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This is the 5th post in my intro series to travel hacking. For a list of other posts, check out my post on how to travel hack your way around the world.

Most credit cards with a good sign up bonus also come with an annual fee. Fortunately, the vast majority of these are waived the first year. Unfortunately, most people get rid of the card immediately after getting the bonus, which can be a huge mistake. Not only will the credit card company take notice, but it may negatively impact your credit score much more so than waiting until the end of the year.

So what do you do when your annual fee hits on all of the new cards you just applied for?

As I see it you have four options: keep the card, convert the card, downgrade the card, or cancel the card.


Option 1: Keeping the Card

Some cards are worth keeping – be it the annual bonus, the benefits, or perhaps just the way it feels in your wallet. In this case you have two choices – you can opt to pay the annual fee (the coward’s way out), or you can try and bargain with the company to waive the annual fee.

When bargaining I’m either looking for the CC company to waive the annual fee, or have them offer me enough points to make it worth my while to keep it. Usually I do the following:

1) Call in 1-2 months in advance of the annual fee – in my experience, this window gives you the most leverage, since you’ve put enough spend on the card to make you a valued customer and (perceptually) you’re not just someone dumping the card after getting the bonus. It also gives you a couple of months to weigh retention bonuses or wait for better ones, should they occur.

2) Don’t tell the Customer Service Rep you want to cancel the card – I like to call in and say that I’m considering whether or not I want to keep the card for another year and ask the representative if there are any retention bonuses available. Extolling the virtues of the card never hurts either.

3) If you don’t get a good offer, hang up and call back later – sometimes there just aren’t any good offers at the moment. When this happens I thank the representative politely, hang up, and call back a few days later. For the most part, I don’t think the representatives have any sway over what offers they can give, and promotions change constantly, so it doesn’t hurt to call back.

4) If no offers appear – convert, downgrade, or cancel the card. If the card is worth keeping (like the Chase Sapphire Preferred Card) I’ll pay the annual fee. If not, I’ll covert, downgrade, or cancel the card.


Option 2: Convert the Card

Some companies will only allow you to have a certain number of personal cards open. Chase is a notorious example. While most people report that you can have 4 personal cards with Chase (including Mrs. Selfish!), for whatever reason they’ll only allow me to have 3. Fortunately, they’ll allow me to trade an existing card for a new one in a heartbeat.

Take for example, our latest churn. Rather than canceling our Chase United Explorer card, which was coming up on its annual fee, we both applied for the Chase Marriott card instead. As predicted both Mrs. Selfish’s and my credit applications received the dreaded “pending” response.

When I called into the reconsideration line I was given the option of converting my United Card into a Marriott card, gaining 70,000 Marriott Rewards points and a free night in the process!

Instead of decreasing our credit limits and shortening the overall average lifespan of our accounts, Mrs. Selfish and I received a combined 140,000 Marriott Rewards points and two free nights in a category 1-4 hotel, which got us a total of 5 nights at the JW Marriott in Hong Kong, and 4 nights at the JW Marriott Beijing!


Option 3: Downgrade the Card

If I can’t get an annual fee waived, I’ll try to downgrade the card to a no-fee version. For instance, with American Express’ Delta Card, I downgraded our cards to the American Express Blue Sky card. I will probably ever use that card, but downgrading has three practical purposes:

  1. It gives me access to more credit and thus makes my credit score a little higher.
  2. It keeps the account open, which doesn’t shorten the length of my credit history.
  3. It acts as a bargaining chip in the future should I want another card by that CC issuer.


Option 4: Cancel the Card

This is the worst option, and the one that can hurt your credit the most, especially if you have a short credit history. Before we started applying for credit cards in bulk Mrs. Selfish and I would simply cancel a card when the annual fee came up. Since then, we’ve managed to have most annual fees waived or converted the cards into no-fee versions.

I have, however, canceled a number of business cards since they don’t impact my personal credit. When doing so I find the easiest way to cancel is to send a Secure Message to the card company via your online account. This usually results in the closure of the account within 4-8 hours of sending the message.

If you’re thinking about canceling a personal card, however, at least make sure you transfer as much credit as possible to another card. Most companies will allow you to transfer all but $1000 – $2000 to another card, and some like American Express (or Chase via SM) will even allow you to do this online.



When a credit card’s annual fee becomes due, remember you have more options than just canceling the card or paying the annual fee. Converting or downgrading a card allows you to maintain a higher credit score, which in turn gets you access to better offers.

Since credit cards are the easiest way to gain millions of miles and points, be sure to calculate your options carefully!