The Newest Fad - A Credit Card Retention Offer
If you're as much of a credit card nerd as me, then you've probably noticed an interesting new trend in the credit card game: the art of the retention bonus.
As credit card churning gets more and more popular, with YouTube channels like Trek Trendy, Sam Chui and Nonstop Dan glorifying the first-class lifestyle you can achieve with credit card points, members of different credit cards are trying to squeeze every last point out of their high annual fee cards after they juice the sign-up bonus or welcome bonus that comes from the first year. So today, let's chat about what a retention bonus is, the different types of retention bonuses and how you can get one for yourself.
What Are Credit Card Retention Offers?
A retention bonus is a one-time "best offer" reward issued to you by a credit card issuer in exchange for keeping your account open. These can take the form of statement credits, cash back or additional rewards points credited to your account.
In order to achieve a retention bonus on your credit card, you'll have to enter into an agreement with the credit card companies. If you violate that agreement, you could be subject to getting your retention bonus revoked. These agreements generally come in two forms:
Reaching a set spending requirement in a specific time frame, or
Keeping your card open for a certain timeframe (i.e not cancelling your account)
If you do manage to hit these retention agreements and get the bonus, however, these can be quite lucrative.
Retention Bonus Examples
Like I mentioned earlier, news of people receiving significant retention bonuses are beginning to flood the internet, so there are a ton of examples around of people getting PAID for just keeping their cards open, or spending "nominal" amounts of money. Here are some useful data points on the best retention offers I've seen so far:
One Reddit user was offered a $150 statement credit on their American Express Platinum Card, just to keep the card open, or they were offered an upgraded sign-up offer to downgrade into the American Express Gold Card
One reader of "The Points Guy" got a $250 statement credit on their Chase Sapphire Reserve card, no questions asked. That same reader also got a 30,000 mile bonus on their American Express Delta Platinum card.
YouTuber Mark Reese got a 40,000 point retention offer on his American Express Schwab Platinum Card (about $800 in value) if he spent at least $3,000 on his card within three months.
This last example is actually one I want to stick on for a moment, because Mark shows the entire process and script that he uses for getting retention bonuses for his premium credit cards. What he also highlights is the amount of pushback that he gets from the American Express customer service representatives, which seems to be a common theme.
In other examples across the web, American Express continually comes in as the pushiest issuer, and they're the ones that seem most hesitant to give you a retention bonus. However, their retention bonuses do seem to be the most lucrative in the market, especially when attempting to keep Amex Platinum Card clients as they seem to be the ones most worth keeping.
When Should You Ask for a Retention Bonus Offer?
There are a few instances of exactly when you should ask for a retention offer, both in the calendar year and in your general frame of mind.
The first is if you truly are not getting the value you thought you would on your credit card. I know the thing to do now is churn credit cards to get the massive sign-up bonuses and then bounce away to a new one, but many of these cards do offer significant value via programs and points multipliers that you should be doing your research on prior to opening a card. However, if you're really not getting the value you thought you were going to, then asking for a retention offer can help sweeten the deal a little bit, and there's incentive for the card issuers to keep you around.
The second is if the terms change on the card you originally signed up for. What do I mean by this? Well, my working theory on the deluge of retention bonus posts we've been seeing lately is that the bump in the annual fee for the American Express Platinum Card, along with odd changes to the features of the card and the general downgrade of the "Amex Offers" program, have led to many wanting to cancel their cards. A $150 annual fee increase isn't nothing, so a retention offer can be seen as a way to claw some value back from the card.
The third actually has to do with the amount of time you've held your card. The best date to ask for a retention offer is within a month of when your annual fee posts, as that annual fee is refundable within that month (typically, but check your card issuer's terms). This is when you have the most leverage; if you're truly unhappy with the card, and the retention offer isn't worth it, then this is the time you can cancel your card and get your annual fee refunded.
How Do You Ask for a Retention Offer?
The first step to opening the conversation is to get on the online chat function of the app or website of the credit card company (you could also hop on a phone call using the phone number on the back of your card, but it's easier on the chat). From there, it's as easy as some back and forth with a stranger in a call center that, full disclosure, will hate you.
You'll usually be redirected to the retention department, which is a mixture of customer service, sales and marketing for these companies because they REALLY don't want to lose you as a customer. As stated by BJ Novak in that one real business lesson everyone learned from The Office, it's much more expensive to acquire a new customer than to keep an existing one, so they'll do whatever they can to keep you.
However, this is not true for every issuer. According to Ask Sebby, Bank of America is a card issuer without a retention department, so if you have a Bank of America credit card, you might be SOL.
Ground Rules for Retention Offers
First up, don't be a dick. You are looking to establish your case of value in the card, not rubbing it in the face of the company that you're trying to take them for all they're worth. The person on the other end of the chat does have some power to offer you various bonuses, but they can also choose to not offer you anything if you're rude about it.
Something else to keep in mind is a point I've already mentioned, but it's worth stating again for those of you in the cheap seats: retention offers vary by card issuer, the customer (you) and other factors on the card. This means that you should not bring up "well my buddy Steve got a 50,000 point retention offer so I should get one too." What you don't see ist that Steve likely has more spend on the card than you (generating more revenue for the company), likely has a better card with a higher annual fee, or has a longer relationship with the issuer that makes him more valuable than you. However, if you're not happy with the first offer they give you (like a travel credit or something that doesn't provide enough value), feel free to ask for a better offer! The worst they'll say is "no," and you might get some extra Amex membership rewards points out of keeping that big annual fee.
Third, don't be discouraged if you don't get an offer. If you got the card for a specific reason (travel perks, extra points on groceries, cash back), then this would have just been the icing on the cake. However, if you are genuinely unhappy with the card, then you can look for a downgrade offer.
Essentially, a downgrade offer is a miniature version of a sign-up bonus to move from a high tier card into a lower tier card, without closing your account. This will have the benefit of lowering your annual fee, but you will also lose your perks with the original card. Downgrading is also useful if you don't want your credit score to get dinged, which happens when you open and close credit card accounts in rapid succession. For more on how credit works, check out my article on the American Express Platinum Card breakdown.
Are There Downsides to Retention Offers?
Something I see bandied around the internet about retention offers are the potential risks, along with one rumor that I want to dispel.
The biggest myth I see about asking for retention offers is that, if you're too pushy, the retention agent can close your account. They cannot do that. You can only have your account closed if you specifically request it, or for a financial reason that will be between you and the issuer. A retention agent will never close your account, but being in good standing with the credit card company is table stakes for this entire conversation.
Next, asking for a retention offer will not harm your relationship with the issuer (unless you're a dick), but it may impact your ability to get retention offers in the future if they see you as someone looking to juice the system.
Finally, you might have to do some math to figure out if the retention offer is actually worth it to you. If the annual fee on your Platinum Card is $695, but you don't use it, will a 40,000 point bonus (~$800 in value) really be worth it for you, considering the amount you have to spend to get to that bonus? Do you really want to be locked into this card for another year just to essentially net $105?
The Bottom Line
To me, retention offers are the holy grail of credit cards. If I have a card that I've researched, opened, achieved the sign-up bonus and am using regularly, then getting a little boost once in a while is a beautiful thing. I personally have my American Express Delta Platinum and my American Express Platinum Card up for renewal in the next 12 months, so I will absolutely be trying these to see if I get offers. Will I cancel if I don't get an offer? No! I love these cards. But the icing on the cake is too good to ignore.
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