Why I Am Paying An Annual Fee & Then Closing The Card A Few Months Later

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Paying An Annual Fee

Why I Am Paying An Annual Fee & Closing The Card A Few Months Later

I had another aha moment the other day.  Similar to the one I had with credit cards that have travel eraser credits and how we should treat them.  The annual fee on my wife’s World of Hyatt card just posted. She is currently at 4/24 and it has been over 24 months since she last got a welcome offer on the card. The normal play is to cancel her card and sign up for a new one.  Then I could snag a juicy 50,000 World of Hyatt points from the new welcome offer.  But I am taking a different approach this time around.  I am paying the annual fee & then closing the card a few months later. There a few different reasons I decided to go against the grain and go this route instead.

Paying An Annual Fee

My Thinking

It used to be possible to get a card’s yearly bonus points or “free” night certificate and then downgrade or close it.  Essentially getting one last bonus before closing the card and avoiding the annual fee.  Chase caught onto this and has since delayed the posting of these for some.  And that plays a role in my decision.

“Free” Night Certificate

I value the anniversary night award at greater than the $95 it costs to acquire.  And with Hyatt extending ones I had earned last year until December of 2021 I am gathering quite the collection.  The cert is worth around $200 to me so I will gladly take half off a future stay that I can pair up with my other awards. I will just use some of my cash earned from my wife’s new Chase Sapphire Reserve to cover the additional cost.

Paying An Annual Fee

$15K Free Night

This is where it gets kind of interesting though.  If I play this right I think it would be possible to double dip the $15K free night this year. Since my wife’s annual fee just posted she is now eligible to earn another free night after spending $15K.  If I can do it fairly quickly, I could wait for the free night to post and then close the card.  Then she would her sign up for a new World of Hyatt card.  That would net her the 50,000 point welcome offer and she should be eligible for an additional $15K free night because it would be a new account.

Final Thoughts

At the end of all of this I will have paid $190 in annual fees, put $30,000 on her two World of Hyatt cards. She would net 3 category 1-4 award certificates and at least 80,000 points.  That is a pretty solid return on our spend if the $15K free night double dip works as planned.

Even if I wasn’t able to chase the two $15K free nights I think I would still pay the $95 for the anniversary category 1-4 certificate. Then I would have her close the card and sign up for a new one.  With the Ultimate Rewards cash option available right now out I don’t mind spending money like this. I will take half off travel whenever I can get it easily. That is a big reason why I love the Chase pay yourself back feature.  It allows me to use my points for different types of plays without hitting me in the checkbook.

Mark Ostermann
Mark Ostermann is a father, husband and miles/points fanatic. He left the corporate world after starting a family in order to be a stay at home dad. Mark is constantly looking at ways to save money and stay within budget while also taking awesome vacations with his family. When he isn't caring for his family or taking a weekend trip, Mark is working towards his goal of visiting every Major League Baseball ballpark.

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  1. I see where you’re coming from but wonder if that’s for sure better than spending on your Surpass card(s). The increased points for grocery spend is more open ended and lasts longer with Amex. And the Hilton free night cert seems #1 right now because 2020 Hilton certs have no category restrictions, no day of the week restrictions, and (I believe) are good for two years from issue. If you have free night certs from the Grand Wailea cancellation (like we do) you could tack on to a new trip because no day of the week restrictions. And if you’re cashing out Chase points you gotta be pretty well set for Hyatt points already.

    • The 12X on the Surpass ends this month though so I plan to hit that then move onto the Hyatt card. I am also actually more set on Hilton points than I am with Hyatt points too. But I plan to get the 15K free night from Surpass and hit this as well.

      • 12X on Surpass good until end of July, right? I think we have an extra month of elevated grocery points on Amex vs Chase. And then for those with the Aspire, we have until the end of August to use the resort credit at restaurants.

        • Correct, end of July. Was thinking Chase and June. With Amex delaying payouts on the Hilton cards for large amounts I will be splitting my spend between the two cards anyway. Better to stay under the radar imo.

    • I plan on taking a few months to hit the first $15K in spend and then I will have 12 months for the 2nd round so it isn’t all in a short period. But I do a lot of reselling and Plastiq payments etc. so I am able to do a decent amount of spend on a monthly basis.

  2. I’m kind of curious about why you want to spend $15K on the Chase Hyatt card in order to earn a free night cert. If you spend $15K on a 2% cash back credit card (e.g., Citi Double Cash or Cap One Spark), you would generate $300 in cash back. That’s the opportunity cost. What am I missing? Thx for your insights.

    • Good point, if you have one of those cards. One of the major reasons I value points and free nights is you don’t have to pay hotel taxes, which can be significant. No one ever seems to mention that.

    • You’d get the free night and at least 15000 Hyatt points in the process of the spend. It’s up to each individual to decide whether they value that more or less than putting that spend elsewhere. If you value the free night at $200 and Hyatt points at 1.5 cents each, you’d come out with much more than $300 value.

    • The value of the points themselves. I value 15,000 Hyatt points at $225 (1.5cpp). Add the certificate worth say, $175, and you’re $400 ahead instead of $300. Likely, you’re even farther ahead, as those numbers are somewhat conservative.

    • As others have said you are forgetting about the points you earn with the card as well as the free night. Then when you add in the elite night credits it comes out to more valuable to me than anything I could get with a cashback card (over 3% with my valuations of 1.7 points per Hyatt point and $200 for the cert). I will probably get closer to $250-$300 for the cert actually but I like to base things on minimum expected redemption.


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