Many consumers have credit cards that they’ve kept for years, even if they’re unsure why they still have them. Credit card annual fees, earn rates and benefits change on a regular basis. For this reason, it’s smart to evaluate your credit cards regularly to determine if they’re still a good fit for your wallet.
This article will walk you through the process of deciding whether to keep or replace your cards, tell you how to handle annual fees, and offer no-fee card alternatives if you’re looking to avoid paying them.
How Often Should You Change Credit Cards?
You should review your credit cards on a regular basis, just like an annual job review.
The decision to keep or replace a credit card generally comes down to two questions:
- Can you afford the annual fee?
- Are you getting enough value to justify the cost?
If you can’t afford the annual fee, it is a no-brainer decision to replace the card. Whether you are focusing on paying off your debt, saving up for a large purchase or living with a tight budget, paying an annual fee (even if the benefits are amazing) may not be a wise choice. In that case, you can replace the card or ask to downgrade it to a no-fee version.
For cardholders who can afford the annual fee, the answer is more nuanced. Keeping or replacing the card depends on the value of the card’s benefits and how much you’re earning in rewards on your spending.
Edward Pizzarello, a road warrior and host of the Miles to Go Podcast, recommends “a wallet checkup twice a year” to evaluate the benefits, your spending patterns and the card’s annual fees.
When You Should Change Credit Cards
If you’re thinking about when to change credit cards, the best time to do so depends on how you use the card and if there have been any recent fee or benefits changes. If you’re not using the card’s benefits, its bonus categories don’t align with the way you spend or the card’s annual fee increased too much, it may be time to cancel or replace the card. Additionally, you’ll need to ask yourself if the card’s interest rate matches how you use it.
If the Benefits Don’t Align With Your Lifestyle
Credit card benefits change on a regular basis, and so do your preferences. A card that was perfect for you a year ago may no longer offer benefits that fit your lifestyle today. For example, say that you used to live in Las Vegas and enjoyed visiting the American Express Centurion Lounge before every flight. But you moved to Nashville, Tennessee, and there is no Centurion Lounge available at your home airport. You may be able to enjoy the lounges if you travel through participating airports, but the value of that benefit is greatly diminished.
The Card’s Bonus Categories Changed
During the early stages of the coronavirus pandemic, several credit card issuers recognized that people weren’t traveling as much. The banks pivoted to offer updated bonus categories that aligned with staying at home, such as dining, groceries and gas. If you’re still traveling regularly, though, it makes sense to look at the latest credit card offers to maximize your rewards.
Some travel credit cards now offer up to 10 points per dollar spent when booking travel through the issuer’s travel portal. For example, you’ll earn 10 points per dollar….ReadMore….
