me to not have to carry cash all the time and also earn some rewards.

Now, I like earning rewards, but I don’t play the rewards game.  The game where you sign up for 10 or 20 credit cards and spend X amount of dollars a month to get X number of points.  I’m impressed by the people who are able to do this, but I’m just not one of these people.

I spend what’s in my budget and if I get rewards then cool, and if I don’t get rewards then also cool.  I don’t try to manufacture spending to claim rewards… or maybe not yet.

Why I Don’t Want More Credit Cards

The reason I don’t play the rewards game is because I just don’t want any more credit cards.  I got out of debt not too long ago and I’m still trying to arrange my whole financial situation.  I have way too many things to keep track of and having more credit cards will make it more difficult.

The reason I’m telling you this is because I pay annual fees in the few credit cards that I have… There I said it!

I could just apply for new credit cards with no annual fees, but I don’t want to cancel the ones I have because of two things:

  1. They were the only ones who gave me a credit card when I had terrible credit.
  2.  The age of credit history will be affected on my credit score.

I know these are the stupidest reasons not to cancel the cards, but those are my reasons and I’m sticking with them… for now.

As you can see, getting a credit card with no annual fee will not help me because I will still keep my old credit cards.  It will just mean that I have more credit cards.

How To Avoid Credit Card Annual Fees

One way to avoid credit card fees is to not have credit cards at all – gee thanks, Captain Obvious.  Another way is to get a credit card with no annual fees – really? As if I couldn’t figure that out.  A third way you could avoid credit card annual fees – and the way I do it – is by asking politely to get the fees waived.

The third way – asking politely – might be a little tricky, but it is definitely doable.

In the past, I never tried to get the fees waived because I was just happy to be able to have a credit card.  I always assumed that was the price I had to pay for having bad credit.

My credit is very good now, but I was still paying fees and since I’m trying to cut as many expenses as possible, I decided to give my credit card company a call.

The first time I called (last year) the costumer service representative told me there was nothing the could do because I had already paid the bill.  But he told me to call as soon as the next annual fee appeared on the bill and they could waive it.

Fast forward twelve months – more like eleven – and the annual fee appeared again on my bill.  I picked up the phone right away and called my credit card company.  Sure enough, they waived my annual fee and said it would be good for 12 months, but that I could call back in 12 months to see what they could do about it.

That works for me… for now.

Different Company, Different Policy

Not all credit card companies are the same so I recommend you call your credit card company and ask them if there’s anything they could do about the annual fee – if you have one.

A simple phone call should do the trick.  Something as simple as “Hello, I would like to have my annual fee removed.”  That’s all it takes.

Some companies, like mine, may ask you to call on the month when your fee was posted, but others might do it right on the spot.  Make sure you call right away and find out what your company’s policy is.

It doesn’t hurt to ask.  The worst that can happen is they say “No.”  But what if they say “Okay, we’ll waive the annual fee.  Is there anything else we can do for you?”

How do you avoid annual fees?

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17 Comments

  1. I’ve never understood why people pay annual fees when so many other cards waive them. I think Clark Howard hates the annual fees but Suze Orman doesn’t mind them. To me, it just seems like a scam. I have no credit cards but I think the easiest way to start looking would be to start with the no annual fee cards and go from there.

    Have you been tempted by the churning game? Why don’t you participate?

    • Yes the best way to go is to find a card with no annual fees. However, those cards are not available to everybody. People trying to build credit will probably have to settle for a credit card with an annual fee. But you’re right, first try to find a card with no annual fees. That’s the best way to go.

  2. If you use your card enough, there is no reason why you should pay an annual fee. You are providing enough value to a credit card company through interchange fees. Credit card companies may charge fees and have to disclose that they do; however, most will refund your annual fee, you just have to ask. If you don’t ask, shame on you.

  3. I’ve never had a credit card – ever. I don’t ever plan to. But I actually never use cash. I always use my debit card as “credit” and it functions the same way as a credit card, except sans rewards. That said, I cannot imagine ever using one with a fee! Suze Orman always says to get rid of those cards first. No reason to ever use a card with a fee in my opinion.

    • I know my reasons for keeping my cards are stupid, but what can I say. Maybe someday I’ll get rid of the cards all together, but I don’t see that happening any time soon.

  4. I’m going to try this with the Barclay card. It’s the only one I’ve been using for travel rewards, but I don’t want to pay $89 a year for it! Hopefully they’ll waive it for another year so I can continue to rack up rewards.

  5. The ones with the best rewards seem to have annual fees, so it pays to keep track of what you have. I had one that waived the annual fee the first year, so I used it for rewards, and when it came time for the annual fee I just downgraded the card to a no annual fee version.

    • That was a good plan. I’m eventually going to cancel my cards and start going for rewards. I know they charge annual fees, but I’ll try to get them waived or downgrade like you did.

  6. Although we use our cc’s for pretty much every expense possible to rack up rewards/travel miles, I refuse to pay an annual fee. I don’t the point of it and if any of our cards had fees and couldn’t be waived, I’d get rid of it.

    • If you use your credit card all the time and are in good standing, they’ll most likely waive the annual fee. They don’t want to lose a good costumer.

  7. We use our credit card for everything. Our fee is waved for our bank account and credit card if we keep a balance. It works for us now, but once the mortgage is paid off we’ll probably have a different setup.

  8. I have never had a credit card with an annual fee but it sounds like you found a nice option to waiving it. It never hurts to ask! Once, I accidentally paid a credit card late and acquired a hefty late fee. I called and asked to have the late fee waived and they said they could waive it once per year! That’s pretty good savings right there!

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