The longer you've had a given credit card open, the more leeway you get as an account holder -- especially if your account has always been in good standing. Credit card companies like to retain customers, and often, they'll make concessions to keep customers around.
It's for this reason that you shouldn't be shy when it comes to telling your credit card company what it is you need. If you want to save yourself money in the course of being a cardholder, there's one key question it could really pay to ask.
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Will you waive my annual fee?
Not all credit cards charge an annual fee, and among those that do, that fee can vary. You may pay as little as $95 a year for a given credit card, or your fee might be $250 or more.
Generally, credit cards with annual fees offer certain reward programs or perks that make those fees worth paying. If they didn't, consumers wouldn't fork over that money when it's possible to get a credit card that doesn't come with a fee.
Still, there may come a point when you get tired of paying an annual credit card fee. And if you've had that account open a while, before you cancel it, it pays to contact your issuer and ask for your annual fee to be waived.
Will your credit card issuer agree? Well, that depends.
Your issuer might look at factors such as how frequently you use your card to determine whether it will waive your fee or not. But if you do manage to get your issuer to waive your fee for even a year, it could put a nice amount of money back in your pocket.
Why not just cancel an annual fee credit card?
If you determine a card's annual fee is no longer worth paying, you could just cancel that card and be done with it. But cancelling a credit card could have a negative impact on your credit score.
One big factor that goes into calculating that number is your credit utilization ratio, which measures the percentage of your available revolving credit you're using at once. If you cancel a credit card, you'll shrink your total credit limit, and that could drive your utilization ratio up into unfavorable territory. The result? Unwanted credit score damage.
Also, the length of your credit history is taken into account when calculating your credit score. If you close an annual fee credit card you've had open for many years, it could reduce the average age of your existing accounts, thereby causing your score to take a dive.
It's for this reason that it's generally worth asking to have an annual fee waived before rushing to close a card that charges one. The worst thing that will happen is you'll call your credit card issuer, put in your request, and be told no. You really have nothing to lose and lots to gain by speaking up.a
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