Without a doubt, one of the most annoying fees that credit cardholders have to pay is the annual fee. Majority of cardholders are familiar with this fee and majority of us likely pay this grudgingly year after year after year.
In the case of my credit card with BPI (Bank of the Philippine Islands), I’m charged P2,050.00 per year. For my Citibank credit card, it’s P2,500.00 per year. That’s a lot of cash I could have spent on other things!
Why are we charged an annual fee in the first place? Simply put, it is billed to us just because “we’re using the credit card”. Think of it as sort of a “membership fee” that we have to pay to be able to use the card.
Sucks, right? Fortunately there are ways to end this annual burden. I identify below three (3) valid ways to waive or totally eliminate this annual membership fee.
I can guarantee that I’ve tried all methods below and they work! I never got to pay any annual fee with my BPI credit card since I first got it back in 2007! That’s more than P30,000 worth of annual fees that I never had to pay.
It’s a hit-and-miss, though, for Citibank and BDO, because sometimes they waive my annual fees but other times, they don’t. In 2020, I tried Method #1 below and called Citibank but they told me that they won’t waive the annual fee but, interestingly, gave me a guarantee that my Shell Citi credit card fee in 2021 will be automatically waived. They did!
But in 2022, Citi again charged me the annual fee. I tried Method #1 again but they did not budge so I resorted to Method #2 and, alas, it worked! More details of this story below.
So how to convince credit card companies to waive the annual fee? Try any of these three (3) tried-and-tested ways:
Call the bank and ask to have the annual fee waived.
Tell them you’re planning to cancel your credit card.
Choose a credit card that offers “No Annual Fee”.
It may not work for you every time but if it would, congratulations and welcome to the “My credit card’s annual fee got waived” club!
Method #1: Call the bank and ask to have the annual fee waived.
“Not a lot of credit cardholders know this, but you can simply call the bank or credit card company and request to have your annual membership fee waived.”
Not a lot of credit cardholders know this, but you can simply call the bank or credit card company and request to have your annual membership fee waived.
In fact, this is the method I’ve used every single year since I got my first BPI credit card back in 2007, and it has worked for me every year without fail — saving me more than P30,000 worth of annual fees through the years!
How to ask BPI to waive your credit card fee?
The fee actually still appears in my monthly statement, but what I do the moment I see it in the billing is call BPI’s hotline to request for it to be waived. In recent years, though, instead of calling the BPI customer service hotline number — because sometimes it takes them a long time to answer — I just approach the branch manager or relationship manager in my branch of account. I ask the manager to request, on my behalf, BPI’s credit cards division to have the fee waived. They’re usually OK with this especially if you’ve been a long-time client of the bank.
This system has not failed me every single year which is why I’m happy to be a BPI credit cardholder since 2007 because I’ve not paid a cent of the annual fee.
Technically, I still pay it but what happens is that the annual fee I paid is reimbursed by the next billing cycle and shown as a “Reversal” or “Advance Payment” that is credited to my account. (Alternatively, you can also choose to not pay the fee and wait for it to be reversed, assuming you got an official confirmation that BPI will indeed waive the fee.)
The photo below is an example of my BPI credit card statement showing the annual fee of P2,050 that was charged in July 16 which was waived and credited back to my account in August 6.
In 2020, BPI surprised me by instantly waiving my credit card annual fee without me having to file a request. Due to the COVID-19 pandemic, I could not visit my branch of account, but I was delightfully surprised that I didn’t have to call BPI just to have the fee waived.
Here’s the text message from BPI informing me that my annual fee has been automatically waived in 2020. Thank you, BPI!
Tip: if you’re a Preferred Banking client of BPI, you may call their Preferred Banking hotline at (+632) 7791-0077 so you won’t have to wait several minutes to talk to a customer service (CS) agent. Takes me less than 30 seconds to speak to an agent who can help me with this annual fee waiver request every time!
“Tip: if you’re a Preferred Banking client of BPI, you may call their Preferred Banking hotline at (+632) 7791-0077 so you won’t have to wait several minutes to talk to a customer service (CS) agent.“
Actually, the decision whether your waiver request will be granted depends on your credit history and usage of the card. If you’re a cardholder in good standing, BPI typically grants this request. They usually check first your monthly card usage and payments history, and if you have been assessed as a customer in good standing, they usually decide to waive the fee.
One time, I called the BPI hotline to request the waiver of my annual fee and the CS representative checked how much my credit card spending was in the previous three months. I assume if I wasn’t actively using the card then I won’t be given the waiver request. After checking my card usage, the CS representative told me that I’m qualified to have the fee waived, but on the condition that I use my card with minimum spending of P20,000 within the next three months.
I asked if that amount was the required spending every month for 3 months, but I was told it’s just cumulative amount for 3 months total. Since I’ve been spending more than that anyway, I agreed and the CS representative told me to check the next billing statement and I should see a refund of the annual fee that I paid.
Annual credit card fee waived! Success!
It helps to be polite and courteous when negotiating, of course, so don’t get hot-tempered and never curse the CS agent on the other end of the line!
Not everyone, though, is qualified to receive the annual fee waiver. I’ve heard that banks typically assess the cardholder’s spending or credit rating or even payment defaults history. If you’ve been remiss several times in your monthly payments or have cumulative finance charges that remain unpaid over the years, there might be a big chance that your request to waive the fee will be declined.
How to request to have the Citibank credit card fee waived?
In 2020, I called Citibank’s hotline to request to have the annual fee of my Shell Citi card waived. The customer support agent told me that unfortunately, Citibank is not waiving the fee. This supposedly applies to all Shell Citi credit cardholders that year. Well, that sucks.
The silver lining is that the CS agent told me that I’m eligible to receive the annual fee waiver in 2021. He even gave me a reference number as proof that this transaction is a go for 2021. I did receive the annual fee waiver that year, but got charged again in 2022. This time, I used Method #2 below to have my annual fee waived.
(Tip! If you want a credit card that waives the annual fee, apply for a Citi Rewards credit card below. Just click the image and apply online.)
Method #2: Tell the bank you’re planning to cancel your credit card.
If method number 1 didn’t work, sometimes threatening the bank that you’re canceling the card and switching to a competitor could lead them to giving in and to grant the annual fee waiver. They want to make money from you, of course, and sometimes they yield in an attempt to keep you as customer.
In 2022, as soon as I saw the annual fee in my billing statement, I called Citibank* but was told the waiver request can and must only be filed via their website. I submitted the waiver request form, but received a message days later that my request was denied. Time to use Method #2!
I called Citibank again and asked to talk to someone who can assist me in cancelling my card. I was asked why I want to cancel the card and I told the customer service agent that I don’t want to pay the annual fee. Since I own credit cards from other banks that do not charge these fees, no need for me to keep my Citi credit card, I said. He filed a report and told me that my cancellation request will be elevated to another group and I should expect a call from them the next day.
Guess what, instead of a call about my credit card cancellation, I received this SMS message instead granting me the annual fee waiver! Hooray!
The SMS message from Citibank goes: “We received your request to close your Citi credit card ending in xxxx. As we value your relationship with us, we have reversed your annual fee…”
It thus helps to explain that the annual fee is a big reason why you’re thinking of making the switch. You can say that you’re contemplating on using another credit card because the issuing company is offering to waive the annual fee.
“One trick to convince the bank to waive your annual fee is to tell them you’re planning to cancel your credit card. Explain clearly your reasons for canceling it but ask for retention offers, if any, that you can consider before you go through with the cancellation.”
Try telling them:
“I’d like to keep using your credit card, but the annual fee is one reason why I’m no longer inclined on using it. It has benefits and rewards similar to credit card XXX but they’re offering to waive the first year’s annual fee, so I’m thinking of canceling this card in order to avail of that card.
Do you have retention offers that I can consider before I go about canceling this card?”
Research shows that it costs businesses more money to acquire a new customer than to retain current ones, so they’d likely not let you go that easily, especially if they see that it’s profitable to keep you as customer.
Sometimes, they will volunteer to waive the card’s fee to incentivize you to remain with them. Sometimes it works, sometimes it doesn’t because like in Method #1 above, they’d usually check if you have good credit standing and if they can indeed make money from you.
Again, good negotiation skill is key. If there’s a sizable credit card purchase you’re planning in the next few months, you can also use that as leverage. You could say:
“I will be booking flight tickets to Japan for my family next month and I’m planning to use this credit card to pay for this purchase. If I spend P50,000 using this card in the next 3 months, is it possible for you to waive the annual fee?”
Of course, don’t lie about possible purchases that won’t happen and don’t set conditions that you won’t be able to meet! It’s important to communicate clearly that you’re indeed planning on canceling the card and not just bluffing.
Be clear about the reasons why you’re no longer interested on using the card. Don’t just cite the annual fee.
You could say some terms and conditions changed (like the conversion rate for points or rewards became higher) or you’re not satisfied with customer service because it took you several minutes to talk to a Customer Support agent when you discovered a fraudulent transaction on your card.
Provide useful, solid feedback so that they’ll know that they’re actually losing a customer. At times, they will respond with retention offers, including waiving the annual fee, to convince you to reconsider your decision.
Again, use this method only if you’re ready to actually go through the cancellation. Otherwise, the credit card company could call your bluff and they might ask you to pay and settle all unpaid balance to close your account!
Method #3: Choose a credit card that offers “No Annual Fee.”
These days, several credit card issuers offer cards with the benefit of waived annual fee, especially during the first year. Take advantage of these offers.
Of course, we know that this is simply a bait to acquire new customers and even if they won’t earn from the annual fee, they still can make lots of money through credit card finance charges, annual percentage rates or APR, penalty fees, etc. But if you’re looking to get a credit card, opting for one with waived fees on the first year could certainly save you some cash.
Better yet, choose cards that offer no lifetime annual fees. Yup, no annual fees forever!
These extraordinary cards are typically used by banks to lure you to switch with the hopes of locking you in for life. Again, there are still other fees that you’ll need to pay as a consequence of using the card, but with these types of cards, the annual fee won’t be a problem anymore.
Credit Cards in the Philippines with No Annual Fee
Here’s a list of credit cards in the Philippines that offer waived lifetime annual fees or no annual fees forever.
(Promo! Citibank’s Rewards credit card does not charge any annual fee forever. Click here to apply for a Citi Rewards credit card.)
Stories of How to Ask Banks to Waive the Annual Fee
After we’ve written this article, we received a lot of comments from PinoyMoneyTalk readers who shared their stories on how they also got to have their credit card annual fees waived. We’re reproducing them below so you can learn from their experience!
“I always pay the total balance on time so I never have finance charges and late fees; I have a good credit standing. I usually just tell the agent to cancel my card if they won’t waive the annual fee and they gladly waive them with no conditions.” – Joanne M.
I have a BDO Credit Card and every time I request for waiving [the annual fee], it was always granted. Of course, need a good history of payments. But in Metrobank, they always have requirements to purchase or a condition to waive your annual fee. – Ian
Citibank does not waive any annual fees anymore. I’ve tried. They don’t do it. I spent a whole 30 minutes to 1 hour on the phone trying to convince them. You have to have 20,000 points. Php 30 for 1 point. For annual fee to be waived, you need to have Php 600,000 spent. – RC_KUNOICHI
Seems like Citibank does not waive annual fees this year. Called them up, failed to have mine waived. – Vito A.
I just had requested to waive my annual fee sa Metrobank and they gave me 3 options: 1. Spend a particular amount; 2. Go paperless; or 3. Enroll a utility bill. I chose option 2. -BJC
I have a good credit standing with Metrobank for 5 years. I pay my bills on time and always in full. But Metrobank never waived my annual fee. – Alex
I work in BPO for credit cards and if you always pay your bill in full, you won’t get good credit standing because they don’t get to milk you through interest charges. Remember, that’s how bank earns from credit cards. They don’t get to earn from you, instead your account becomes a liability because they also spend something for their services to you. To get a good credit standing, always use your card but do not pay it in full always and make sure to keep your account current. (They also get money from you through late fees, so getting late 1x in every 8 bills perhaps will not hurt your credit.) – Mari Ela
I tried calling BPI before and the BPI agent said that I need to spend Php 9,000 in a month for them to waive the annual fee, else I’ll be charged. So I let my co-workers use and swipe my card. My 1st year’s annual fee was waived. Will do this again on my second year. – John David G.
Now you know some ways to eliminate your annual credit card fee burden. Try the steps above because if they work, you’ll surely be able to save a good amount of money every year! We hope to welcome you to the “Waived Annual Fees Club” soon!
*Update: Citibank credit cards are now under UnionBank of the Philippines (UBP), with the name, logo, trademarks, etc. used under license from Citi Group Inc.
About the Author
James Ryan Jonas teaches business strategy, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.1 Billion ($56 Million) worth of retirement funds on behalf of thousands of UP employees.