Keep, Cancel, Downgrade: Your Card Options After Year 1
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EDITORIAL DISCLOSURE:
Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
As you might know by now, I open multiple credit cards each year, but not all of them are keepers long term! One major consideration when earning points and miles is making sure to keep track of how much you’re spending on annual fees each year and reevaluating which cards are worth keeping. Nobody wants to be paying unnecessary fees. 🙅🏻♀️
No matter what, you will always want to keep your card open at least one full year. This way you make sure to stay in good standing with the bank and then you won’t risk potentially losing that welcome offer you earned.
And since length of credit history is so important in determining your credit score, I always keep my oldest card open to maintain that credit history.
But for all other cards, you have 3️⃣ options to consider after you have had your card one full year, so let’s dive in!
Keep
This might be surprising, but many of the cards that I open I will keep open after the first year. The biggest consideration for me is whether or not the annual fee is worth the benefits that the card offers.
For instance, the Capital One Venture X Rewards Credit Card comes with a $395 annual fee, but the $300 travel credit and the 10,000 anniversary miles alone make this card worth keeping (and those are just A FEW of the amazing perks this card offers! 👏🏻).
Or consider a hotel credit card…if that card has a $95 annual fee but also offers an annual free night reward, that would make a keeper for me too since I know that I can easily get over $100 in value from a free hotel night!
Cards with no annual fee are always easy keepers for me as well!
Downgrade
If you have a credit card with a high annual fee, and you’re not utilizing many of the benefits the card offers, it might be a good idea to check and see if there is an option to downgrade your card to a no annual fee version of that card.
EXAMPLE: Maybe you had the New United℠ Explorer Card with a , but after the first year, you don’t find value in the perks that come with that card. You could call the bank and ask to downgrade to the New United Gateway℠ Card with a $0 annual fee instead.
Another time where a downgrade is a good option, is when you are hoping to earn a welcome offer a second time. Like the Chase Sapphire Preferred® Card for instance. 👉🏻If it has been at least 48 months since you had the card, and you would like to earn the bonus again, you could call the bank and ask to downgrade that card to one of the no annual fee Chase Freedom® cards. Then you could be eligible to apply and earn the welcome offer again!
Cancel/Retention Offer
When you no longer find value in paying the annual fee on a specific credit card, and there are no downgrade options available, your other option is to cancel.
Before canceling, I highly recommend calling the bank (or chatting through the American Express app) to see if there is a retention offer on your card. A retention offer is an offer that the bank can make to help offset the cost of the annual fee in the hopes of retaining you as a customer. This can typically come in the form of a statement credit or a small minimum spend offer to earn more points.
❌If there is no retention offer, no downgrade option, and the fee is not worth the benefits the card offers, it might be time to cancel!
Organizing your credit cards
If you’re like me, and you cannot possibly keep all of these dates and annual fees organized, then you need Travel Freely. This is the best free app for free travel and it can even remind you when an annual fee is due! 📲💳
EDITORIAL DISCLOSURE: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
