How to assess and build your credit card portfolio

Whether you have one credit card, a few credit cards or 22 credit cards, you may be wondering whether you have the right cards in your wallet. You also may be wondering how to further build your card portfolio.

These are personal questions, with different answers for each individual. In this guide, I will present various things to consider when you’re looking to evaluate and improve your credit card portfolio.

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How do I build my credit card portfolio?

A good place to start is to determine which cards you currently hold, as well as their benefits, earning rates and annual fees. You may also want to check your credit score, which you can do for free through various means.

Once you have a good understanding of your current situation, you can determine whether to add any new cards to your portfolio, as well as whether any cards in your current portfolio are no longer necessary. Let’s dive in.

Related: 5 ways to improve your credit score

Top card categories

Since this article is on The Points Guy, naturally we’re going to focus on credit cards that earn rewards for your spending. Rewards cards generally earn one of three types of rewards:

Cash back

Cash-back credit cards generally provide the most straightforward redemption: cash back in the form of a statement credit, check, gift card or deposit. However, some require a minimum redemption value or only allow statement credits to offset particular types of purchases.

Related: How to use cash back to hit your travel goals

Hotel or airline points/miles

Select cobranded airline credit cards and hotel credit cards earn points or miles associated with a particular hotel brand or airline loyalty program.

These cards can provide a valuable method of earning points or miles for a particular program, but in most cases you’ll be limited to redeeming your points or miles with that one program. (Marriott Bonvoy and Hilton Honors are exceptions, as you can transfer Marriott points and Hilton points to various airline partners.)

Related: Are cobranded airline cards worth it anymore?

Transferable currencies

The third type of rewards is transferable points or miles.

These points or miles are generally more valuable because they can be transferred to travel partners and used to book award flights or nights through the partner’s loyalty program. For example, you can transfer Chase Ultimate Rewards points earned by the Chase Sapphire Reserve or Chase Sapphire Preferred Card to 14 airline and hotel transfer partners including Hyatt, Virgin Atlantic and Singapore Airlines.

You can usually also use these points or miles to book directly through the issuer’s travel portal, but you may get less value from these redemptions.

Top card benefits

There are many different types of credit cards with many different types of benefits. Here are some of those possible benefits:

• Airport lounge access
• Hotel elite status
• Hotel annual free night
• Airline fee credit
• Assist toward airline status
• Access to hotel programs that provide elite-like benefits, such as American Express Fine Hotels & Resorts and Chase’s Luxury Hotel & Resort Collection
• Cellphone protection
• Shopping protections such as price protection, purchase protection, extended warranty protection and return protection
• Travel protections such as trip delay protection, baggage delay protection, trip cancellation/interruption insurance and even emergency medical evacuation insurance

Some of these benefits may provide significant value to particular cardholders but little value to others, so it’s important to realistically evaluate how valuable a card’s benefits will actually be for you.

For any cards you currently hold, make sure you understand their benefits and how much value you place on these benefits.

Choosing a card based on your spending

Most rewards cards offer bonus earning for spending in certain categories. Here are the best cards in popular spending categories:

• The best credit cards for restaurants and dining out
• The best credit cards for groceries
• The best credit cards for airfare purchases
• The best credit cards for booking hotels
• The best credit cards for gas purchases
• The best credit cards for everyday spending
• The best credit cards for entertainment spending
• The best credit cards for sports fans
• The best credit cards for hardware store purchases
• The best credit cards for streaming services
• The best credit cards for commuting

Take a look at your spending and the bonus categories on the current cards you carry. Are there any categories where you are currently spending a significant amount of money but not earning bonus points? If so, you may want to get a new card that has bonus earning for that specific category.

Alternatively, are there any categories where you spend a significant amount and can improve your earnings by moving your spending to a new credit card? If so, it may be worth adding a new card to your wallet.

Related: The best cards for each bonus category

Should I pay any annual fees?

Some people prefer to only utilize cards with no annual fees. However, the benefits and additional earning may justify paying an annual fee in some situations, so I’d recommend not immediately excluding cards with an annual fee.

Here are a few articles where we consider whether paying an annual fee is worth it:

• Is The Platinum Card® from American Express worth the annual fee?
• Is the American Express® Green Card worth the annual fee?
• Is the Chase Sapphire Preferred worth the annual fee?
• Is The Business Platinum Card® from American Express worth the annual fee?

The information for the Amex Green Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

This being said, cards with no annual fee can be excellent additions to your credit card portfolio since they can increase your earnings on particular purchases without costing you anything besides another credit inquiry.

This is particularly true in the case of the Chase Freedom Flex, Chase Freedom Unlimited and Citi® Double Cash Card since the rewards earned by these cards become more valuable if you have an eligible premium card in the Chase Ultimate Rewards family and Citi ThankYou Rewards family, respectively.

Related: Why a $500+ per year credit card isn’t crazy at all

What if a card is no longer useful?

So far, we’ve mainly considered adding new credit cards to your portfolio.

But, what if you’ve identified a credit card that is no longer useful to your earning and redeeming strategy? In this case, if the card has no annual fee, there’s no harm in keeping the card. Just be sure to put a small amount of spending on it occasionally to keep your account active.

This is especially important if this card is one of your oldest cards, as closing it would decrease your average account age (which would affect your credit score).

If a card has an annual fee and you don’t find the benefits and earning rates on the card justify the annual fee, then you’ll want to take action. You may want to call the number on the back of the card when your annual fee comes due and explain why you can’t justify paying the annual fee. The agent might provide you a credit card retention offer, or you can inquire whether there’s an option to downgrade your card to a no-annual-fee version. Otherwise, you may want to close your account to avoid the annual fee. Just do these things first if you do choose to close your card.

Related: Should I cancel my credit cards if I don’t use them anymore?

Selecting the perfect card mix

The perfect card mix is different for each person. You’ll want to consider the following questions:

• What type of rewards do you want to earn? (cash back, transferable currencies or airline/hotel points and miles)
• How many cards do you want to carry?
• Do you want some cards primarily for the benefits they offer (such as elite status or lounge access)?

If you are looking to focus your earning on American Express Membership Rewards points or Chase Ultimate Rewards points, you may want to consider one of the following collections of cards and use them as recommended:

• Amex Trifecta: The Platinum Card® from American Express (flights booked directly with airlines and flights and prepaid hotels booked with American Express Travel), American Express® Gold Card (restaurants and U.S. supermarkets), The Blue Business® Plus Credit Card from American Express (non-bonus spending)
• Chase Trifecta: Chase Sapphire Reserve (travel and dining), Ink Business Preferred Credit Card (shipping purchases, Internet, cable and phone services, advertising purchases with social media sites and search engines), Chase Freedom Unlimited (non-bonus spending)
• Chase Quartet: Chase Sapphire Reserve or Chase Sapphire Preferred Card (travel and dining), Ink Business Cash Credit Card (telecom and office supplies), Chase Freedom Unlimited (non-bonus spending), Chase Freedom Flex (rotating bonus categories)

If you’re looking to earn a more diverse set of rewards, you may prefer a mixed strategy that earns a range of transferable points and cash back on most purchases while also providing useful benefits. You may prefer to create a mixture of the following types of cards that best fits your needs:

• Luxury travel rewards card: Chase Sapphire Reserve and/or The Platinum Card® from American Express for premium travel benefits and protections
• Cobranded airline credit card: Various cards associated with airlines such as Delta, United, American and Southwest for benefits when traveling with the associated airline
• Cobranded hotel credit card: Various cards associated with hotels such as Marriott, Hilton, Hyatt and IHG for anniversary free nights and other benefits when staying with the associated hotel
• Cash-back credit card: Citi Double Cash Card for flat-rate cash back, Capital One Savor Cash Rewards Credit Card for dining and entertainment, Blue Cash Preferred® Card from American Express for gas purchases at U.S. gas stations and for U.S. supermarkets, and/or Chase Freedom Unlimited for pairing with an Ultimate Rewards earning card
• Rewards credit card: Capital One Venture Rewards Credit Card for redeeming at a fixed rate or transferring to partners
• Business credit card: The Blue Business® Plus Credit Card from American Express, Capital One Spark Miles for Business or other small business cards for bonus earnings on business expenses

The information for the Capital One Savor Cash Rewards Credit Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Related: The best business and personal credit card combinations

Additional reporting by Chris Dong.