Wednesday, February 3, 2016

Retention Year 3

Every year, my father calls up his favorite banks and asks if there were any offers to compel him to keep their credit cards open for another year. After all, when you have as many credit cards as my family does, spending $95 every year for each premium credit card can start to add up. So either (a) the banks will have to give him more than that in value each year or (b) will have to waive the fee.

This past year there was also a lot of turbulence in the hotel/airline world, including the announced acquisition of Starwood Hotels. This development changes our strategy because my family has several SPG American Express cards each with a $95 annual fee. We used to think we'd keep this card forever, but assuming the SPG program goes away, the Amex card will hold little value to us.

Additionally, we likely won't fly enough on paid flights this year to qualify for United Gold status. As such, the United Select Visa (which used to help my father re-qualify for Gold each year and offers 3x on United spend) has less value to us than in prior years.

So these "must have" cards have lost some luster, especially if we can't get Amex and Chase to offer some special retention promotion to offset the fees. Recall that 2 years ago, my father received 2,000 SPG points in exchange for paying the $65 annual fee (now $95) for his SPG Amex and an additional 5,000 United miles for paying the $95 annual fee for his United Select Visa.

But every year is different.

Last year, there was no offer for the SPG Amex card but a $100 statement credit for his United Select Visa. So we weren't sure what to expect in 2016 when my father called.

Starwood American Express
After saying he wasn't sure about keeping the card for another year after the $95 annual fee posted, the first Amex representative immediately transferred my father to an Account Specialist. But the Specialist could only offer him a $25 statement credit this year.

Despite my father's concerns over the continuation of the SPG program following the Marriott transaction, the Specialist didn't have anything else to compensate for the annual fee. He did, however, suggest that there would be an incentive for those SPG cardholders to convert to another Amex product if/when the Marriott transaction closed and the SPG loyalty program ends. Since Marriott is the larger company and has a historic relationship with Chase, the likely scenario would be that American Express would have to shut down the SPG Amex product line and see if cardholders would be willing to convert to another comparable Amex product, such as their Membership Rewards card or the Hilton Amex cards.

While he obviously had no inside information, he referred to Costco Amex holders receiving a promotion of up to $200-300 for converting their Costco Amex cards to Sam's Club Amex cards after Costco terminated their Amex relationship and switched to Citi.

So my father took the $25 statement credit and will see what conversion offer comes down the road later this year.

[UPDATE 2/12/16:  We called back for another matter completely - to pre-authorize a very significant charge in excess of our credit limit. We mentioned that last time we did this transaction, it was declined despite calling ahead to pre-authorize it. We didn't expect anything other than allowing the transaction to go through, but to our surprise, the phone agent also said she would give us 2,000 SPG points as a loyalty credit. Not too shabby!]

Chase United Select
Chase was his next call and unfortunately, not a great outcome. He was greeted by a friendly customer service representative who outlined the valuable benefits of this outdated card (which is no longer offered), including 3x on purchases as well as 2x on restaurants, transportation and home improvement stores.

However, the $95 fee wasn't ideal, so he said he was thinking of cancelling the card.

The agent countered with an opportunity to downgrade to a no-fee United card that would earn 1 mile for every $2 spend. Given my father could earn 2% cash back on every $1 spend with his Citi DoubleCash card, this new offer wasn't attractive at all. No thank you, Chase.

Instead of cancelling, though, my father decided to hang up and call again (HUCA) in another week.

[UPDATE 2/12/16:  We called back and this time, sounded more certain that we were going to close the account. They agent immediately offered a $60 statement credit or to downgrade to the no-fee version. We took the statement credit.]

Chase Sapphire Preferred
My mother had a $95 annual fee on her Chase Sapphire Preferred card as well. We hardly ever use this card and only applied because of the 40,000 UR point sign up bonus. Relative to the other card products out there, earning 2x on dining and travel is the average, not a highlight.

Instead of closing, however, we decided to keep the $35,000 available credit line and convert the card into a no-fee Chase Freedom card.

Even though my mother already has a Freedom card, having a second one would allow her to earn more 5% bonus categories each quarter. When they offer 5x on groceries, for example, we'll definitely find ways to pre-spend at our usual stores via gift cards to use over the rest of the calendar year.

We still have to call Citi (for my mother's American Airlines Amex) and Barlcays (for my father's US Airways Mastercard), but we'll see how customer friendly those banks are.


  1. Interesting. We earn no rewards for using our credit cards here in Ireland.

  2. I just found your Europe Series a few days ago. It inspired me to also pursue my dream of going to Europe someday. I might also do it solo like what you did. I really enjoy reading all your entries. Thank you so much for sharing your experiences.

    europe vacation planner

  3. I really had a great time with your post! I am looking forward to read more blog post regarding this! Well written

  4. I just found your Europe Series a few days ago. It inspired me to also pursue my dream of going to Europe someday. I might also do it solo like what you did. I really enjoy reading all your entries. Thank you so much for sharing your experiences.

    spain itinerary