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What is a retention bonus?

A bonus that a credit card issuer may offer you to prevent you from canceling a credit card.

The credit card industry is a very competitive one and the cost of acquiring a new customer is very high, so retaining existing customers is a top priority for card issuers. Once they have you you as a customer, card issuers will do whatever they can to keep you around—and that includes making sure you don’t cancel your credit cards with them.

Before canceling a credit card, you should always consider calling the card’s issuer and asking what they can offer you to dissuade you from canceling your account.

Different issuers may offer different incentives, and some may not offer any at all, but the best retention bonuses can be very worthwhile—often coming in the form of a fully or partially waived annual fee (which was likely the reason you wanted to cancel the card in the first place) or an additional point bonus.

So next time you’re thinking of canceling, give the card’s cancellation department a call, be friendly and polite, and see if what they offer you is worth keeping the card. Besides, it doesn’t cost you to ask, right?