Q1) What is a retention bonus?
Q2) What is a challenge?
Q3) When should I call?
Q4) What should I expect to get?
Q5) What will help me get more points?
Q6) Will my points I have earned go away?
Q7) Are there ways not to cancel a card and still avoid the annual fee?
Q8) Does it hurt my credit score to cancel a card?
Q9) Can I get the same card and new card points again?
These are all very common questions and the answers are not all the same for all banks so please keep this in mind. Also, results can be very different from person to person and card to card. Also never ever cancel a card say 3 or 4 months after you get it. There is no benefit to you to do this and it could result in the bank taking the points you earned back. This is rare, but again, why risk this when there is zero benefit for canceling early.
A1) A retention bonus is either an amount of points or a statement credit to keep you as a card holder. Some banks have a retention department that can offer you an amazing amount of points to remain a card holder. At other banks this is just handled by front line reps or supervisors. You may, in lieu of points, be offered no annual fee for another year.
A2) A challenge, often done by CitiBank, is a bonus point offer if you do certain tasks like spend $1000 or $5000 dollars in say 3 or 6 months. If you do this you will get 10k or 20k or some other amount of points. You may or may not get your fee waived for the year. Most times you are offered a choice of options.
A3) As I mentioned before, it is good to call before the annual fee hits. Say 10 or 11 months into holding your card. This will give you time to show you are using the card and you are a customer worth keeping. And this leads right into the next answer.
A4) This can vary by huge amounts. For example, did you only meet the minimum spend then never ever use the card again? Or, did you use the card a ton or even now and then for most of the past year. I have received 30,000 Skymiles from my Delta AMEX Reserve card but I spend $60,000 a year to get my 30k MQM’s so I show myself as a customer worth keeping. Other cards, where I have just met the spend and then not charged one dollar more, they offer me nothing and are happy to close my account (and to have me go away)!
A5) As you have seen in A4, spending and using a card will make a bank “show you the point love” more than if you don’t. Simple right; but there are other things too. You can always ask for a “challenge” that is, spend a certain amount to get the points. Or, with AMEX, be sure to ask for the retention department not just front line reps. Also, if you do not like a zero offer, say that you think you will keep the card open for now and call back a few days later and hope for a better rep. Just like with Delta, if you do not like the answer from rep one, call back as maybe rep two will offer more.
A6) Most of the time once you earn points they are yours. This is not ALWAYS the case. For example, if you close an AMEX Membership rewards points account & card, and you do not have another one tied to that account, your points are gone. Also, as I talked about already, never cancel quick. It can only hurt you. Chase has also been reported to take back Ultimate Rewards points for closing a card soon after you get your points. Additionally, the only time you would want to do this is say with Chase to be able to get approved for another card by closing the older card but at that point there should be no risk to your points.
A7) You bet. Some cards will be happy to waive the annual fee for another year or even many years if you keep asking and are using the card. Others, you may be able to “downgrade” to the same type card, often with less benefits, with no annual fee. Remember, to have a ton of cards does not hurt your credit score – not paying the debt off does! That leads to the next answer.
A8) YES! Think about this. If you, say, have $10,000 total credit available on 2 cards ($5,000 each) and you cancel one of them, you have lost 50% of your total credit available. Even if you have, say, $100,000 total credit available and cancel a $10,000 card, you have still dropped your available credit by 10% and even possibly upped your debt vs. your total available credit. Bottom line, having a ton of credit says your are worthy of risk for credit cards.
A9) It depends on the bank. With AMEX it is the close date that matters. You must not have had that “type” card for 365 days. If 366 then yes you can get the new card bonus again. With Chase, I have been told it is 24 months since close date to get the new customer bonus. With Citi, 18 months since application date (I still use close date to be safe but YMMV). With BofA & Barclays, you can get often the same card every 3-6 months but it would be wise to leave your FF number off the app and merge accounts later. With US BANK it would seem, you can get the same cards again and again and again!
So there you are. There are not only a ton of points from new cards, but you can also earn a bunch by keeping your cards or even from downgrading them. As I say, it never hurts to “beg for points“! – René
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
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