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Each year I like to take inventory of my credit card portfolio by weighing the benefits of each card and weeding out the ones that aren’t providing enough value. There’s no shortage of new sign-up bonuses to earn, like the recently extended offer for the IHG Rewards Club Select Credit Card, or the big targeted offers for the The Platinum Card from American Express available through the CardMatch tool. I need to make room for any new additions, and since spring has officially arrived, it’s time to examine what’s in my wallet and see if there’s any pruning to be done.
Here are the factors I consider as I decide whether to keep, cancel, or convert each card:
- Are the perks/benefits of each card worth more than the annual fee?
- Is there a duplicate or substitute card that can get me similar perks/benefits and a new sign-up bonus?
- How long have I had the card? Is it worth keeping open to preserve the history of the account?
The length of your credit history makes up 15% of your credit score. While having a longer track record helps, it’s not the most critical factor. There’s no set formula that guarantees a high credit score, but having a couple old accounts should suffice to keep the average high. Close accounts judiciously, but don’t be afraid to cancel an account if it’s no longer useful. For more info, read about How Card Applications Affect Your Credit Score and Credit Cards that Offer a Free FICO Score.
My considerations might differ from yours, especially since I consistently spend a significant amount on my credit cards. I apply almost every single dollar of personal and business spending to my card accounts, as well as a lot from family and friends, so I can hit some lofty spending thresholds and earn some of the best perks out there. When evaluating your own needs, estimate how much you spend annually on credit cards, and then decide which spending bonuses are worth your while and which cards best align to the categories where you spend the most.
Keep, Convert or Cancel
Here’s how my decision-making process played out and how I decided to keep certain cards, cancel others, and convert some to duplicate or substitute cards with the same issuers for even more bonus points and perks. By “convert” I mean canceling my current card and applying for the same or similar one (if an issuer has introduced a new version) to get the sign-up bonus again.
Premier Rewards Gold from American Express: Keep
Amex recently announced some changes to this card. Beginning on June 1, 2015, you can get a $100 airline fee credit, which effectively brings the annual fee down to $95 per year for me. I earn 4x Membership Rewards points per dollar spent on airfare when I book through Amex Travel, and 2x points on groceries; that’s where I focus my spending on this card. I also like using it as a charge card so I can put big expenses on it, like the recent hefty airfare purchase I made for my team. This card will stay in my wallet as long as Amex keeps that lucrative 4x bonus on airfare.
Starwood Preferred Guest Credit Card from American Express and Starwood Preferred Guest Business Credit Card from American Express: Keep
I use this card for all my non-bonus category spending, because I think Starpoints are the most valuable loyalty currency out there — I love, love, LOVE them. I keep the business version open as well because it gives me an extra 2 stays and 5 nights of elite credit, and I value the Amex OPEN Savings benefits. Altogether I love the 4 stays/10 nights worth of elite credit these cards give me, which in my mind easily pays for the annual fees.
The Business Platinum Card from American Express OPEN: Convert
Amex recently announced the elimination of the 20% rebate on the Business Platinum when using the pay with points feature. That brings it in line with the personal Amex Platinum Card (minus OPEN Savings, which i already have access to with the Starwood Business card). I will switch to a personal platinum account, because I can get 3 additional cardholders for $175 total (that’s $58.34 each), while the Business Platinum charges $175 each. Additional cardholders get full Centurion Lounge access and Delta lounge access (guests normally have to pay, so it’s important for my partner to have his own card if we ever travel on Delta), plus the $100 Global Entry application credit and Priority Pass Select. That’s one of the best deals out there! With Business Platinum, addll cardholders are $175 EACH.
I don’t know if I’ll be able to get a sign-up bonus for the personal card (since I’ve had it before), but c’est la vie. I’ll check CardMatch for targeted offers (though those aren’t generally for existing cardholders), and I’ll report back in the unlikely event that I do earn a bonus.
Ink Plus Business Card (x2) and Chase Ink Exclusives (discontinued): Keep, cancel, and keep
I have three Ink cards right now: two Ink Plus Business Cards, and an old Ink Exclusives card. I’m going to cancel one of the Ink Plus cards, but I’ll keep the other for the 5x bonus categories. I’m undecided about the Ink Exclusives card; it’s has some unique value if you have spend a lot in non-bonus categories, because it gives you 1.67 Ultimate Rewards points per dollar when you spend $100,000 annually. However, I’m not sure I’ll be meeting that requirement this year, so I may end up closing that account as well. While I hate to get rid of a grandfathered card, I can’t justify spending that much on the old Exclusives card, and I’d rather have no foreign transaction fees and 5x categories than the convoluted old Exclusives platform.
Hyatt Credit Card: Keep
This card gives me a a free night every year in a category 1-4 property, which easily pays for the $75 annual fee.
Chase Freedom: Keep
The Freedom card has no annual fee, so keeping it is a no-brainer. I’ll maximize the 5x bonus categories each quarter to earn more Ultimate Rewards points.
British Airways Visa Signature Card: Keep
I’m on the fence about this card thanks to the changing bonus categories and the upcoming devaluation of the British Airways award chart. I’m going to keep it this year and try to meet the $30,000 spending threshold to earn the Travel Together Ticket before the 1.25x base earning rate goes away. I recently used that companion pass on a first class flight to Paris and got some decent savings out of it. This card also offers a 10% discount on British Airways purchases, and since I’m a Oneworld flyer and do buy premium BA flights, for now the benefits still justify the $95 annual fee.
Chase Sapphire Preferred Card: Keep
This is my ride or die credit card. It goes with me everywhere, including internationally. It has no foreign transaction fees, 2x points on dining and travel (and the travel category is quite broad). I love it, and Ultimate Rewards are among my most highly valued loyalty points. My Sapphire Preferred isn’t going anywhere.
United MileagePlus Explorer Card: Cancel
I don’t fly United much anymore, and the Sapphire Preferred card earns at a better rate anyway. Sapphire also offers primary rental car insurance, so there’s not much incentive to hang on to the United card. I might look into getting the United MileagePlus Explorer Business Card, which has a sign-up bonus of 50,000 miles after you spend $3,000 in the first three months, and comes with bonus earning categories that you won’t find on the personal card.
Ritz-Carlton Rewards Credit Card: Keep
I recently got this card with the (no longer available) 140,000 point sign-up bonus. The $300 yearly airline credit effectively brings the annual fee down to $95 for me, and the card has other valuable benefits like the 10% annual points premium and the $100 hotel credit for paid stays of two nights or more. I used a Ritz-Carlton Club upgrade pass in Hong Kong, where club lounge rooms cost $150 more per night. I got 2 nights out of it, so that was $300 in value from just one of my three club passes. I’ve heard that people have had trouble using them, but that wasn’t my experience.
Citi / AAdvantage Executive World Elite Mastercard: Keep
I used to have 3 Citi Executive cards when the sign-up bonus was 100,000 miles (no longer available). I’ve since trimmed that down to just one. I use that card for American Airlines Admirals Club lounge access, and to earn 10,000 Elite Qualifying Miles after spending $40,000 each year. That alone pays for the annual fee.
Citi Hilton HHonors Reserve Card: Keep
This card gives me a free night at (almost) any Hilton property after spending $10,000 each year, which is easily worth the $95 annual fee. I also get automatic Hilton HHonors Gold status, which is the best mid-tier hotel elite status out there.
Barclaycard AAdvantage Aviator Silver: Keep
This card is another no-brainer. It offers a 10% redemption rebate of up to 10,000 miles each year, and the opportunity to earn American Airlines Elite Qualifying Miles (in addition to what I earn with the Citi AAdvantage Executive card).
Visa Black Card: TBD
This card has a pretty steep $495 annual fee, which makes it even more expensive than other premium cards like Amex Platinum and Citi Prestige, even though the benefits are a step down. The sign-up bonus is worth $500 of airfare, but I haven’t really used the card or its perks much. I’ll hold on to this one for the moment, but there’s a good chance I’ll cancel it if I continue to find the value lacking and some of the benefits redundant. The next annual fee comes due later this summer — I’ll put this card to the test more in the coming months to see whether it makes sense to keep.
Barclaycard Arrival Plus World Elite Mastercard: Keep
Arrival Plus is another card I love. I earn 2x miles on all purchases, and I can redeem those miles at 1 cent apiece to cover expenses like amusement parks, train tickets, bed and breakfasts, and a variety of other travel costs. With the 10% redemption rebate, this card basically offers 2.2% cash back, making it another great option for everyday spending along with the SPG Amex.
Alaska Airlines Visa Signature Card: Cancel and get another
Bank of America lets you earn multiple bonuses with this card, so I’ll get another 25,000 (or hopefully 40,000 miles if that offer comes back around) in my next round of applications. I just used 100,000 Alaska miles to book a flight in Emirates A380 first class home from Europe, which I think is a good deal. I have a not-so-secret crush on Alaska Airlines, thanks to the lucrative Mileage Plan program and its many partners, including my preferred carrier, American Airlines.
Virgin Atlantic World Elite Mastercard: Cancel (may get again in the future, but not worth keeping)
This card has a base earning rate of 1.5 miles per dollar spent, but I’ll probably cancel it because I can get Virgin Atlantic miles through any of the transferable points programs — Virgin Atlantic is one of two airlines that partners with Chase Ultimate Rewards, Amex Membership Rewards, Citi ThankYou Rewards, and Starwood Preferred Guest. With so many other options to earn Flying Club miles, there’s not much incentive to hang on to this card.
Club Carlson Premier Rewards Visa Signature Card: Keep (for now)
Until a few days ago, this card was not only an obvious keeper, but also a strong candidate for everyday spending. Then the news came last week that the Bonus Award Night Benefit (one of the most lucrative credit card rewards out there) will disappear at the end of May. I still think there’s value to be had here, since the 40,000 points you get each year on your card anniversary easily outweighs the $75 annual fee. Club Carlson has a pretty strong presence in Europe, and I’ve enjoyed my stays at Radisson Blu properties like the ones in Madrid and Reykjavik. I’m going to hold on to this card for at least one more year and see how I feel about it then.
It looks like I’ll be cancelling 3-5 cards, which paves the way for just as many new ones. I don’t have plans to put in any applications at the moment, but I’ll be keeping an eye out for strong offers, and I’ll be ready to jump on them when they arrive.
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