Teddy was approved for the Chase Ritz Carlton card back in January. I had him apply so we could collect 140,000 points to use for 3 nights at the Marriott Renaissance Paris Vendome Hotel in Paris later this month. The annual fee is $395, but you do get $300 a year in airline credit (we bought 2x $150 Delta gift cards and were reimbursed!) The sign-up bonus ended up being worth over $1,200 to us, so the annual fee was well worth it. Now it looks like I found a way to sweeten the deal even more by discovering how to get the $395 Ritz Carlton annual fee refunded!
I’m not a lawyer, so I am in no way giving legal advice! According to the law, the annual fee should not be in excess of 25% of the total amount of credit authorized under the account when the account is opened. It does looks like this only applies for the first year.
Here is the full text:
If the terms of a credit card account under an open end consumer credit plan require the payment of any fees (other than any late fee, over-the-limit fee, or fee for a payment returned for insufficient funds) by the consumer in the first year during which the account is opened in an aggregate amount in excess of 25 percent of the total amount of credit authorized under the account when the account is opened, no payment of any fees (other than any late fee, over-the-limit fee, or fee for a payment returned for insufficient funds) may be made from the credit made available under the terms of the account.
So what does this mean?
I experimented with Chase by lowering our Ritz Carlton’s credit limit to just $1,000. Chase actually makes it quite easy to transfer credit from one card to another. I basically moved 90% of our available Ritz Carlton credit over to our Chase Sapphire Preferred card.
I then waited a few days and continued to login to our Chase.com account to see if the $395 annual fee would be refunded since it’s now in excess of 25% of our available credit.
After about 3-4 days of waiting….. the $395 annual fee was refunded to me!
Is this is a mistake?
I think Chase is just being overly cautious to make sure they’re not breaking the law. The only mistake I see is Chase actually letting me lower the Ritz Carlton’s credit all the way down to $1,000. I know credit card companies will sometimes require a minimum of $5,000 for opening an account, but I’m not sure if they can stop you from lowering your credit below $5,000 after the account is open.
If credit card companies can enforce a minimum credit limit after the account is open, then Chase will probably update their system to not allow customers to lower their credit below x dollar amount. I imagine if a lot of people read this post and start doing it, then Chase will probably fix this.
If Chase still had the 140,000 points offer going on, I would recommend jumping on it immediately! This was the icing on top of the cake and made the sign-up bonus very lucrative.
Our net gain on the Ritz Carlton sign-up bonus:
|Sign-up bonus:||140,000 points. Redeemed for 3 nights in Paris. Worth $1,200.|
|Annual airline credit:||$150 x 2 Delta gift cards = $300|
|Value of sign-up bonus:||$1,500!|
Should you do this?
That’s up to you. Some people might think this is unethical. However, if you truly don’t want a high credit limit on your Ritz Carlton card, then by all means make the adjustment. We use our Chase Sapphire Preferred card religiously. However, our credit limit was just over $7,000. That’s pretty small compared to what our Ritz Cartlon’s credit limit was. Therefore, we legitimately moved our credit over. We just got a nice surprise along with the adjustment in our credit needs with Chase 🙂