bocastephen

Just curious if anyone was able to get Chase to waive the annual fee on renewal for the PresPlus MC. They are still sending out offers for the free first year.

I was considering canceling the card and picking up a USAir Club membership the next time they have a fire sale on those, as it represents about 99% of the value and use I actually get from the card.

controller1

My prediction: Never gonna happen.

bmw303

I dont know. If you're spending over 30,000/year, then it might be worth it for chase to waive the fee.

Red_Rob

You need to:

A) Be a profitable customer (i.e. few complaints & high spend with good credit score)

B) Ask

B is most important. It also helps if you try to cancel and are really willing to cancel over the fee (i.e. ask to cancel and hope they try to win you back, could easilly backfire).

tarheelnj

High spend doesn't make a profitable customer, high interest payments with a high credit score do. If you rack up large spending but routinely only pay part of the amount due (more than the minimum payment, though) so that you pay a lot of interest, that makes you profitable. They will definitely go to great lengths to keep you.

If on the other hand you pay your bill in full every month, don't be surprised if they let you go, regardless of your level of spend.

~tc~

X2 - they would in effect be giving you a Presidents Club membership for free.

Red_Rob

Chase would earn more money on someone who spends $10K / month and pays in full than someone who spends $20K / Yr but carries an average balance of $10K. Of course while revenues would be sigificantly higher so would the expense of all those miles (and EQM's) so it may be that those 2 customers are equally profitable while the one who carries the balance is riskier.

tarheelnj

I don't think that's the case, even taking into account the wide spending disparity between your two examples ($10,000/month vs $1666/month). I don't know what Chase pays CO for the miles, PC access, etc but it's probably close to what they earn in merchant fees. (Please correct me if that's incorrect.) Assume both customers pay the same annual fee, so that's a wash.

The difference, then, would be the 13.24% interest they earn on the one with the $10k average balance ($1,324/year), with no incremental offset for expenses (assuming no reserve for losses).

If Chase's merchant fees are much more than what they pay CO, I could be wrong though.

Red_Rob

A merchant pays more when a customer uses a premium card (like the PP MC). If a merchant typically pays 1.5%, then they would pay around 2% on a charge with a PP card. (Actual US average is ~1.8% across all cards). The extra .5% mostly goes to the miles with chase keeping a very small slice.

Of the remaining ~1.5% Chase keeps 85-90%. So for every $1K of spend Chase gets ~$12.75 AFTER paying for miles.

Thats $1,530 compared to the $1,324. In each case Chase is floating ~$10K in credit (one carried as a balance, and the other as a monthly grace period paid in full).

The numbers actually come out a bit better for the high spender. In addition to the direct revenue they also get significant data (to use or sell) on a high spend customer.

tarheelnj

Good last point - that's a big source of revenue for the banks.

I wonder why the banks don't offer fee waivers then for big spenders? Might incent people to focus on one card vs another one.

Joshua

Don't forget that Chase and Continental probably have a deal where Continental pays a lot less than the 2% for Continental tickets bought with that Chase card.

I'm noticing other retail stores opening up their own banks to do this--Target now offers 5% off if you use their debit or credit card issued by "Target National Bank". I can't justify paying 5.3% more on a purchase just to rack up miles. Lowes is doing the same thing too.

Red_Rob

That and you can bet if you ever have a dispute over an airline fee your CC wont be backing you up if its a CO card from Chase.

bmw303

any experience with canceling the chase presidential plus? anyone have luck with a fee reduction / waiver based on spend?

channa

Well there's the hassle factor.

I use a 2% cash back card, so my net savings would be only 3%. If I spend $1,000 a year at Target, I'd save $30 by using that card. Not sure I want to carry another card to save $30 a year.

RNE

Keep drinking, my friend.