Thinking of canceling your travel credit card? Do this instead
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The latest reports from the Federal Reserve have credit card companies worried. For the first time since 2011’s recession, May 2020 broke records for the lowest amount of revolving consumer debt.
That’s bad news for credit card companies, but it could be great news for you.
The COVID-19 effect on credit
Crushing unemployment from a global pandemic means that Americans are not spending like they used to. People do not have the disposable income to spend freely, and COVID measures like social distancing and quarantine have relegated the bulk of spending to online platforms.
However, credit card companies aren’t giving up so easily.
“Banks and cards are offering these retention offers because the likelihood consumers will cancel their cards due to the downturn in travel is high,” explains Alex Miller, CEO of travel and credit card website Upgraded Points.
“If people aren’t accessing [airline] lounges, aren’t eating out as much, and aren’t flying, there’s little reason to keep travel credit cards if consumers can’t ‘see a light at the end of the tunnel,’” Miller added. “The retention offers are generous to keep consumers engaged and spending, when ordinarily spend on travel credit cards would be down.”
In addition to hardship assistance, issuers are now offering special incentives and rewards for using your card. These offers can include everything from extra cash back to statement credits and more. Before you close your credit card account, these are some of the offers currently available from major credit card companies.
What are banks doing to retain customers?
Banks are giving some pretty impressive rewards to keep their customer accounts intact. For many companies, this means credits toward your monthly statement or an extension for new cardholders so that you can qualify for an extra welcome bonus.
“Typical retention offers include waived annual fees, statement credits and bonus miles,” says Miller. “Right now, we’re seeing more generous offers than usual — for example, credits that amount to half the annual fee.”
These are some of the top offers that banks are currently offering to entice customers and improve credit card retention.
You can also receive statement credits for wireless and streaming purchases as high as up to $320 for The Platinum Card® from American Express, in addition to an up to $200 credit with Amex Travel after renewing your card.
AMEX extended its period to earn welcome bonuses for three months for customers who opened new accounts between Dec. 1, 2019 to May 31, 2020.
Dining these days is complicated, so you can receive bonus miles on select cobranded cards – like 4 miles for every dollar spent at restaurants using the Delta SkyMiles® Gold American Express Card.
Some other rewards include:
- American Express® Green Card – Up to $80 in statement credits toward wireless telephone services through Dec. 31, 2020
- Delta SkyMiles® Gold Business American Express Card – 5 miles per dollar on Delta purchases through Dec. 31, 2020
- American Express consumer and corporate cardholders – Free year of Calm Premium (worth $69.99) through Sept. 30, 2020
Bank of America
Bank of America also extended its sign up bonus for an additional three months, including customers who signed up for cards between Jan. 1 and March 31. In addition to its 60-day payment deferrals, you can also receive extra rewards when you use your Bank of America® Travel Rewards credit card. Your Bank of America® Premium Rewards® credit card keeps it easy with an up to $50 statement credit toward grocery and dining purchases.
Capital One rewards you for that quarantine life, giving you extra perks just for using your card to eat and watch your favorite shows. With Capital One you can receive extra miles on streaming and phone service purchases through Sept. 30 when you use select Spark Business Cards. Capital One® Venture® Rewards Credit Card also receive those extra miles, but in addition, you get elevated rewards on all of your Uber Eats delivery orders through Jan. 31, 2021. Finally, Capital One® Savor® Cash Rewards cardholders enjoy UberEats delivery rewards, in addition to extra rewards on streaming services like Netflix and Hulu.
The information for the Capital One Spark cards and Capital One Savor card has been collected independently by Million Mile Secrets. The card details on this page have not been reviewed or provided by the card issuer.
This is a company that has really stepped up to the plate and delivered. There is a 90-day extension not just for sign up bonuses (for those who opened an eligible account between Jan. 1, 2020, and March 31, 2020), but there is also a grace period for your credit card, mortgage and auto payments. Chase gives you up to seven times the points on purchases like groceries, gas and dining when you use your Chase airline or hotel credit card. If you use your Marriott Bonvoy Boundless Credit Card or The Ritz-Carlton Credit Card (no longer available), you can get up to 10 points for every $1 spent on restaurants and gas through September 30.
Additionally, Chase is also these new offers.
- Chase Freedom and Chase Freedom Unlimited — You’ll earn $200 cash (20,000 Chase points) after meeting minimum spending requirements — plus, for the first year you have the card, you’ll earn 5% back at grocery stores, excluding Target and Walmart (on up to $12,000 in spending)
- Chase Sapphire Reserve® the Chase Sapphire Preferred® Card – Through September 30 earn 3-5x points for each dollar spent on gas and Instacart orders, up to $1,500 in purchases for gas and $3,000 in purchases with Instacart; earn 5-10x points on streaming services, up to $1500.
The information for the Chase Freedom has been collected independently by Million Mile Secrets. The card details on this page have not been reviewed or provided by the card issuer.
Citibank is giving its new customers one of the most generous extensions for welcome bonuses, extending the threshold to cards opened 12/1/19 through 5/31/20. You also have the option to use your rewards to pay the minimum amount due on your account using your ThankYou points and whatever cash rewards have been accumulated. While Citi Premier℠ Card customers receive three times the points on groceries and restaurants (a new ongoing benefit), Citi Prestige® cardholders can use their $250 travel credit for groceries and restaurant purchases made through Dec. 31, 2020.
Citi also has special offers for its American AAdvantage® cards.
- Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard® — Companion certificates issued through Dec. 31, 2020 receive a six-month extension through June 30, 2021.
- Citi® / AAdvantage® Executive World Elite™ Mastercard® — Accounts opened before March 31 receive a one-time courtesy credit of $225 credit upon renewal.
The information for the Citi Premier, Citi Prestige, Citi AAdvantage Platinum card has been collected independently by Million Mile Secrets. The card details on this page have not been reviewed or provided by the card issuer.
U.S. Bank also knows that people are using their credit cards for restaurant takeout and delivery orders, so all of your dining expenditures will now be eligible toward the U.S. Bank Altitude Reserve Visa Infinite® Card annual $325 travel credit. Cardholders will also receive three points for every dollar spent on dining through Dec. 31, 2020 on the Altitude Reserve.
Large retention bonuses that banks are offering during the pandemic
Credit cards are a competitive business. It is a financial landscape that is constantly shifting and evolving as rates fluctuate, incentives expire and new benefits rush in to take their place. With so many credit cards available today, credit card companies will do everything they can to stay one step ahead – and that means doing whatever it takes to keep your business.
Retention offers are one way that credit card issuers entice you to remain a loyal customer. If you agree to keep your account open, you can receive anywhere from 5,000 to 50,000 points or maybe $100 to $500 in statement credit if you spend a certain amount within a limited time.
The COVID-19 pandemic has not only increased the availability of these retention bonuses, but they are also bigger and better than ever before. And before you cancel your travel credit card because of the high annual fee and travel benefits you may not be using, you should so some math as you may actually profit off of these bonuses.
American Express is one such example. Data points from FlyerTalk indicate that you can receive some pretty huge bonuses for renewing your card right now. Some examples include:
- The Business Platinum Card® from American Express — According to Doctor of Credit, some cardholders are being offered 30,000 Membership Rewards points on renewal and then an additional 50,000 Membership Rewards points after $40,000 in spend within three months.
- The Platinum Card® from American Express — 50,000 Membership Rewards points or a $500 credit with no spending requirement
- Hilton Honors American Express Aspire Card — 10,000 to 15,000 Hilton points with no spending requirement
Amex Membership Rewards points are worth 1.8 cents each according to our points valuations, so 50,000 points would be worth a whopping $900. The retention bonus alone far outweighs the $550 annual the card carries (see rates & fees), and that’s on top of all the other COVID-related benefits the card has recently introduced.
For most of these programs, there is no minimum spend requirement, so you can save your money and still reap the rewards of membership just for keeping your account open another year. It’s also possible you won’t have a retention offer associated with your account, so it’s not guaranteed you’ll be eligible for one of these bonuses.
How to ask for a retention bonus
Sometimes, it can be as simple as a phone call. When you call your credit card issuer to tell them that you want to close your account, the warning bells ring, and suddenly your issuer becomes very interested in keeping you happy. A Million Mile Secrets team member received a 20,000 point bonus from American Express just for making a two-minute phone call.
Retention bonuses are designed to assuage unhappy customers and tempt them into keeping their money with the company for another year. This can mean serious bucks for you that can make a huge difference during a global pandemic.
Simply let your credit card issuer know that you are considering closing your account and would like to know if there are any incentives if you decide to keep it open. Even if you walk away without a retention offer, it costs you nothing to try, and you have everything to gain.
You’ll want to read our full guide on credit card retention offers to make sure you’re asking correctly and don’t accidentally cancel your card!
With unemployment high and economic uncertainty abounding, Americans are carefully guarding their purse strings. Now more than ever is a great time to use those credit cards for all of the ongoing spending bonuses. And before you close a credit card, make sure to call your bank and ask if a retention offer is available — it could make a lot more sense to hold onto your travel credit card than you think.
For the rates and fees of Amex Platinum card, please click here.
Featured photo by Getty Images.
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Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $1,000 toward travel when you redeem through Chase Ultimate Rewards®.
2X points on travel and dining at restaurants worldwide, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases.
Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 80,000 points are worth $1,000 toward travel.
Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash’s subscription service. Activate by 12/31/21.
Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.
Either $5 or 5% of the amount of each transfer, whichever is greater.
Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)