The $75 annual fee recently posted on our Bank of America Alaska Business card (not a referral link).
Each time an annual fee posts on one of our cards, we go through a full analysis of whether to keep the card, cancel it, or product change. In addition, we also make a call to the card issuer to see if there are any retention offers available, unless there’s a good reason not to make that call. We always like to share on Middle Age Miles our thinking and strategy with respect to these “Keep or Cancel?” decisions and our data points on retention calls.
We decided to cancel our Bank of America Alaska Business card, and it was a very easy choice.
Details and Analysis
We were approved for the B of A Alaska Business card in January 2018, and this was its first anniversary. The only spend we put on the card beyond meeting the minimum spend requirement for our sign-up bonus was to purchase 3 one-way Alaska flights. This was at a time when we didn’t hold an Amex personal Platinum card for a few months, and the Citi Prestige card hadn’t increased its airfare bonus category to 5x. So, at the time, this card was best-in-class for Alaska airfare. That has now changed, and we’d now use an Amex personal Platinum or Citi Prestige card.
The earning structure on the card is 3x for purchases from Alaska Airlines and 1x on everything else. Our baseline value for Alaska miles is 1.5 cents per mile (some bloggers value them more highly), and the 4.5% / 1.5% earning structure is not best-in-class for us in any category. In addition, as a business card, the B of A Alaska Business card isn’t even eligible for discounts through BankAmeriDeals.
The one recurring benefit of the card is that you receive a $99 Alaska Companion Fare (turns out to cost $121 for the companion, all-in) each year. Our “first anniversary” $99 Companion Fare already posted to our account in mid-January, so we’ll get to keep that one. Paying this year’s annual fee would (presumably) get us another $99 Companion Fare in January 2020. However, that’s a long way off, and frankly, as AA captives in DFW our family has only limited opportunities to take advantage of Companion Fares on Alaska.
Thus, we didn’t have sufficient reasons to keep the card and pay the annual fee.
In addition, it appears that the B of A Alaska Business card is still churnable, despite limitations put into effect by B of A earlier this year on personal cards (see this article from Frequent Miler). As of today, the public sign-up bonus is 40,000 Alaska miles plus a $99 Companion Fare, with $2,000 spend in 90 days. We believe this matches the all-time high for the card.
Given that, closing and re-applying is potentially far more lucrative than paying the annual fee (setting aside whether we might be able to hold 2 cards at once), and this gives us a good opportunity to try to pick up some more Alaska miles by re-applying for the card soon.
Our Call to Close the Card
On this call, we absolutely wanted to close the card, even if the annual fee was completely waived. I called in to the B of A small business customer service number on the back of our card. I had to wait on hold for about 15 minutes.
When the agent finally got on the line, I told her that we wanted to close the account. She asked why, and I responded that we’re not using the card and didn’t want to pay the annual fee. I was also making sure that the annual fee that had posted would be credited back so that we wouldn’t owe anything.
After some clicking of keys on the other end, the agent told me that she had waived the fee. It wasn’t clear to me whether she just meant that she had credited the fee back to our account, or whether she had waived the fee in an effort to retain us to keep the account open. I reiterated that we wanted to close the account, and she did so right away. After a short disclosure statement, the call was finished after probably 3-4 minutes on the line with the agent.
As these decisions go, this was an easy one. We’ll be keeping our fingers crossed that we can be approved for a new B of A Alaska Business card soon! We’ll provide that data point in an article on Middle Age Miles if and when we apply.
Did we make the right decision to close our card? Is there anything we missed in our analysis? Please let us know in the Comments!
At Middle Age Miles, we love to bring you travel, credit card and points-and-miles information that you can use to help make your travel dreams come true. To see all of our tips and insights, please Like and follow us on social media at:
Please share and re-tweet our posts and tell all of your friends about Middle Age Miles! Thank you!