6 Ways to Avoid Paying Credit Card Annual Fees

One of the biggest complaints about premium travel credit cards are the annual fees. While I personally think the value of the rewards far exceed the annual fee, some people just can't shake the feeling of having to fork out cash upfront.

However, there are plenty of ways to reduce or even waive the annual fee.

Disclaimer: Some of the links below are referral links, which means I earn a small commission at no additional cost to you. This post is not sponsored by any of the companies mentioned. All opinions are my own.

Last Upated: June 10, 2019

1. Get a credit card without annual fees (duh)

The most obvious solution of course. Personally, I think most cards that don't have annual fees don't offer particularly good rewards, but there are a few in the mix that are worth keeping around:

2. Sign up when the first year is free

Many cards waive the annual fee for the first year and even include a welcome bonus offer, which have been detailed in many of my previous posts.

Examples include:
These offers are often available throughout the year, so don't worry if you miss the window for one of these cards.

3. Downgrade your credit card to a no-fee card

For certain cards, you might lose all your hard earned points if you cancel the card, thereby paying an annual fee just to keep the points active. However, if you have cards from any of the Canadian banks, you can keep your points active by product switching your premium travel card to the no-fee version of the card.

You can do this by calling in to customer service and asking them to "downgrade" your card right before the annual fee is due. This way, you keep your points without paying the annual fee and it doesn't result in a credit score hit.

This is a great strategy if you signed up for a card to get a welcome bonus, but need more time to decide on what to redeem the points for. In some cases, you might even get the welcome bonus on the new card (your mileage may vary!).

Examples include:

Unfortunately you won't be able to do this with American Express credit cards as they don't allow product switches, and their no-fee cards don't have the same rewards as their premium cards.

4. Get a premium chequing account

If you sign up for a premium chequing account with one of the big banks, you can often get the annual fee waived on their premium credit card(s). What makes the offer even better is that the banks run promotions throughout the year offering $300 to open a new chequing account with them, allowing you to double dip in rewards!

Examples include:

5. Get cash back via Great Canadian Rebates

Great Canadian Rebates has a ton of cash back offers on many Canadian credit cards that are recommended on this blog. While the cash back rebate doesn't always completely cover the annual fee, it oftentimes covers a pretty big portion.

Examples include:

6. Call to cancel and ask for a fee waiver

Sometimes, if you call to cancel the card and ask nicely for a retention offer, you might get a customer representative who is willing to waive the fee for another year (full or partial). They may even throw in a points bonus as a retention offer.

In my experience, they are more willing to let you cancel rather than negotiate with a supervisor, but there's the odd time it works. If you have other products with the credit card company and/or you're a long-time customer, they are more willing to make an exception (e.g. you have bank accounts and a mortgage with BMO or CIBC and you have one of their cards).