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Yesterday I called Barclaycard to see if they would offer me a retention bonus for keeping my Arrival Plus card another year. The card’s $89 annual fee recently came due and I was hoping that they would offer to waive that fee (see “Cancelling my favorite cards”). The account specialist I spoke with said that there were no offers available at the current time. This made me think that there was a chance that offers would be loaded into the system later. She didn’t think that a flat out retention offer was likely to come up, but she did mention that there are often offers of either 1,000 points or 10,000 points for downgrading to the no-fee Arrival card rather than cancelling. At the moment, only the 1,000 point offer was available. Since 10,000 points are worth about $110 in travel expenses, I decided it would be worth calling again in the future.
I confirmed with the account specialist that I had until the end of March to cancel and get my annual fee back (60 days from the date that the annual fee posted). And, I asked her what would happen if I first paid the annual fee with points and then cancelled or downgraded. She checked with her manager and then told me that the annual fee would be reimbursed to my account. In other words, this is a one-time option for converting points to cash at their full travel redemption value. I may need to explain that last sentence… When redeemed for travel expenses, or the card’s annual fee, points are worth 1 cent each and you get a 10% point rebate. That makes points worth about 1.1 cents each. When redeemed for cash back instead of travel, points are worth only half a cent each. So, if you prefer cash back, but still want 1.1 cent in value, you have to resort to goofy approaches like this one: pay for the annual fee with points before downgrading the card.
To cover the card’s annual fee, I applied 8900 points to the statement charge. Then, as expected, I immediately received the 10% rebate: 890 points. In total, it cost 8,010 points to cover the annual fee. This had me rethinking a bit whether I should really cancel this card. Since the card earns 2 points per dollar for all spend, I could earn enough points to cover the annual fee each year with just $4,005 in spend. That wouldn’t be too difficult, but it would mean lost opportunity of spend on other cards. If I were to spend the same amount on a no-fee 2% cash back card, I’d earn $80.10. Or, if I used the same spend to meet minimum spend requirements for a new credit card with a sizable bonus, I would earn substantially more.
Because I’m fond of the Arrival Plus card, I tried to think of other ways to justify paying the annual fee. What if I redeemed enough points each year such that I could use the accumulated 10% rebates to cover the annual fee? That way, the card would be equal to or better than a no-fee 2% cash back card. In order to earn 8,010 points via 10% rebates each year, one would have to redeem 80,100 points per year. To earn that many points, one would have to spend $40,050 per year. That’s the break-even point when comparing a no fee 2% cash back card to the Arrival Plus card. And, it assumes that you have enough travel expenses to get full value, including the 10% rebate, from your Arrival points.
For me, $40,050 is too much spend to commit to just to make the card break even with a 2% cash back card. So, rather than try any harder to convince myself to keep the card, I put a reminder on my calendar to downgrade the card in late March. If I’m lucky, maybe I’ll be offered 10,000 points for downgrading rather than cancelling. Regardless, by downgrading to the no fee Arrival card, I’ll keep my remaining points alive and I’ll still be able to redeem for travel at 1.1 cents per point. And, while the no fee Arrival card doesn’t offer 2X for all spend, it does offer 2X for travel and dining. My strategy will be to use it solely for travel expenses so that I can always get full value from points earned. And, at some point in the future, I’ll try my luck at applying for the Arrival Plus 40,000 point offer once again.
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I got the Arrival+ waiver this morning. At first, I thought if I cannon get the annual fee waiver, the last resort was to transfer to a no-fee Arrival since I still have both my wife’s arrival plus and 2.625% BOA travel.
The annual Fee for my Arrival plus was posted 24 days prior. At first the representative said they didn’t currently have offers. After asking for speaking to a manager, I mentioned that I spent 90K+ last year and she gave me the waiver immediately. The whole phone call is less than 8 minutes. However, she mentioned I need to call again next year.
I need to work on my wife Arrival+ waiver in 3 weeks again. Still, the last resort is to transfer my wife’s Arrival plus to a no-fee Arrival since now I have both my own arrival plus and 2.625% BOA travel on hand.for another year.
I was in the same spot, two months ago, but insisted on speaking to a manager. After a short conversation, and after declining to apply points to cover the fee, the manager agreed to waive the $89 annual fee for the next year. Technically, I was charged the annual fee and then a reversal transaction was applied.
You can use the arrival points to pay the annual fee at full value so it really only cost $32-$53 depending on how you MS the Arrival points.
If anyone wants to downgrade to no-fee arrival just for keeping points, I have a better way which worked for me last month before cancelling my Arrival+ card: book a refundable southwest ticket or a refundable hotel room from orbitz, then redeem points and a week later cancel flight or hotel. In this way all remaining points will be converted to cash.
[…] How to convert 8900 Arrival Plus points to cash, and my latest retention call results by Frequent Miler. Obviously doing this would remove the possibility of getting the annual fee waived, so only do this if you’re planning on cancelling the card no matter what or you’re hoping to get a straight point offer (which are less common in my experience). […]
I was going to cancel this yesterday and sign up for the new Discover card that pays 3%. Then I tried to apply online for for Discover, and it didn’t work. Decided to stick with Arrival+ because at least that web site works.
I also used points to pay for the annual fee. I know it equals about a month of my spend, but I really like the Arrival card. I’ve had good luck with dealing with customer service, and everything seems to work efficiently. Plus it is nice to have those points on hand–it’s like our travel savings account.
For now, I justify the Arrival + annual fee by earning enough in the Rewards Boost mall to cover it- yes, I know that it doesn’t make the card “free,” because I could be earning on other portals instead, but it’s close enough for me for now.
Hello, brilliant suggestion and an exciting post,
it will be fascinating if this is still the
case in a few months time
Thanks
I got mine waived after a call transferred to a manager. I did put about 80k on it last year.
How much would you think that the total spend on the card plays into annual fee waiver. Would you mind telling us how much spend you would have put on the card?
I don’t know, I’d guess I put around $15K on the card in the past 12 months.
I put about 70k on mine last year. Didn’t seem to help much. Maybe I should ask for a manager next time as someone reported below.
I’ve gotten the Arrival Card with 40k twice for each of my family members. 5 of us total so we have gotten the sign up bonus 10 times. I put a lot of MS spend on them throughout the year. Most recently, I canceled my sister first Arrival card October 2014 and she was approved for it this month.
That’s great. Thanks for that info!
Come back to this comment section to let us know, if you would, when your sister gets her bonus for this second card. Her first one wasn’t closed very long ago, so this would be a good data point to see if she gets a bonus that quickly on a second card.
I am currently going through the same struggle. My annual fee is coming up and I really like the card but I am probably going to cancel because I just can’t justify the fee but I have a question.
Currently, my largest credit limit with Barclay is on my Arrival. In fact, it makes up about 14% of my total available credit across 12 personal cards. Do you recommend:
1) just cancelling the card and not worrying about my available credit (I don’t won’t it to hurt my credit score by closing the account)
2) Downgrade to the fee-free Arrival to keep my credit line (how does this affect the ability to apply for the Arrival+ in the future?)
3) Close the account and transfer the credit line to the US Airways card (which I have also been thinking about closing).
Any suggestions?
If you think it is likely that you’ll apply for more Barclays cards, then I’d recommend option 1 since that can increase your chance of being auto-approved for the next application (by reducing the amount of credit you have outstanding with Barclays). I don’t know if having the Arrival card will negatively affect your ability to get the Arrival Plus again. That’s a good question that needs to be answered…
Thanks! That is the option I was leaning towards too.
The calculation changes quite a bit if you factor in the usual cost for TripIt Pro. If that’s something you want, the effective anual fee is much less.
True, but it depends upon how much you’d be willing to pay for TripitPro. I think I value it at around $10 per year
Why not cancel and reapply at a later date ?
Probably to avoid losing accumulated points?
Sure, I can understand if you have several hundred dollars in points, but most travelers have something in the coming year they can go ahead and prepay.
I know it all depends on each person and their situation, but, personally, I don’t feel the need to pay the $89 fee is there for me and many others in this hobby.
As Gaurav said, it is to preserve points earned. I might still re-apply at a later date even with the no-fee card open.
I decided to pay the fees and keep the card for a second year because I didn’t have any other 2% card open at the moment. Besides that, I really like the Arr+ because I think it is the only chip+pin card on the US market, it’s linked to three Serve accounts that I control (via dependent cards) which I would prefer not to mess with since they can be touchy with getting new cards attached and allows plenty of MS with Serve and AX GC without cash advance fees that are likely to be triggered on the Citi 2% card. While it may not be worth it for many people, it might not be a bad choice for some people.