TPG reader credit card question: Is it worth it to renew your airline credit cards for 2021?

Editor's note: This article is part of a column to answer your toughest credit card questions. If you would like to ask us a question, tweet us at @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.

As we approach the end of a year that has been marked by changing spending habits and less travel, many are likely considering which cards they want to keep and which ones they want to get rid of going into 2021.

[pullquote source="TPG Reader Robert"]I'd be interested in your thoughts on renewals of airline reward cards. I have a Southwest Chase card and definitely get my monies worth most years. With the pandemic and both personal and business travel on hold for the foreseeable future, I think I should cancel before my December renewal since I won't be able to use the benefits (nor did I use much in 2020). Thoughts?[/pullquote]

This year has caused a lot of TPGers to take a hard look at our wallets to reevaluate which credit cards are providing us value both in the short and long term. And it makes sense to ask whether or not cobranded credit cards are worth keeping when you may not have utilized their benefits in 2020 and may not plan to use them in 2021, either.

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Should you renew your airline credit card?

Though the coronavirus pandemic has certainly shaken up a lot of things, the method for deciding whether or not to renew certain credit cards remain the same. It all comes down to one question: Does the value you get from the card outweigh the cost of keeping it?

When asking yourself this question, consider these factors:

• Does the card come with an annual fee? If the answer is no, you're likely better off keeping it unless it's keeping you from holding a more valuable card due to credit card application restrictions (such as a limit on how many cards you can have from American Express, Chase's 5/24 rule, not being able to hold more than two personal cards at once from Capital One, etc.). But if the card does charge an annual fee, you'll need to keep in mind the value you'll need to get from the card to offset that cost. A card that charges a $95 annual fee will be easier to hold onto even while you may not use it as frequently compared to a top-tier card that charges fees in the hundreds of dollars each year.
• Does the card provide long-term value? You may not be traveling in 2020, but are you planning on traveling in 2021? If the answer to that question is yes, it may be worth holding onto the card for another renewal. Right now, many have put both business and personal travel on hold. But as more countries open up to tourism, regular COVID-19 testing becomes even more standard practice and potential vaccines hit the market, that may start to change in 2021.
• How long have you had the card? Length of accounts is an important factor in determining your credit score. If you've had your airline credit card for a really long time, canceling it could negatively impact your score, giving you an incentive to hold onto it.
• Is your card offering any temporary bonus categories or other benefits? Many credit card issuers have started offering temporary spending bonuses and other benefits to help those who aren't traveling right now still get value from their cards. If you can take advantage of these temporary benefits, it might make sense to renew your card.

Related: Which card should I use? A guide to navigating COVID card bonuses and benefits

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Consider downgrading if the annual fee isn't worth it

If you do decide that the card isn't worth renewing because of the annual fee, consider downgrading to a no-annual-fee version if possible. Some cobranded airline card families (though unfortunately note Southwest) have a no-annual-fee card option geared toward those just getting started earning points or miles with the airline.

When you downgrade your card rather than canceling, you're able to keep your account open, which helps your credit score.

Related: Pros and cons of downgrading your credit cards right now

Asking for a retention offer or waived annual fee

Another option is to call customer service to request a waived annual fee or some other retention offer. Card issuers put a lot of money and resources into acquiring credit card customers, and if you've historically used the card regularly, it's certainly worth talking to Chase about whether your account is eligible for a retention offer of some kind.

I'd recommend calling Chase and respectfully explaining how the pandemic has impacted the card's usefulness. Mention that you'd like to keep the card if at all possible, and ask if they'll waive the annual fee or offer you some kind of retention bonus. There are no guarantees that you'll be offered one, but it's certainly worth a try.

Related: My Amex Platinum retention bonus: 20,000 Membership Rewards points

Bottom line

To renew or not to renew — it's a question many TPG readers and staff members alike are asking ourselves regularly. In a "normal" year when you're traveling frequently and using a wide range of cards, it can be much easier to justify keeping niche cobranded airline cards that provide specific benefits that make the annual fee worth it. But in the era of COVID-19, your airline cards may not be as useful.

Generally speaking, I'd recommend holding onto the card if you think you'll be able to use its benefits long-term and can stomach paying the annual fee. You may not use it within the next few months, but 2021 is still full of possibilities.