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Whether you’ve got one rewards card or an overstuffed, George Costanza-style wallet with cards in every slot, it’s worth taking time at least once a year to reevaluate which credit cards are worth keeping. Doing so helps ensure your wallet aligns with your spending habits, travel goals, and your ability to actually use the perks and benefits that come with the cards you carry.
In this guide, we’ll highlight a handful of factors to consider to make evaluating and rebalancing your wallet a piece of cake.
Take Inventory of Your Credit Cards and Benefits
Your first step is to take inventory of your cards. Empty out your wallet — and your sock drawer if you’re someone who keeps seldom-used cards tucked away.
For each card, note the annual fee, how many points you earn on purchases, and the headline perks, such as travel or dining statement credits, free hotel nights, elite status credits, and lounge access.
From there, start by making sure your cards’ earning rates and statement credits align with your spending habits. Look for gaps that could be fixed by swapping one card for another. For example, if you spend a ton on groceries but don’t have a card that offers bonus rewards in that category, that’s an easy problem to identify and solve.
Next, focus on travel-related perks. For many people, this is where you can trim some fat. Do you really need four 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 what about those credit card free night certificates you never got around to redeeming last year?
By the end of this process, you should have a clearer picture of where you might benefit from adding a new card and which existing perks may no longer justify the annual fee.
It’s also a helpful way to remind yourself of the benefits you still value but may 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 different types of reward points.
At a high level, the four main types of rewards are airline miles, hotel points, cash back, and transferable bank points. The last category is often a mix of the other three, though your options will vary depending on the bank’s loyalty program. That’s why we generally consider transferable points to be the most valuable.
Cards that earn these rewards come with access to transfer partners, which, when used strategically, can help you get the absolute most out of your points. Whether you want to fly in business class cabins or stay in an overwater bungalow, transferable points can make it happen, often for far less out of pocket than paying cash.
Another option is earning airline miles or hotel points directly. Many loyalty programs partner with credit card issuers to offer co-branded cards, giving you a way to earn a specific program’s currency. These cards can make it much easier to rack up free flights and hotel nights.
- Best Hotel Rewards Credit Cards
- Hotel Credit Cards With Free Nights
- Best Airline Credit Cards With Annual Fees Under $100
- Comparison of Premium Airline Credit Cards
You can also opt for cold, hard cash. Cash back cards typically offer rewards as statement credits, checks in the mail, or fixed-rate redemptions for things like gift cards or merchandise. There’s real value in earning cash rewards, since you can use them however you choose.
- Our Favorite Cash Back Credit Cards With Welcome Bonuses
- Comparing American Express Cash Back Cards
- Earn Up to 3.5% Cash Back on All Purchases With No Annual Fee
There’s no one-size-fits-all answer when it comes to choosing the right type of card. In most cases, you’re better off diversifying your rewards. That said, it’s helpful to have a plan for how you want to use your rewards before applying for a new card.
Related: How to Plan a Long-Term Credit Card Strategy
Maximizing Card Benefits
Most credit cards come with benefits. Depending on the card, those perks can range from unlimited airport lounge access to reimbursements of your auto policy deductible.
It’s important to identify which perks you actually value and which you can live without. There’s no sense in carrying a card if you’re not taking advantage of what it offers.
That said, there’s a caveat. Some benefits are valuable even if you don’t use them often, or ever. Things like free roadside assistance, travel protections, and extended warranties fall into this category. You may not need them regularly, but they can be incredibly useful when you do.
You should also focus on the perks that originally drew you to a card. For example, suppose you have the Capital One Venture X Rewards Credit Card but never use the lounge access perks through Capital One Lounges or Landings — or are generally unable use the entirety of its $300 travel credit. In that case, it might make sense to swap your $395 annual fee Capital One Venture X 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
Take a close look at the benefits you’re paying for and whether you use them enough to justify the cost. And if there’s a perk you want but don’t currently have, that’s a good sign it might be worth adding another card to your wallet.
Managing Annual Fees
Unless you’ve built a portfolio entirely of cards with $0 annual fees, you’ll also want to consider the cost of maintaining your wallet each year. Depending on which cards you hold, those fees can add up quickly.
The key question is whether each card pays for itself through the benefits it delivers. For some cards, this is a straightforward calculation. If a hotel card with a $95 annual fee gives you a free night certificate each year that you consistently use, that’s an easy case for keeping it.
The American Express Platinum Card® is a good example of where things get more complicated. When fully maximized, it can offer over $3,500 in annual credits (Enrollment is required for select Amex benefits.), which easily outweighs the $895 annual fee (Rates & Fees).
But if you’re not using all or most of what the Platinum Card® offers, it’s worth asking what you’re really paying that $895 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 comfortable paying. If you can’t make the math work, it’s worth reevaluating a card’s place in your wallet.
This is also a good reminder not to overlook no-annual-fee cards. Some $0 annual fee options can meaningfully boost your earning power when paired with a card that carries an annual fee.
For example, if you pair a specific trio of Citi cards together, two of which have no annual fee, you can earn 5X on your top spending category, 3X on airfare, hotels, gas stations, restaurants, and supermarkets, and 2X on everything else. With all the Citi ThankYou points you’ll rack up, you can book a lot of award travel or cash out for a sizable check.
Deciding When to Add or Remove Cards
After evaluating your wallet, you should have a clear sense of whether you need to add a card, remove one, or stick with what you have. The last option is self-explanatory, so let’s focus on the first two.
This is also a good time to check your credit report to make sure you haven’t overlooked any open accounts. Your report will show the age of each account and how much credit you have available, both of which play an important role in your credit 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, earning a sign-up bonus is always nice, but it’s worth having a plan before you apply.
Beyond the bonus, a new card should fill a specific need. Whether that’s a perk you’re after, like airport lounge access or a complimentary checked bag on your airline of choice, you should be able to clearly answer the “why” before opening a new credit card.
Another factor to consider is whether you can realistically get approved. Banks have application rules and restrictions you’ll need to navigate, which can make it harder to get a new card, especially if you’re applying too frequently.
Another piece of the puzzle is the cost of an additional annual fee, assuming you’re not applying for a no-annual-fee card. For example, if you already have the Platinum Card® and then apply for The Business Platinum Card® from American Express, you’re suddenly looking at $1,790 in annual fees. If your income can’t comfortably support that, it can sting. At that point, the risks start to outweigh the rewards, both literally and figuratively.
It’s also worth noting that timing matters. Taking advantage of limited-time offers is one of the best ways to earn a large stash of points, miles, or cash back. Here’s a look 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 today, or did a few years ago, doesn’t mean it will continue to align with your wallet or goals down the road. And that’s okay. There’s nothing wrong with moving on from a card.
That said, when and how you do it matters. You’ll want to stay on good terms with the issuer and avoid forfeiting any rewards you’ve earned. Here are three things to consider before canceling a card:
- Have you held the card for at least a year? If not, issuers may claw back your sign-up bonus or restrict you from opening cards in the future.
- Can you downgrade your card to a no- or low-annual-fee version? This can reduce your costs while keeping the account open, preserving your credit history and relationship with the issuer.
- Have you asked for a retention offer? Some issuers will offer incentives to keep your card open for another year, which can change the math on whether the annual fee is worth paying.
In other words, don’t be afraid to move on from a card if it no longer works for you. Just make sure you’re doing it the right way. Otherwise, you risk damaging your relationship with issuers, and that can cause problems down the line.
If you want to better understand how banks distinguish between normal behavior and potential abuse, check out our guide to crafting a credit card application strategy.
Maintaining and Reviewing Your Portfolio
Evaluating your credit card portfolio and overall financial picture is something you should do at least once a year. That said, you’ll likely benefit from reviewing it more frequently, possibly on a quarterly basis. Doing so helps ensure you’re on track to meet or exceed your travel and financial goals.
Plus, it’s a good opportunity to confirm that you’re keeping your accounts active.
As your situation changes, your strategy should, too. Maybe you land a job that requires frequent travel. That’s a chance to pivot and make sure you’re earning rewards in the most effective way possible. Or, if annual fees start eating too much into your disposable income, you can address the issue before it becomes a bigger problem.
The credit card and travel landscape changes often
It’s also worth considering how quickly the credit card and travel landscapes evolve. Changes and new developments roll out frequently, from new cards hitting the market to record-high welcome offers or major devaluations in loyalty programs.
And as things change, your approach should change with them. Staying up to date can help you reward your spending more effectively and get the most value from your points, miles, or cash back.
You may also benefit from better tools to track your rewards. We may be biased, but AwardWallet is a great tool for this. Having a clear, centralized view of your points and miles can help you avoid expiration and make sure you’re using the rewards and credits you’ve earned. There’s a lot more to AwardWallet than just the blog.
Don't have an AwardWallet account yet? Sign up for free and track unlimited rewards programs and travel plans.
Related: What Perks Does AwardWallet Plus Provide?
Final Thoughts
One of the best things you can do from time to time is evaluate what’s in your wallet. With that in mind, consider your financial situation, travel goals, and where you spend your money. Having a clear understanding of each will help you manage your wallet more efficiently and effectively.
For rates and fees of the cards mentioned in this post, please visit the following links: American Express Platinum Card® (Rates & Fees)
