I believe this is the reason that the annual fee was refunded. Since 2010 there is a Federal regulation which limits the annual fee to 25% of the initial credit limit. See here: https://www.federalreserve.gov/consu...tk_ccrules.pdf Chase apparently has a software flaw which refunds the annual fee if the cardholder requests a limit reduction to less than four times the fee. I do not recall that this has been reported on Chase's own branded cards, but it has been reported on the discontinued Ritz-Carlton co-branded card. If I recall correctly, the fee waiver only applies to the first year, but experiences may vary.