If you find that you are unable to make the most of your credit and are convinced that it is time to close the card, take a few minutes to consider revisiting your choice. One of the reasons to stay on and maximise your credit card is the retention bonus.
When an individual decides to close their card, banks usually promise them additional rewards or waive certain fees in order to retain their business. This offer is known as a “retention bonus,” and it might be wise to look out for one before you close your card. Here is everything you need to know about retention bonuses in order to make the most of your credit card.
Types of retention bonuses
Broadly retention bonuses are of many types, but all of them come under two main categories.
- Statement credit
Here the issuer might actually pay you in the form of statement credit to keep your card. Although not every issuer will agree to waive the annual fee,the statement credit is sometimes equal or more than the annual fees.
- Rewards boost
Instead of offering statement credit the issuer may offer extra rewards. This may be an extra point per AED spent for a specific duration of time or perhaps a quantity of bonus miles. However, this type of retention bonus has certain requirements attached to it. For example, you may be required to spend around AED 1000 in three months to get 6,000 extra miles.
Which among the two is better depends on your preference
Someone who travels frequently will be happier to receive miles instead of cash. However, someone who travels only once or twice a year may benefit more from cards that offer cashback instead of miles.
Making the call
Usually, conversations about retention-bonus happen over the phone. However, if you are sure you want to cancel the card then it can be directly done through the secure-message box on your bank website.
According to experts the best way to start this conversation is by building a rapport instead of just jumping to the point. You can then come to the point and inform that you wish to cancel the card by giving a valid reason, for example, “I am not travelling as much through the affiliated airline”. The person will then make a direct offer or transfer the call to a retention specialist. In case the person doesn’t seem interested hang up and try again.
Weighing the offer
Once they start showering offers, it’s time to start thinking. The first offer may not always be the best offer, so how do you determine whether you’ve been offered something worth staying on for?
- What are they offering others?
Rewards forums are filled with retention success stories. Although you might not be eligible for what you are aiming for, it’s always good to know the possibilities.
- What is the value of the card’s rewards?
Statement credit is easy to calculate- the value is equal to amount of the credit. However, calculating travel rewards are complicated because collecting miles and points from various cards are like managing different currencies.
- How much do you want?
After you have calculated the value of your rewards, decide how much you wish to settle for in order to keep that card. Decide whether you want statement credit or rewards boost.
Take a call
After you’ve calculated everything it’s time to take the final call. It’s simple if you’ve been given the desired offer go ahead or close the card. However, also consider other perks that you were able to use with the card and if you still think it’s not beneficial to you in any way, then it’s time to close it.
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