Credit Cards That Waive the Annual Fee the First Year

A very common trick/tactic (whatever you want to call it) in the credit card churning world is to open a card that waives the annual fee the first year and then cancel it before the annual fee is eventually charged.

In short, you get the perks of said credit card for 365 days (maybe a little less) without having to pay the typical annual fee.

Usually these cards offer something special, seeing that they charge you a membership fee to jam the thing in your wallet, so it can be a worthwhile strategy to maximize your point-earning or your cash back. Or your free hotel stays.

Of course, you may not want to anger the credit card gods, aka the card issuers, by doing this all the time, or simply opening and closing cards right after you get the sign-up bonus or whatever else they’re offering.

Credit card issuers aren’t stupid – if they see you exploiting their rewards program they might tell you to take a hike, for good. If you stick around, they may also try to lure you back in with anniversary bonuses, like a free hotel stay every year, or X amount of bonus points if you spend Y in one year.

Credit Cards That Waive the Annual Fee the First Year

Card Issuer Card Name Annual Fee Notes
Amex Morgan Stanley Platinum $450 Must maintain Reserved client status
Amex Ameriprise Platinum $450 Must be Ameriprise client
Amex Premier Rewards Gold $195
Amex Starwood Preferred Guest $95
Amex Starwood Biz $95
Amex Gold Delta SkyMiles $95
Amex Green $95
Amex Gold $160
Amex Biz Gold $175
Amex Plum $250
Amex Gold Delta SkyMiles Biz $95
Amex Green Biz $95
Bank of America Spirit Airlines MC $59
Barclaycard Arrival Plus $89 Churnable
Capital One Venture Rewards $59
Capital One Spark Cash Biz $59
Capital One Spark Miles Biz $59
Chase Ink Preferred $95 Might be waived in-branch
Chase Sapphire Preferred $95 Great bonus
Chase IHG Rewards $49 Maybe keep for free anniversary night
Chase United Mileage Plus Club $450 Targeted offer
Chase United Explorer Biz $95
Citi AAdvantage Platinum Select $95
Citi AAdvantage Platinum Select Biz $95
Citi AAdvantage Gold $50
Citi ThankYou Premier $95
PNC Bank Premier Traveler Visa $85
Santander Bank Bravo Credit Card $49 Have to apply in branch
TD Bank Aeroplan Visa $95
TD Bank First Class Visa $89
US Bank FlexPerks Travel Visa $49
US Bank FlexPerks Business Edge Travel $55
US Bank AeroMexico Visa Signature $80
US Bank AeroMexico Visa $45
US Bank AeroMexico Visa Secured $25
US Bank LANPASS Visa $45
US Bank LANPASS Visa Secured $25
Wells Fargo Propel 365 Amex $45
Wells Fargo Propel World Amex $175 Have to apply in branch

 

*No matter what card you apply for, whether listed above or not, you should always do a quick web search to determine if there’s a special offer where the annual fee is waived. Sometimes card issuers will waive the annual fee for a limited time, so it doesn’t hurt to double-check before you apply. However, if the deal is better with the fee, it might just make sense to pay it…

Are Credit Cards with Annual Fees Worth It?

In a nutshell, heck yes! You just have to be mindful about how you’re going to recoup that fee. If you have no use for the points or the perks offered by the card, you’re throwing away money.

But if you can clearly benefit from the card, despite the annual fee, it can be a great move.

For example, the Chase Sapphire Reserve card has a $450 annual fee, steep by any measure. But, they offer a $300 travel credit each year, which covers anything from airline tickets to hotels to Uber. If you use any of those things, you’ve already knocked the annual fee down to a  much more reasonable $150.

Factor in the opening bonus (it was 100k, now 50k) and you’ll get at least another $1,000 or $500 in year one, assuming you meet the minimum spending requirement to unlock that sign-up bonus.

If we look at just year one, you’d come up at least $350 ahead, or $850 ahead if you got the 100k bonus. This is assuming you maximize the $300 travel credit, which isn’t hard to do given how flexible it is.

In reality, you can get a lot more value out of the card if you don’t just cash in your points for well, cash. If you transfer the points to airline partners, you could get thousands of dollars in value out of those points.

The same goes for other premium cards such as Amex Platinum, which incidentally just raised their annual fee to a staggering $550. But again, once you factor in annual credits, sign-up bonuses, free lounge access, and more, you start to see the value of paying the annual fee.

This isn’t to say that you have to keep the card year after year and continue to pay the annual fee. It might just make sense for a year, after which point you can cancel the card to avoid another annual fee. That’s for you to decide, but paying an annual fee, at least in year one, can be quite rewarding.

How to Get Your Annual Fee Waived

Even if the credit card issuer doesn’t waive the annual fee, there are ways to get it waived on a case-by-case basis simply by asking.

Just give them a call and tell them to transfer you to the retention department, kind of like what you have to do with your cable TV provider every other month.

Then give them a reason why you want the fee waived, such as:

  • I plan to cancel the card
  • I don’t use the card
  • The fee is just too expensive for me
  • I’ve always paid on time and use the card a lot
  • Ahh come on!
  • I’m active duty military

If those all fail, you can also inquire about downgrading the card to an annual fee-free counterpart, assuming you want to keep that line of credit open (for the sake of your credit score and credit history).

Pro tip: If you’re military, you might be able to get the annual fee waived. It doesn’t hurt to phone up your card issuer and ask, especially if the annual fee is pricey!

(photo: Nan Palermo)

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