- The new year makes for a great time to reassess your credit
card strategy and make sure you’re getting enough value from your
cards to justify any annual fees.
spend more than $4,000 on credit card annual fees, but that
doesn’t mean I waste my money. I travel more than half of the year,
and I only keep cards with benefits that I can fully utilize.
- To evaluate my credit card strategy each year, I look at any
changes to my credit cards’ benefits and annual fees, and make a
plan for using annual statement credits on cards like the
Platinum Card® from American Express.
- Here are the eight items on my credit cards checklist for the
beginning of the year.
Business Insider’s list of the best rewards credit cards
It’s hard to believe that it’s already 2020, but here we are!
Every new year, I review my credit card portfolio and decide
whether it still makes sense to keep each card. I spend more than
half of the year traveling, and I have several rewards credit cards
that charge annual fees. In fact,
I pay more than $4,000 in annual fees for cards that save me
serious money on my travels, but that doesn’t mean I’ll keep a card
if it isn’t pulling its weight.
Here’s the list of things I evaluate to help make decisions
about which cards to keep, which ones no longer make sense, and to
make sure I’m getting as much value out of my credit cards as I
Keep in mind that we’re focusing on the rewards and perks that
make these credit cards great options, not things like interest
rates and late fees, which will far outweigh the value of any
points or miles. It’s important to practice financial discipline
when using credit cards by paying your balances in full each month,
making payments on time, and only spending what you can afford to
Is the annual fee still worth it?
As with everything else in the economy, the trend with credit
cards seems to be slowly raising the price and while making small
additions to the benefits list. But increased annual fees aren’t
always worth it. Did the annual fee for your credit card go up $100
while adding fees for guests at airline lounges? Consider whether
paying that new, higher annual fee is worth the benefits that come
with the card.
Don’t forget that there are many
solid rewards credit cards that don’t charge an annual fee,
Citi® Double Cash Card — earns 2% cash back on all
purchases: 1% back when you buy, and 1% when you pay
Chase Freedom Unlimited — earns 1.5% cash back on
Chase Freedom — earns 5% cash back on up to $1,500
each quarter on
rotating bonus categories (when you activate each quarter)
Did any card benefits change?
Did your bank remove the vast majority of travel protections,
even from the most premium, travel-focused cards? Did a three-hour
limit get slapped on your lounge access (ahem, Amex
Every year, valuable card benefits change. Sometimes these
changes matter given your personal usage pattern, but other times
they may not. Review each card, and consider whether it’s worth
Am I using most of my card’s benefits?
You shouldn’t sign up for a new credit card without a plan to
maximize its benefits. However, in practice, it’s rare to utilize
each and every perk.
Be brutally honest with yourself. Are you really using the
valuable benefits (such as a fourth hotel night free with the
Citi Prestige® Card and
Uber credits or airline fee reimbursements with the
Platinum Card from American Express) that you’re buying with a
hefty annual fee?
If the answer is no and you don’t expect your life to
dramatically change in the next year, you’re probably paying for
benefits you won’t use. Consider whether the card is still a good
deal given that.
Duplicate card benefits
It’s easy to end up with three different credit cards, all of
which include a
Priority Pass Select airport lounge membership as one of the
benefits. When I look at my card portfolio, I always note which
benefits are duplicated. If I’m “on the fence” about a given card,
I’ll be much more likely to dump it if one or more benefits is
duplicated by another card that I carry.
Most of the cards I carry are associated with a loyalty program
— either one run by the bank, such as
Chase Ultimate Rewards, or by an airline, such as United
MileagePlus. Loyalty programs can change throughout the year, and
these changes can make a program more or less valuable.
For example, removing a valuable transfer partner can reduce the
value of a bank’s loyalty program, and switching to a dynamic award
chart without fixed mileage rates can reduce the value of an
airline’s loyalty program. We saw negative changes to both bank and
airline loyalty programs in 2019, as well as positive changes like
the addition of JetBlue as a transfer partner for Capital One
The core value of a co-branded credit card is the benefits in
its associated loyalty program, so be sure that the benefits are
valuable enough to justify the annual fee.
Do I need to hit any spending thresholds to earn benefits?
Some loyalty programs offer valuable benefits when you meet a
spending threshold on a cobranded credit card. For example, in the
Delta SkyMiles program, if you charge $25,000 or more in a year to
Delta credit card like the
Gold Delta SkyMiles® Credit Card from American Express, you
can waive the Medallion Qualification Dollars (MQD) requirement for
Delta elite status, up to the Platinum Medallion level of status.
(For the highest tier, Diamond Medallion, you’d have to spend a
whopping $250,000 on a Delta credit card to waive the MQD
requirement, which is a much lower $15,000).
Don’t forget about airline credit cards that offer
companion ticket benefits, like the Travel Together ticket you
can earn after spending $30,000 in a year on the
British Airways Visa Signature® card. Plus, some hotel cards
Hilton Honors American Express Surpass® Card offer a free
weekend night certificate for meeting an annual spending
requirement — in this case, $15,000 in a year.
Presuming that the loyalty program is valuable enough for you to
put spend on a cobranded card, are the thresholds still achievable
given your planned spending patterns this year?
More importantly, is the benefit you’re getting from putting
spending on a cobranded card worth the flexibility you’re giving up
by putting spending on a card with
transferable points? For example, will the free weekend night
you get with the Hilton Surpass card be worth putting at least
$15,000 of spending on the card this year, especially when you
could be earning more valuable transferable points with a card like
Are there any cards I should downgrade?
If I decide that I no longer want a certain card, before closing
it I consider the potential impact to my credit
score. If you close an account, it shortens the average length
of time you’ve had an account, and it also changes your available
credit (if you have outstanding balances, your ratio of balance to
available credit can negatively change).
Some card issuers will allow you to downgrade an existing card
to one with a lower (or no) annual fee. If it’s an option, I do
this rather than close a card entirely. That said, I never hesitate
to close a card if it doesn’t make sense for me to carry it
anymore. We’re not talking major changes to your credit report —
they’re minor, and for the most part, temporary.
Assess annual credits
Many cards, especially premium cards, offer some type of annual
Amex Platinum card, for example, offers
up to $200 in airline fee credits and
up to $200 in Uber credits each year, as well as
up to $100 in Saks credits.
At the beginning of each year, it’s always a good idea to go
through all of your credit cards and create a checklist of the
annual benefits offered by your cards so you don’t accidentally
forget to use them.
- More credit
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Source: FS – All-Travel destinations-News
I use this 8-item checklist at the beginning of each year to make sure I'm getting full value from my travel credit cards