Case Study – The Art Of The Credit Card Annual Fee Waiver

From the day you got your hands on a credit card in your own name, you will never live another day without at least one in your wallet. That is how much more addictive credit is than drugs.

They are secure, a sign of social status, can be a declaration of personal values, and more importantly, convenient for retail therapy. This why it is really a bummer each time we are notified about the inconvenience of an annual fee being charged against our cards.

If you don’t know, we agree in contract to be charged these fees when we sign up for a card. And if you had never seen that term, you are excused. Because who in the right mind would read up those hundred-page conditions… except maybe a legal junkie.

For most credit card users, the annual fee is just like a yearly roll call where the bank is making a headcount. It serves a notice to the card owner to make a phone call to a hotline which a robot will attend to.

The caller then has to follow instructions from a robot, to act like a robot, and key-in numbers from a telephone keypad for verification. Sometimes a real natural human being picks up the phone. But most of the time, you are told to hang up and wait for the status of your fee waiver request.

Some fancy algorithm then retrieves all your information from the bank’s database including your credit and decide whether you are “good enough” to deserve a waiver approval.

For almost every credit card I hold, this routine has been an annual event without fail. And every time I went through the process, I received the good news later that the annual fees are waived…

… until a couple of weeks ago.

You see, I logged into my online banking account as usual to manually repeat the payment process of a few recurring bills (I hate to set it at auto-repeat). Then I saw the dreaded annual fee being charged against my credit card.

At first thought, I bemoaned the hassle of having to call in again and interact with a virtual voice. But if this $80 can be saved with a 3 minute phone call, I’d be crazy not to make that call.

This time it was different. Instead of having the robot automatically clock my request into the system and have me wait for a response, it routed my to a real actual person.

No biggie. I figured that I’ll just ask this guy to credit the funds back to me. It will be done in a few minutes.

The first battle – Feeling out the adversary

But what happened took me by surprised. The man on the other end of the line took 10 seconds to review my account details and told me that the charges cannot be waived. I had to pay it.

So stunned was I at this response that I just said “Thank you” and hung up. After which, I actually felt embarrassed at myself for not putting up a fight at all.

This bothered me until I went to sleep.

I had worked as a bank previously. So I understood the importance of good credit. This meant that I always make it a point to pay my bill fully, promptly, and never past the due dates. I was the model customer of a bank. If they could, they would probably use my picture as an avatar of a model client when conducting classes to new recruit bankers.

I was totally confused as to why I was rejected and denied… these days even online chargebacks can be reversed in your favor… so why not an annual fee?

The second battle – Counter offensive

When I woke up, the next morning, I was suddenly motivated to at least attempt a second try to get the charges written off.

But this time, I wanted to enhance my profile with whoever ends up attending to my call. So I paid off the outstanding bill of that particular credit card except the $80 charge. It is important to note that this an early payment as the due date is about 2 weeks away.

How can a credit analyst not appreciate such “good boy” behavior and have the heart to deny me the waiver.

If you think that I’m being a miser and I should just let the bank make a little money out of me so that they can finance their operation, then you don’t really understand how this works. Banks already make a lot of money through the transactions we make via their credit cards.

So profitable is their revenue from our transactions, that bankers who are tasked to acquire new credit card customers are paid as much as $50 per card issued on top of their basic salaries.

Do you think that all these costs that banks are willing to pay for acquiring more card users is an act of charity?

If the cost of acquisition is more than what the bank can earn out of each client, there is no way that they will continue their card marketing activities with such vigor.

So really. They are already making money from all of us. An annual fee waiver is nothing. And will very well encourage card owners to continue swiping their cards happily.

I also did a little research online about how to get waivers. I intended to give some of the tactics I found a try.

So I called again… And my case was thrown out the window again.

• I tried giving an ultimatum like an article suggested, it was gunned down.
• I tried to use reward points to exchange for the waiver, it was laughed off.
• I threatened to cancel my card, and was politely given a guide on how to cancel.

Wow I was at the end of my wits… I felt that this must be the end of my relationship with this bank. I have always had a good impression of this bank. But this affair really left a bad taste in my mouth.

I am the model customer, for goodness sake! How can they encourage a model customer to leave over a mere $80!?

The third battle – Win hearts and minds

At this point I was pretty much resigned to my fate.

Mentally, I’ve already pictured how I will walk into the bank, get a queue number, tell my story to a staff, and sign the papers to cancel my card. I’ve also prepared a slick parting line to leave the bank with.

But… I decided to give it one more go.

This time I will go with a charm offensive. I’m bringing out the cannons.

I will… pay the annual fees of $80 before I call the dreaded hotline again.

Again, the usual robotic voice greeted my and asked me to press a number of buttons for verification. Again, it forwarded me to a customer service representative with an Indian accent. And again, I expected the same undesirable result.

But to my surprise, this time, there was no extra conversational topics to argue over. Upon making me request, I was put on hold for about 30 seconds, and the next thing I heard was that the waiver is approved and the $80 will be credited back into my account within the next few days.

As I picked up my jaw from the floor after hanging up, I experienced an awkward silence with myself.

I don’t know exactly what made them change their tune.

Maybe it was the $80 being paid leaving no outstanding balance (even though the due date was far away). Maybe they were satisfied with the results from testing my perseverance. Maybe different staff have different levels of authority over such matters. Maybe the planets were aligned in a straight line at the precise moment I made my request over the phone.

I don’t know. I do know that consumers deserve to be appreciated by the banks.

Nevertheless, the moral of the story is that you shouldn’t give up on requesting credit card annual fee waivers. Especially when you have always been a good customer. If you keep asking, you might just get what you wished for.

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