How to Negotiate Annual Fees in the COVID Era

July 2020

Always the opportunist, I was determined to find some upside – any upside – to the Coronavirus’s impact to travel hacking.

And you know what? I think I did.

Before COVID hit, I got to work early one morning (#tbt to working in an office) and sat at my desk in our Team’s room, alone. I pulled out my wallet to pay an electric bill online and reached for my Platinum card.

As I ran my finger around the thick metal edges, I contemplated the fact that my annual fee was set to trigger in the next few weeks, and I grimaced remembering the $550 hit from the year before. Abandoning the electric bill (sorry, roommate), I quickly typed “AmEx retention number” into the Google search bar, and on a whim, dialed the result.

A chipper woman named Kathy answered on the third ring.

“Good morning, this is Kathy with American Express. Am I speaking with Kathleen Gatti?”

Taken aback by the recognition, I froze in place. “Yes?” I answered, as if it were a question. Then I remembered my phone number is associated with my credit card’s account, and I felt stupid for feeling surprised. I was impressed nonetheless by their customer service.

I think I had to give a few personal details to confirm my #identity (which I appreciated given the great identity theft debacle of 2019), but then she got to the question that made my stomach flip: “What can I help you with today?”

Be cool, Gatti. Calm, cool and collected.

“Right!” I replied, my voice raising two octaves, “Well, Kathy, you know… it’s almost time for my card to renew for the next year and I’m thinking about switching to Sapphire Reserve.” I delivered the blow. I felt bad for playing mind games with Kathy, but I didn’t want to pay the fee.

“Oh, I’m sorry to hear that, Kathleen,” she replied, sounding genuinely remorseful. I felt worse. “But!” she said, “it looks like you’ve been using all your Platinum benefits!”

Shit, I thought, she caught me platinum-handed. I use this thing constantly.

“Well, Kathy, yes – but you see,” I strung the words together quickly, “I work for Southwest Airlines so the airline incidental credit is hard for me to make use of.”

Now her voice raised two octaves: “I LOVE Southwest Airlines! I live in Fort Lauderdale! I flew them last week to Houston.”

We have liftoff!

“No way! That’s great. What were you doing in Houston?” I asked as if Kathy and I were gal pals from way back. We talked about Southwest, flying, and family for a minute or two, and then – as if she had remembered she were at work – she steered the conversation politely back to the issue at hand: my cheapness.

“Well, Kathleen, let me see what I can do.” No more than 15 seconds elapsed before she returned. “Kathleen, I’m pleased to announce that I can offer you my best option today to keep you as a cardmember. We’ll credit your account for $500 to offset the annual fee.”

My heart soared and I silently fist-pumped.

“Thank you, Kathy,” I oozed, “I can’t tell you how much I appreciate this,” and I meant it. Kathy had saved me $500 – and she was pleasant as hell to boot.

“We just ask that you keep using that card, Kathleen!”

I promised her I would.

And in a matter of minutes, I had earned back my annual fee.

The remarkable thing about this anecdote is that it happened before Coronavirus was a twinkle in our eye. I had to negotiate the old-fashioned way: through veiled threats and empty promises that I’d take (more of) my business to a competitor.

Now, negotiating an annual fee is probably as simple as calling a retention hotline and saying the word COVID.

Negotiating an annual fee: the checklist

1. This is probably unhelpful if your annual fee is far away – if you paid it 6 months ago and won’t have to pay again for another 6 months, I doubt the retention department is going to be very fruitful. If your annual fee is coming up or just hit, keep reading.

2. Look at the number on the back of your card or Google “(card name) retention number.” I’d call the number on the back of your card first and then ask to speak to the retention department.

3. Once you’re on the phone with a representative, be polite and friendly. It goes a long way to treat this human being like an actual human being. Yes, they’re at work, but people are more inclined to help others who are nice to them. Be nice.

4. Explain your situation. You can use the simple following script:

   “Due to Coronavirus, my travel habits have changed a lot and I can no longer justify paying ($annual fee amount) this year for this card. I want to keep it because I’m sure I’ll travel next year, but I’m trying to cut back on annual fees.”

5. Worried that you’re being too obvious? Don’t be. They’re a retention hotline. Their job is to offer customers incentives to stay. A few different things might happen:

   1. They’ll offer to waive the annual fee.

   2. They’ll offer to reimburse part or all of the annual fee.

   3. They’ll offer you points to stay.

   4. They’ll call your bluff and say, Okay, would you like us to cancel the card?

6. Listen carefully: If they offer to cancel the card, you need to pivot quickly: “Well, is there anything you can do to help?” Put the ball back in their court. Make absolutely sure they’re unwilling to relent. If they hold their ground, simply say, “Thanks, I’ll think about it a little longer and get back to you.”

7. Then, you hang up without canceling the card, and you call back the next day hoping to talk to a representative who hasn’t blown through their retention bonus quota for the month.

Let me know if you try it and have success. Or, if you feel empowered to negotiate annual fees now and want to get a premium card, you can check out my full breakdown here. Happy negotiating!