What is a credit card retention offer and should you ask for one?

If you’re thinking about closing one of your credit cards, know that you may be able to score a retention offer from your card’s issuer that can justify keeping the card at least for another year.

So before you call or go online to cancel a card, it may be worthwhile to see if the issuer will offer you an incentive to keep the card a while longer.

What is a credit card retention bonus?

A credit card retention bonus or offer is when an issuer will try to prevent a cardholder from closing a credit card by providing an enticement to keep the card open and active. 

Since issuers spend a lot of money to attract new cardholders, it’s generally in their best interest to keep their customers happy and satisfied, otherwise the issuer won’t recoup what they’ve spent to acquire you as a customer in the first place.

An incentive offer can include a waived or reduced annual fee, bonus rewards points or miles, a statement credit or other perks. The goal is to keep you as a customer and, hopefully, to keep you using the card.  

Retention offers are also often tailored to individual customer profiles and spending behaviors, with the hope that a more personalized effort will enhance customer satisfaction and loyalty.

How to get a retention offer

If you’re on the fence about whether to close a credit card or just curious to see if you can qualify for a retention offer, you have to choose your words carefully when calling the issuer with your inquiry.

That’s because if you call the number on the back of your card or use the issuer’s online chat option and lead with a statement such as “I want to close my card,” a customer service representative or even an automated system may take you at your word and just close the account.

Instead, you should ask to speak with a customer service rep (or through the card’s online chatbot) and express the specific reason on why you are thinking about closing the card. 

For example, you may say, “I’m having a hard time justifying paying the annual fee on this card and am considering closing it” or “Before I close the card, are there any retention offers available that will keep me from doing that?”

You may be transferred to a retention department or the customer service rep may be able to help you directly.

If it’s an annual fee that is making you consider closing a card, the best time to contact the issuer is when the card renews and the fee is just posted to your account. You can then begin the conversation saying that the annual fee just posted and you’re considering closing the card because of the fee. You can then ask if there are any retention offers that will make you reconsider.

The representative may tout all the benefits of the card and try to talk to you into keeping the card open without any concessions at first. If so, you’ll have to stand firm by clarifying what it is exactly that’s making you consider closing the card to see if what the rep will do next.

Just know that when seeking a retention offer, the issuer may not honor your request for myriad reasons. In that case, you’ll need to decide if you want to go ahead and close the card or not.

Types of credit card retention offers

There are several types of retention strategies a card issuer may present to keep you from closing your credit card:

• Annual fee reduction or waiver. If a card’s annual fee is your reason for potentially closing a card, an issuer may offer to waive or reduce the annual fee for a year. 
• Statement credits. You may be offered a statement credit or be asked to meet a certain spending requirement in order to earn that statement credit. 
• Miles, points or cash-back increase. If your card is a rewards card, you may be offered a certain number of miles, points or an increased cash-back rate to keep the card open. However, that offer may be tied to meeting a spending requirement on the card, such as a 40,000-point bonus if you spend $5,000 on the card. Or you may be offered an increased cash-back rate for a certain period of time for certain purchases.

Once you weigh a retention bonus to determine whether it offers enough value for you to keep the card open, then you can either accept or reject it. 

Keep in mind that if you’re still undecided about closing the card, you aren’t required to go through with that request if you turn down the retention offer. However, there’s no guarantee you’ll receive another retention offer if you choose to call and try again. The customer service rep may ask if you’d like to proceed with closing the card and you can either say yes or no or that you need more time to think about it.

Closing a credit card can be done in just a few steps: Here’s how.

When should you ask for a retention offer?

Retention offers are typically a one-time perk, so reserve your requests to when you really are considering the value of a particular card.

The best time to ask for a retention offer is when an annual fee comes due. That provides the perfect opening for a retention offer discussion with a customer service representative. Otherwise, you can call and ask anytime, although the general advice is to limit retention requests to no more than two to three times a year. 

Your odds of success may be greater if you’ve only had the card for a year (an issuer doesn’t want to lose a new customer), if you tend to use the card a lot (banks make money each time you use the card) or if you have been a long-time loyal customer in good standing. 

It’s also important to note that there is no guarantee you’ll get a retention offer as policies vary across issuers. Economic and business decisions also factor into an issuer’s decision of whether to offer retention bonuses. For example, if the economy isn’t doing well, an issuer may try to protect its bottom line and pull back its retention offers to mitigate future risk.

When seeking a retention offer, keep in mind that you may not always get exactly what you’re looking for. For example, while you may want an annual fee waived on a rewards card, you may only be offered points or miles instead. So, keep an open mind and consider whether the value of the retention offer is worth keeping the card open.

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Tips for maximizing your credit card rewards

If you don’t receive a retention offer that convinces you to keep a rewards card open, you’ll need to redeem any cashback, points or miles you may have accumulated on the card you want to close or, if possible, transfer them.

Keep the card if you’ve had it less than 12 months: Check your card’s terms and conditions before closing or downgrading a card that you’ve had for less than a year as you may risk forfeiting any welcome bonus offer. For example, the Delta SkyMiles® Gold American Express Card (terms apply) card terms state that they may freeze or take away bonus miles from your account if you cancel or downgrade the card within the first 12 months.

Downgrade: Many issuers offer no-annual-fee or lower-annual-fee versions of rewards cards that you can downgrade to and that allow you to transfer rewards between cards. For example, if you want to downgrade from the $550-annual-fee Chase Sapphire Reserve® to the $95-annual-fee Chase Sapphire Preferred® Card, you can transfer your Chase Ultimate Rewards® points to the Preferred card by talking to a customer service representative before you close the Reserve card.

Transfer your rewards: Hotel and airline credit card miles and points are typically automatically transferred to the brand’s loyalty program around the end of each billing statement period. Ensure any recently earned rewards are transferred before closing the card.

Also, some rewards cards allow you to transfer points or miles to loyalty accounts of their travel partners. For example, you can transfer Chase Ultimate Rewards points to multiple airline and hotel loyalty programs before you close a Chase Ultimate Rewards-earning card.

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