Here's Why You Should Always Call Your Credit Card Company Before Canceling Your Card

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Recently, my wife and I took a hard look at our credit cards and decided to cancel the one that we used the least. It was a cash back credit card that we had used frequently in the past, but had replaced it over time with cards that worked better for our situation. We couldn't cancel it through the mobile app, so my wife called the company to cancel it over the phone.

About 15 minutes later, she came back into the room, her face glowing with excitement, and told me she didn't cancel the card. Instead, the company offered us extra cash back on all our spending.

For the next six months, the card would earn 3% back on all regular spending (normally 1%), plus 8% back on our quarterly rotating bonus categories (normally 5%). The bonus would cap out at $2,500 spent.

I'm not alone in this. Credit card companies offer retention offers to keep as many clients as possible. While these offers are more common on cards with annual fees, any cash back or rewards card could technically have one.

And if you're thinking about canceling a credit card without talking to a customer service representative first, I'd strongly recommend reconsidering. You might be leaving money on the table if you do.

How to get a retention offer on your credit card

A retention offer is a way to keep you invested with a certain credit card issuer. These offers come in many forms -- annual fee reductions, bonus cash back or points, statement credits -- but their purpose is to dissuade you from canceling or downgrading a credit card.

Although retention offers aren't guaranteed, the most effective way to get one is to talk with a customer service representative. This could be over the phone or through chat. Let them know that the card is no longer offering you value or serving your needs. Tell them you're considering canceling it or downgrading (if it has an annual fee), but you'll stay if there was slightly more value.

In other words, you don't have to threaten to cancel your card to get a retention offer. Although we were sincerely going to cancel our credit card, you can go about it a different way. Tell them that you like "A" and "B" about the card, but "C" (perhaps an annual fee or a lack of rewards) is making you look at the top rewards credit cards instead.

Since retention offers are no big secret, you can even mention that you've heard of them and you're curious if you might qualify for one.

What if I don't get a retention offer?

You're not guaranteed a retention offer. That said, you could increase your chances by having a long history of on-time payments with that specific card. Since credit card companies want to retain their best customers, it would make sense to have a strong credit background (no late payments, for instance).

If you don't get a retention offer but feel you're a good candidate for one, try again on a different day. Wait until your card's annual fee is coming due (if it has one). Mention that you have better credit cards in your lineup. Likewise, mention competitor cards that you're thinking about getting (the more specific you are, the stronger you'll make your case).

Finally, if you, like us, truly want to cancel your credit card, I would still recommend calling the issuer first. Even if you're not interested in keeping it for the long term, you may get offered a bonus to stay. If you already got a welcome bonus on this credit card, you would essentially get a second one just by calling.

Give it a shot and if it doesn't work, oh well -- you can replace that card with a new credit card that works better for you.

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