Should you keep that credit card or not?

As many of you who read this blog know my wife and I have over 25 credit cards to our names. In some, she is the primary user and in some I am. We have accumulated all these cards because of their sign-up bonuses and various benefits like free checked baggage, access to lounges, elite status, etc. But, every little while it is a good idea to think about if you should keep a card in your wallet (or folio, in our case) or cut it free. In fact, The Points Guy has great posts on checking your credit card inventory once in a while.

The biggest question for me in keeping or cancelling a care is if I am getting a benefit that outweighs the annual fee every year. The easiest examples of “keepers” to me are cards for airlines I or my wife use frequently. For example, we have a United Mileage Plus Explorer card and an AAdvantage Aviator Red Card, each with a $95 annual fee, but we keep them year after year because we get benefits of free checked bags (a $25 benefit each flight per bag) and boarding status (we get to come on the plane earlier and make sure our carry-ons fit in the overhead compartment). As long as we have at least four bag-checks on each airline, it is worth it to keep those cards.

Other cards come with anniversary bonuses. The Amtrak Guest Rewards World card provides an annual Companion pass that, if used correctly, can offset its $79 annual fee. My wife and I travel to Providence, RI frequently enough that a round-trip train ticket + companion makes that doable. The JetBlue Plus Card has a fee of $99 but gives free checked bags and 5,000 points after every account anniversary.

Some cards come with status and not necessarily other benefits you might use. The AMEX Hilton HHonors Surpass card has a $75 annual fee but comes with Gold status at all Hilton-connected hotels. That has given me free room upgrades and free breakfast in at least three situations, totally that much money or more. Additionally, I have earned more points than usual, making it more possible to have a free night sooner. Basically, it does end up paying for itself.

It’s really the big, expensive cards that make me seriously think whether or not it’s worth it to keep them. I currently have a Citi Prestige card, which I got in December 2015 when the sign-up bonus was 50,000 ThankYou points. I applied because I knew that while it has a $450 annual fee, each calendar year it comes with a $250 airline credit. So by using it in 2015 to buy a flight and 2016 to buy a flight, I received $500 in credits to offset the fee the first year. Additionally, it also comes with a host of other benefits including access to the Priority Pass network of lounges across the globe, which my wife and I used extensively during our honeymoon. The fee just came up again and I am debating whether or not to keep the card. It is essentially a $200 annual fee card (with the offset airline credit) in order to access a whole host of lounges and potentially free hotel nights as well. I’m not sure what to do with it but I have some time to decide.

So there you have it – my basic analysis of the different types of benefits you can earn. It really is an individual decision whether or not to keep these cards and, as the Points Guy said at a recent workshop I attended, “do the math.”

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