Have you noticed that your credit card’s annual fee has gone up? You’re not alone. Many of us are finding that credit card annual fees are climbing to unprecedented heights, often reaching several hundred pounds. But don’t fret! If your credit card’s annual fee has increased, you have several options to consider before deciding what to do next.
Understanding the Rise in Annual Fees
In the past, many credit cards offered no annual fee or a modest fee of under £100. However, the landscape has shifted. Now, premium credit cards come with hefty annual fees, often with promises of added benefits and rewards.
But here’s the question: Is the value of these perks worth the cost? Let’s dive into your options.
Should You Stick with Your Card?
If you’ve received notification of a fee increase, your first option is to stick with your current card. While it might sting to pay more, there are often additional benefits to justify the increased cost.
-
Evaluate New Features: Many card issuers enhance their cards’ benefits to offset the annual fee hike. For example, when the American Express® Gold Card raised its fee from £250 to £325, it introduced up to £100 in dining credits with Resy and £84 in annual Dunkin’ credits.
-
Calculate Your Gains: If you think you’ll use these new perks, the fee may be worth it. Personally, I assess the value of the new features against the fee increase. For instance, I found I could easily use the Resy credits, so I decided to keep my Gold Card.
Time to Move On?
If the added benefits don’t align with your spending habits or lifestyle, it may be time to consider cancelling the card. Yes, you might face a temporary dip in your credit score, but that’s often a small price to pay compared to being stuck with an unwanted card.
-
Talk to Retention Specialists: If you call your issuer to cancel, be prepared to speak with a retention specialist. This person’s job is to keep you as a customer, and they may offer incentives like bonus points or a different card that better suits your needs.
-
Consider a Product Change: Sometimes, you can switch to a card with no annual fee while retaining your account number and balance. This option can save you money while still keeping your credit line open.
-
Downgrade Your Card: If you prefer not to cancel outright, consider downgrading to a no-annual-fee card. This way, you won’t incur extra costs, but you still keep a credit account active.
You’re in Control
Credit card issuers might be increasing their fees, but that doesn’t mean you have to accept it. You are the captain of your financial ship, and it’s important to steer it in the direction that best suits your needs.
If the new features and benefits of your card don’t justify the new cost, it might be time for a change. Remember, you can always say, “It’s not you, it’s me” when parting ways with a card that no longer serves your financial goals.
Final Thoughts
Navigating credit card fees can feel overwhelming, but you have the power to make the best choice for your financial situation. Whether you decide to stay or move on, understanding your options is key to making informed decisions.
