💳 What to Do When the Annual Fee Hits — Two Options

Sometimes, after the first year, people decide the benefits of a credit card no longer justify the annual fee. That’s totally understandable — and you’ve got a couple of solid options.

Option 1: Cancel the Card

You can call and close the card completely. In some cases, the bank may offer you a retention bonus to keep it open (worth asking!).

But keep in mind: closing a personal credit card can cause a small dip in your credit score. If your credit is already well-established and in the good to excellent range, it’s usually not a big deal. Personally, I try not to close more than two personal cards per year, and I never cancel a card before I’ve had it for at least a year — doing so can damage your relationship with the bank and hurt your chances with future applications.

Option 2: Downgrade to a No-Annual-Fee Card

Instead of canceling, you can ask to downgrade to a no-fee version of the same card. This keeps your credit line open (which helps your credit score) and maintains your history with the bank.

Each card has different downgrade paths, so I won’t go too deep here — but it’s as simple as calling customer service or sending a secure message through your bank’s app. They’ll walk you through your options.

And if you’re ever unsure or need help navigating this, feel free to reach out!