Retention Bonus Success Story

Reader Liz reached out to me and asked the following question:

                                 "Which credit card should I get after I cancel my Chase United card?

My first question was does she like the card? If so, why are you canceling the card?

Her response was that she loved earning United miles for her daily purchases, but she didn't want to pay the annual fee. Since she like the card, my recommendation was that she call Chase and ask if there was any retention bonus for keeping the card for another year. I told her that there have been reports of people getting the annual fee waived or 5,000 miles as retention bonus.

What is a retention bonus?

A retention bonus is a gift from a company in order to keep you as a customer. Keeping a current client is 90% of the time cheaper than trying to get new clients to join. In the example of Chase, giving a current client 5,000 miles to pay the annual fee is cheaper than shelling out 40,000 miles for a sign-up bonus for a new client.

In the case of Liz, I told her if the retention bonus request was not grant, hold off from canceling the card. The smarter tactic was to apply for a new Chase card (with a large sign-up bonus, I suggest the Chase Sapphire) before canceling the card for three reasons:

                   1) You should always have a mileage earning credit card

                   2) If Chase denies you for the new card, you can call the reconsideration line and
                       bargain to get the new card by closing the old card
                               
                                 - I just did something similar to this to get my Chase Ink Bold. In my case, I
                                   allowed them to lower my credit limit on another Chase card to "transfer"
                                   the high credit limit to the new Ink Bold.

                  3) If you are approved for the new card, you can transfer the credit limit from the card
                      that you want to cancel to the new card. For instance, if Liz's United Card had a
                      $5,000 limit and Chase approved her for the Sapphire card with a $2,000 limit, she
                      could ask, while canceling the United card, to transfer the $5,000 limit to the
                      Sapphire to increase her credit limit to $7,000.

A few days after my email back to her, I received this response:

 "Thanks for the advice regarding my chase united card. I called and they offered me a retention bonus of $150 dollars. Which covers my annual fee and then some. So I decided to stay with it!"

Success! $150 is a pretty big retention bonus, so congrats, Liz!

For myself, I never get a retention bonus. I always ask for one and get told they "don't exist." Recently, I called on my Chase United and the representative told me that they don't offer retention bonuses to anyone. I kindly mentioned that I have been reading online that people were being offer bonus of points, credits or waived annual fees. The Chase representative said, "ugh, you can't believe everything you hear from those travel bloggers."  

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