I have a credit card that I signed up for, used for a while, and paid off (primarily to get bonus points).
Then I forgot about it, and haven’t used it for a while.
I just got a bill with a $95 annual fee, so the total amount I owe on the card is now $95.
Is there any way I can get out of that? This seems like the kind of thing where there might be some regulation saying that as long as I close the account within a month and don’t use it any more, they have to cancel the fee… or prorate it so I only pay for one month, or something of that sort. Or I could just call up and wheedle?
any advice?
Generally, the Annual Fee is paid in advance. So that $95 is for the next years’ use of the card.
If you don’t plan on using it anymore, call & tell them that, and ask them to cancel the fee. They might. Or they may claim that the fine print says that you must cancel in advance, etc. or you owe the fee. You can still argue with them.
And the final option for you is to just … not pay it.
They can try to hit your credit rating for this, but if your other accounts are good, it won’t matter much. You can always sue them in your local small claims court over this fee. And probably win.
If you’re going yo play the points game, you have to keep track of what’s going on, or it will bite your ass.
Annual fees for credit cards are typically paid in advance for the upcoming year of use. If you don’t cancel in time, you may be boned. It never hurts to ask, but my guess is they will be quite reluctant to void your fee.
Doesn’t hurt to call and ask. Even first-line reps usually have authority to waive some charges for goodwill, though typically smaller amounts. The downside is that there’s not a lot of goodwill incentive if you’re planning to dump them, but the fact that it’s an advance payment for next year is in your favor. I would try it, and even try escalating to a manager.
I wouldn’t do this. It could end up mattering quite a lot. Credit card companies are among the most meticulous in reporting credit status, and they will almost certainly report this as increasingly past due. There is some past-due threshold (IIRC either 90 days or 180 days past due) where some credit applications may result in an automatic denial if such a thing is in your file. It may even be referred to a collection agency. These rules may vary by jurisdiction but it’s not something I would risk for a relative pittance.
I checked the fine print on one of my own credit card statements. Annual fee is refundable if you cancel the card within 30 days or one billing cycle. Almost certainly yours says something similar.
If you can’t cancel the fee without penalty, pay it, and cancel the card. however, the mere threat that you might cancel could be sufficient to get some kind of concession, so don’t overlook the lever that’s in your hands right now.
In the 15-20 times I’ve called about an annual fee on a credit card I planned to cancel, one of three things has happened
They’ve canceled the card and refunded the fee.
They’ve let me keep the card, but have refunded the fee.
They’ve let me keep the card, charged the fee, but then given me a credit for it. (No, I don’t understand why they thought that was different from #2.)
They’ve offered me some deal that made it worth keeping the card (rare).
I’ve never had to pay an annual fee on a card I was willing to cancel. Make the call. YMMV, of course.
If they flat out refused to refund the fee, but have no problem giving you a credit for it, I’d be willing to bet they want to keep the fees so they can show them on their cash flow statements as income. The credits are probably just mixed in as random expenses.
Beware the trap of missing your payment due date. Then they’ll hit you with a late fee plus interest. And even if they refund the $95, you still owe the interest and the late fee and it’s a ding on your payment history. Don’t put this off. Call them and be nice, ask if they can refund the fee and cancel the card.
I would be more proactive than that. By the time late fees, interest and attorney fees are added to that $95 it might be worth them trying to sue YOU and get a lien/garnishment via default judgment, in addition to the 7+ years of credit reporting (which could include 3 separate negative items - original creditor, collection agency, public record for judgment). It may seem like a waste of time to sue for such a small amount but banks regularly sell debts in bundles and collection attorneys mass file lawsuits. it’s happened to me for amounts that small.
You can sue for damages but if you have not paid the fee you have not been damaged and have no basis for a suit. You can’t sue somebody who has merely invoiced you.
Me either. To add to the list, I’ve occasionally gotten only a partial credit. Not the whole fee, but enough that the reduced fee made it worth it to me to keep the card.
I had the exact same issue with a “World Elite” Mastercard just last summer. I travel a lot and was talked into switching from my no-fee MC by an MC rep who telemarketed me (I presume they saw how much I was spending on air tickets). The card allows you to get into airport lounges either free or at a discounted price.
I told the guy I wouldn’t pay since I didn’t see the value in it. He waived the fee for the first year. I decided I didn’t want the card but they charged me at the beginning of the first period in year 2, before I could cancel.
I called them and went back and forth eventually with a “supervisor”. I just told them I wanted to return to my old no-fee Mastercard. I hadn’t used the WE card since the renewal and hadn’t used any lounges either. I suspect on that basis and the fact that I was still keeping a MC, they agreed to cancel the amount and switched me back to the old card.
Resolution of story: I called them up, said “I’d like to cancel this card”, without mentioning the annual fee or anything, and they said “wait, wait, spend $95 in the next two billing cycles and we’ll refund the $95 annual fee”.
There you go…you called them on it and cancelled it or there you co…you accepted that?
If you accepted it, make sure spend $100 or so dollars in the next few weeks and then watch for your credit. I’d be wary of the wording. Is today part of ‘the next two billing cycles’ or do they start in the next one? Also, $95 in each of them?
In any case, if you’re happy that’s all that matters, just watch for the credit and if they pull anything, dump the card (as long as you’re willing to do it).