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Whether you've got one rewards card or a George Costanza-sized wallet with cards in every slot, it's important to take the time at least once a year to revaluate which credit cards are worth keeping.
Your spending habits, travel goals, and ability to utilize credit card perks will change over time. So will the benefits that come with your cards. With the right review strategy, you'll be able to rebalance your card portfolio to better match your needs.
In this guide, we'll highlight the factors to consider so that you can feel confident about changing the cards you keep in your wallet.
Page Contents
Start with an Inventory of Your Credit Cards and Benefits
Your first step is to do a card inventory, so empty out your wallet (and your sock drawer if you're someone who keeps cards you don't often use for purchases).
For each card, note the annual fee, how many points you earn on purchases, and list out the perks like travel or dining statement credits, free hotel nights, elite-status credits, and lounge access.
Your first task is to ensure that your cards' earning rates and statement credits are well aligned with your spending habits. You're looking for any gaps that might be remedied by swapping one card for another. For example, if you routinely spend a lot on groceries but don't have a card that offers rewards at a competitive rate on those purchases. Or maybe you have a card that comes with monthly statement credits for Uber, but you're a die-hard Lyft customer.
Your second area of focus should be on travel-related perks. For many, this presents a good opportunity to trim some fat. Do you really need 4 cards with a Global Entry or TSA Precheck credit? Do you still care about earning Medallion Qualifying Dollars through credit card spending now that you've moved from a Delta hub to a United one? And how about those free-night certificates you never got around to redeeming last year?
Through this process, you'll identify needs that might be fulfilled by a new card and existing perks that you might not be worth the annual fee. It's also a great way to remind yourself about the card benefits you still value but might have forgotten about.
What Type of Points or Miles Do You Earn?
In addition to benefits, the cards you use for purchases determine the type of points or miles you'll earn. If you aren't familiar with all the options, we highly recommend you read our guide to the types of reward points.
To summarize, the four main types of rewards are airline miles, hotel points, cash back, and transferrable bank points. The last of this group is usually a mix of the three other types—although your options will vary depending on the bank loyalty program. This is why we like to argue that transferable points are the most valuable.
Cards that offer these rewards feature transfer partners, which, when maximized, give you the chance to get top value out of your rewards. Whether you aspire to fly in the world's best business class cabins or sleep in an overwater bungalow, you can make it happen with transferable points — often for far less out of pocket than you'd otherwise pay in cash.
Another option is airline miles or hotel points. Most loyalty programs partner with credit card issuers to offer co-branded cards, which give you a chance to earn the currency of an airline or hotel program of your choice. These cards make free flights and free nights a breeze.
You can also opt for cold hard cash. Generally, cash-back cards offer rewards in the form of statement credits, a check in the mail, or fixed-rate redemptions for things like gift cards or merchandise. There's plenty of value in earning cash rewards; you can spend it however you so choose.
There's no one-size-fits-all answer about which type of card you should get. In all honesty, you're better off diversifying your rewards. But no matter what, it's helpful to have a plan on how you want to use your rewards before you apply for a card.
Related: How To Plan a Long-Term Credit Card Strategy
Maximizing Card Benefits
Most credit cards have benefits. Depending on the card, those benefits might range from unlimited airport lounge access to a reimbursement of your auto policy deductible.
It's important to consider which perks your cards offer that you value and which you can live without. There's no sense in carrying a card if you can't take advantage of its benefits.
Of course, that comes with a caveat. Certain cards have valuable benefits but not ones you'll frequently or, in some cases, ever use. Free roadside assistance, travel protections, and extended warranties might fall into this category. These are benefits worth having access to in case you need them.
But for this section, we're mainly talking about the perks that initially attracted your attention to a card. For example, suppose you have the Capital One Venture X Rewards Credit Card but never take advantage of the lounge access perks through Capital One Lounges or the complimentary Priority Pass Select membership. In that case, you might find value in swapping your $395 annual fee card for the $95 annual fee Capital One Venture Rewards Credit Card.
- Best Credit Cards for Airport Lounge Access
- Earn a Hotel Free Night Award With These Credit Cards
- Comparison of Premium Travel Rewards Credit Cards
So, consider all the benefits you pay a premium for and whether or not you use them enough to justify what they cost. And if there's a benefit you want but don't have, then the door is open to adding another card to your wallet.
Managing Annual Fees
Unless you've crafted a portfolio entirely of cards with $0 annual fees, you'll also want to consider the cost of maintaining your wallet every year. Depending on what cards you have, those annual fees can really add up.
The question you need to answer is whether each card you hold pays for itself with the benefits it delivers. For some cards, this is a pretty straightforward exercise. If a hotel card with a $95 annual fee gives you an annual free-night certificate that you use consistently, that's an open-and-shut case in favor of keeping the card.
The Platinum Card® from American Express is a great example of where your evaluation can get a lot more complicated. When fully maximized, it offers over $1,500 in annual credits (Enrollment is required for select Amex benefits.). That far outweighs the $695 annual fee (Rates & Fees).
However, if you can't take advantage of all (or most) of what the Amex Platinum offers, what are you paying a $695 annual fee for?
The bottom line is that you'll want to build a credit card portfolio that works for you at a price you're willing to pay. If you can't make the math work, it's worth re-evaluating a card's position in your wallet.
And let this also be a reminder that you shouldn't overlook no-annual-fee cards. Some $0 annual fee cards can enhance your reward-earning ability when you pair them with an annual-fee-carrying card.
For example, if you pair a specific trio of Citi cards together (two of which have no annual fee), you could earn 5X on your top spending category, 3X on airfare, hotels, gas stations, restaurants, and supermarkets, and 2X on everything else. And with all the Citi ThankYou® points you'll earn, you can book a lot of award travel or cash out with a big check.
Deciding When to Add or Remove Cards
After evaluating your wallet, you'll walk away knowing you need to add a card to your wallet, remove one, or stick with what you have. The latter is self explanatory; let's discuss the former two conclusions.
This is also a good time to check your credit report to see if you've overlooked any open accounts. Your report will disclose the age of each account and how much credit you have available—both of which are important for your score and should factor into your decision about which cards are worth keeping.
When to add a card to your wallet
The decision to add a card to your wallet shouldn't be made without some forethought. Yes, collecting a sign-up bonus is always nice, but it's worth having a plan before you apply.
Bonus aside, a new card should fill a need. Whether that's a specific perk you're after, such as airport lounge access or a complimentary checked bag on your airline of choice, you should be able to answer the “why” before you open a new credit card.
Another thing to consider is if you can afford a new card. Banks have application rules and restrictions you'll have to navigate, which can make getting a new card difficult — especially if you don't wait long enough between your applications.
The other aspect of this is the cost of an additional annual fee, provided you don't apply for a card without one. For example, if you have the Amex Platinum but then apply for the The Business Platinum Card® from American Express, you'll quickly be facing $1,390 in annual fees. If you don't have sufficient income, this can sting. At that point, the risks outweigh the rewards — literally and figuratively.
At a bare minimum, don't just apply for a card for the sake of applying. A new card should make sense and it should serve a purpose.
And we'd also be remiss not to mention that “when” you apply matters, too. Taking advantage of top credit card offers is the best way to earn a lot of points, miles, or cash back. Here's a look back at the offer history for four major issuers:
- American Express Cards: Best-Ever Offers and When You Should Apply
- Capital One Credit Cards: Best-Ever Offers and When You Should Apply
- Citi Credit Cards: Best-Ever Offers and When You Should Apply
- Chase Credit Cards: Best-Ever Offers and When You Should Apply
When to remove a card from your wallet
Just because a card makes sense right now, or did a couple of years ago, doesn't mean it'll align with your wallet or goals a couple of years from now. And that's okay. There's no harm in moving on from a card.
However, when and how you do it is important. You want to ensure you remain on good terms with the bank that issues your card and don't forfeit any of your hard-earned rewards. Here are three things to think about before you cancel your card:
- Have you held the card for at least a year? If not, issuers may claw back sign-up bonuses and restrict you from opening future cards.
- Can you downgrade your card to a no- or low-annual-fee version? This is an easy way to reduce your annual fee burden and keep a line of credit open without severing your relationship with an issuer or losing access to a rewards program.
- Have you asked for a retention offer? Some issuers will incentivize you to keep your card open for another year. In some cases, this can change the calculus of whether it's worth paying an annual fee for another year.
In other words, you shouldn't be afraid to move on from a card if it no longer works for you. However, this is contingent on you playing by the rules. Otherwise, you'll jeopardize your relationship with the banks. And that's a problem.
If you want to understand how banks decide who is innocently closing a card that isn't a good fit and who is taking advantage of them, read our guide to credit card application strategy.
Maintaining and Reviewing Your Portfolio
Evaluating your credit card portfolio and your financial standing is something you should do at least once per year. However, you'll likely benefit from doing it more often, possibly quarterly. Doing so helps ensure you're on track to meet (or exceed) your travel and financial goals. And it's also a great opportunity for you to check and make sure you're keeping the accounts you do have active.
Plus, if your situation changes — maybe you get a job that requires booking a lot of flights — you can pivot and continue to reward your spending in the best way possible. Or, if annual fees are eating too much into your disposable income, then you can reconcile that problem sooner rather than later.
The other aspect worth considering is how fast and how often the credit card market and travel industry change. As someone who pays attention to both for a living, it seems like it's just about every day that some impactful change rolls out (here's an archive of major changes!). Perhaps it's a brand-new card now open to new applicants, a best-ever welcome offer on a travel rewards card, or a well-loved frequent flyer program that doubles its award prices.
The bottom line is that as the world changes, you should, too. Staying up to date with the latest developments can help you ensure you're rewarding your spending smartly with the best credit cards possible and extracting maximum value from your hard-earned rewards.
You also might find value in learning new ways to track your rewards. AwardWallet is great for that. Getting a bird's eye view of your points and miles will help prevent rewards you've collected from expiring or credits you've earned from going unused. There's a lot more to AwardWallet than just a blog!
Don't have an AwardWallet account yet? Sign up for free and track unlimited rewards programs and travel plans!
Final Thoughts
One of the best things you can do every so often is evaluate what's in your wallet. And with that, consider your financial well-being, travel goals, and where you spend your money. Understanding those things thoroughly will help you manage your wallet efficiently and effectively.
For rates and fees of the cards mentioned in this post, please visit the following links: The Platinum Card® from American Express (Rates & Fees)
The comments on this page are not provided, reviewed, or otherwise approved by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
