1. Ask for a retention bonus to offset the annual fee:
http://www.flyertalk.com/forum/ameri...n-bonuses.html
2. Apply for a different card which will maintain your Membership Rewards balance. Two low cost options:
A. Blue from American Express. The card is free, but your points will be temporarily reclassified as Membership Rewards
Express, and
Express points cannot be transferred to any other program. There is also a business version (
Blue for Business) which earns a 30% annual bonus.
B. Mercedes Benz Credit card. Annual fee is $95, it participates in the full version of Membership Rewards.