Monday, August 11, 2014

Mixed Retention

Back in February, I wrote about how my father was able to secure a few extra points and waived fees by simply calling up the banks when his credit cards were due for their annual fee to hit.

This past July, it was time for another round of closure or retention. The lineup was as follows:
  1. Chase Ink Bold Mastercard
  2. American Express Starwood Business
  3. Citi Thank You Premier Visa
  4. Citi American AAdvantage Visa
Chase Ink Bold Mastercard
My mother had opened up this card back in June 2013 and earned 60,000 Chase UR points for spending $5,000 in 3 months. This was one of the cards that helped us earn enough UR points to transfer to United Airlines for our business class flights on Lufthansa to Italy.

It gave us a great 5x on our spend on our Time Warner cable TV and Verizon Wireless bills each month. We also found some creative ways to spend at Staples (ordering our bottled water, buying gift cards for Old Navy shopping and Amazon shopping) for another 5x on office supply expenditures as well. Over the course of the 1st year (with no annual fee), we definitely generated at least another 20,000+ UR points in addition to the 60,000 sign up bonus. Valuing UR points at about 2 cents/pt, we earned a tax free $1,600 in rebates for spending the same amount as we would have normally but by using the right credit card.

But now that it was time to renew the card, but pay $95 for the upcoming year. Given my father also had another Chase Ink Bold card for his small business, we didn't see the need for paying a fee for a second Ink Bold card with duplicate benefits. So we called up Chase to see if we could close the account (or if they would make us an offer to keep it open).

Some people on Flyertalk reported getting 10,000 points for keeping the card (and paying the $95 fee). When we called, they made no such offer. We then asked if we could "downgrade" the card to the Chase Ink Cash card (no annual fee, but a similar 5% earning on telecom/office supply stores). They declined as well.

At some point during calls like this, we would expect to hear, "Mr. Songer, you've been a great customer with us since 20XX, so we'd hate to lose your business..." But this call, there was nothing. Apparently, they wouldn't hate to lose this business at all.

Left with no options, we decided to close the card outright and avoid the $95 fee.

Outcome: FAIL

American Express Starwood Business
This was going to be a bit of a gamble. Most of the time, when we're threatening to close the card, we're more than happy to follow through. Sometimes, however, we're just playing chicken and will balk if they call our bluff. The Starwood Amex is one of those situations.

My mother opened this card this card in June 2013 when there was a 30,000 SPG point offer for spending $5,000 in 3 months. Now, my family (a) loves Starwood hotel properties and (b) values a SPG point at about 2.5 cents/pt - the highest of any point/mile currency. But most importantly, my family achieved Starwood Platinum status thanks to the help of getting the 2 stay / 5 night elite credit just for holding the card.

Since we actually had a lot of Starwood Amex cards (between my two parents with both personal and business versions, we actually didn't need to keep this one to earn our SPG points. We had plenty of available credit with the handful of open SPG Amex cards.

However, the fact that this card gave my father the additional 2 stay / 5 night credit definitely helped us reach 50 nights last year to earn both Starwood Platinum status as well as 10 Suite Night Award coupons - which we definitely used this past year. Without the elite credit, we would have fallen short last year and this year.

My Father: "We enjoy the card, but I'm just not sure it warrants another $65 fee to use the card another year."

Representative: "I"m sorry, but I cannot waive the fee."

My Father: "Um, OK. Then I'd like to cancel the card..." (long drawn out, waiting to be interrupted with a counteroffer)

Representative: "OK, I can help you with that!"

So when the agent quickly confirmed his request so quickly, my father called an audible and stopped the Representative. "Um, actually wait one second, I want to make sure with my wife. I'll give you a call back."

Representative: "Sure thing. Have a nice day!"

We kept the card open and paid the $65 fee, rationalizing that 2 stays at a Starwood hotel would cost at least $150 out of pocket and time.

Outcome: FAIL

Citi Thank You Premier Visa
This Citi credit card was actually 2 years old. My mother opened it in June 2012 when they were offering 50,000 Citi Thank You points for $3,000 spending in 3 months with no annual fee the first year.

But when the $125 annual fee came due the following year (2013), we called and were able to negotiate a $75 statement credit to partially offset the fee. Though we'd have to pay $50 net, we took that offer, because we still had my father generating a ton of Citi Thank You points using his 5x earning Citi TY Preferred card for another 7 months.

The Premier version card gives you 1.25 cents/point value when redeemed for flights, but the Preferred card only gave you 1.00 cent/point. So redeeming for an extra 0.25 cents would be worth paying $50 out of pocket for, if and only if we would redeem for at least 20,000 Citi Thank You points during the year. We ended up redeeming over 514,000!

So for paying the reduced annual fee of $50, we were able to redeem for an additional $1,285 of flight value. Smart move, Dad!

But now, it was July 2014 and we no longer had the benefit of the 5x Preferred card to generate massive amounts of Citi TY points. So we redeemed all the rest of our Citi TY points (at a 1.25 cent/pt rate) on our upcoming October flight to Albuquerque, New Mexico and were prepared to close the card. But when we called Citi, they were reasonably accommodating.

Instead of just waiving the fee outright, they proposed a spending challenge. If we spent $1,000 in each of the next 3 billing statements, we would receive an additional 1,000 Citi Thank You points and a $125 statement credit - enough to offset the annual fee. Of course, we'd still be charged (and have to pay) the $125 annual fee upfront, but at least we have an opportunity to earn it all back in the form of a statement credit. We accepted.

Outcome: SUCCESS!

Citi American Airlines Visa
This was another Citi card that we've had since 2012. At that time, we were able to apply for 2 Citi AA cards (one Amex and one Visa) at the same time. It was called the "Two Browser Trick" and we were able to earn 50,000 AA miles on each card for 100,000 total.

Fast forward to 2013, we called to get retention offers on both cards. But interestingly enough, my father received no offer on his AA Amex, but did get a fee waiver on his AA Visa. So he kept the Visa for another year until this past July when the annual fee came up.

There are a ton of travel perks by having/using these Citi AA credit cards, including Priority Boarding, 2 AA Lounge Passes, Free Checked Bag, and 10% Mileage Rebate when redeeming AA award miles. Unfortunately, we didn't fly American Airlines that much and didn't end up redeeming any of our 480,000+ AA miles either.

But nevertheless, at some point, we would be redeeming our miles and likely would want one of these Citi AA cards, but it was foolish to pay $85 for speculative optionality. So we called to see what offers we could get, but they didn't offer us any. No waived fee. No statement credit. No AA miles. No challenges.

But given my father had a $20,000 credit limit on this card (valuable asset for future trades), he didn't want to close outright. Instead, he asked to downgrade the card to a no-fee Citi Dividend card. The representative processed the product change and told him that the $85 due on his monthly statement would be reversed before his statement balance was due.

The Citi Dividend card isn't that amazing (straight 1% cash back on all purchases, no ability to transfer to airline miles or hotel points), but they do offer quarterly 5% cash back categories where you can get up to $300/year (ie, spending $6,000 in bonus categories).

But unlike Chase Freedom or Discover IT quarterly bonuses, there's no quarterly $75 cap on bonus earning - you just have an annual cap of $300 in rebates. So if there's a quarter with a particularly great category (i.e., drugstores), then my father can surely find a way to maximize his window of opportunity.

Outcome: SUCCESS!

No comments:

Post a Comment