Credit card points and miles are INVALUABLE if you want to travel more…but don’t quite have the budget for allllll of your bucket list dreams.

But when you say things like, “Luke and I have opened 6 credit cards this year,”….you wouldn’t believeeeee the jaws that statement can drop. And everyone’s question is always the same – are those credit card fees even worth it?? And are you keeping all those cards?!!

Because if you are spending hundreds of dollars on fees then you’re not really getting any travel for “free,” right?

Let’s dive in below!

The Value of Credit Card Points and Miles

First things first, let’s establish WHY credit card points and miles are (LIFE-CHANGING) valuable in case you’re new to this reward travel world.

These rewards currencies can be used to book flights, hotel stays, car rentals, or paying yourself back for general travel expenses in some cases.

When you leverage your credit card points and miles the RIGHT way, you can take vacations for WAY cheaper that you ever thought possible. Think…

• 5 Star Luxury Resorts for a literal $0 (and for half the number of points you’d use in your credit card portal!)
• Business Class Flights for a FRACTION of the cost (think paying $50 instead of $5,000!)
• Flights to bucket list places like Europe for $200 instead of THOUSANDS

I have gotten to take my favorite people in this entire world to see the ENTIRE WORLD for a fraction of a cost all by strategically opening up new credit cards and then learning how to use those points for their MAX travel potential.

If you could pay $95 to get $3,000 worth of travel would you?? If you could pay $2,000 to get $50,000 worth of travel, would you?! I know I WOULD.

But Hear Me Out!

Here’s why I happily give away money to these credit card fees.

A credit card is ALWAYS worth the annual fee the first year of opening. And that is because of the amazing welcome bonuses you earn at sign up.

Even if it is a card I know I will downgrade (or potentially even cancel) in time, it is ALWAYS worth paying that annual fee the first year if it means I will get X amount of travel in my pocket in return.

For example, on the my FAVORITE Chase Ink Business cards- the Ink Business Preferred® Credit Card you will pay a $95 annual fee initially. HOWEVER, once I use my everyday expenses to meet that minimum spend…I am going to earn almost 100,000 points for travel in return.

IF used to their max potential- that 100,000 points could easillyyyyy equal $2,000-3,000 in travel!!

This is a card I would likely downgrade after one year, and then cancel after year two (so I can get earn the welcome offer on it AGAIN after 24months!!), but it will WELL WORTH paying that small $95 annual fee to get SO much travel back in our pockets.

However there are some cards, like our faveeee Capital One Venture X Rewards Credit Card that offer INCREDIBLE perks that farrrr outweigh (the sometimes even HIGH annual fees).

Best Perks for My Favorite Cards

Capital One Venture X Rewards Credit Card ($395 annual fee, Best Premium Card)

• Unlimited Lounge access for the WHOLE family – when you’re a larger family and you need some decent food AND a place to decompress before or after a long haul flight, you will never be the same after getting this perk!
• Annual Credits – This card offers a $300 annual travel credit (usable in the Capital One portal) AND 10,000 anniversary points (worth a MINIMUM of $100 in travel)….between those two credits alone, that seemingly scary at first, $395 annual fee is canceled out!
• TSA Pre-Check or Global Entry – If you’re planning on doing a lot of domestic travel, that TSA Pre-Check will save you tonssss of time. If you’re planning to do more international, the Global Entry is GOLD!
• Trip Insurance- This is always the card I use to book our travel with! Robust built in trip cancellation and delay insurance, delayed and damaged baggage coverage…SO valuable.
• Travel “Reimbursing Feature” – With this you can cover expenses that are coded as travel WITH POINTS! So while it’s not the best value for your points per say, this can be a great way to lower costs on some of that harder to save on travel (i.e. Airbnbs, rental cars etc)

Chase Sapphire Preferred® Card ($95 annual fee, Best Starter Card)

• Transfer Partners- This card for sure offers the most varied and valuable transfer partners of any card! The ability to transfer to Hyatt alone (the GOAT of saving on hotel stays) is worth the $95 annual fee!!
• Trip Insurance- Robust built in trip cancellation and delay insurance, delayed and damaged baggage coverage…again this alone is WELL WORTH the low $95 annual fee
• $50 Annual Chase Travel^SM Hotel Credit- Not a huge perk, but again if you use this credit it cuts that annual fee in HALF!
• 3x Point Categories- When not working on a new minimum spend, getting the most points on every single person is CLUTCH to earning your family the most travel possible. With the Sapphire, you earn 3x points on online groceries and dining out (HUGE!)

When an Annual Fee Makes Sense: Free Night Certificates

When it comes to hotel cards, many times it may make sense to keep a card around because of the annual free night perk it offers.

For example, on my favorite Hilton Honors Aspire Card ($550 annual fee)- it comes with a YEARLY essentially uncapped Free Night Certificate usable for any standard night at ANY Hilton property. I can use this on a property that goes for $1,000-1,500 a night. So when you look at that coupled with the bi-annual resort and airlines credits- this one is for sure a keeper for me.

The World of Hyatt Credit Card ($95 annual fee) offers a Free Night Certificate bookable for any Category 1-4 property.

The Marriott Bonvoy Boundless® Credit Card ($95 annual fee) offers a Free Night Certificate for up to 30k points a night (I am finding this harder and harder to use!)

The IHG One Rewards Premier Credit Card ($99 annual fee) offers a Free Night Certificate for up to 40k points a night.

Do the math, do your research, and really take a look at if that annual fee is worth keeping around for the yearly free nights. For me, the Hilton card is a keeper, and the Marriott card is not for example. 🙂

Options If The Annual Fee Isn’t Worth It

So what if you opened a new card, earned the welcome bonus, but then it’s not one of those “forever keeper cards” ?! One that your ALWAYS want in your wallet and the perks far outweigh that yearly cost.

THEN I look at either downgrading (more often) or cancelling the card (less often and usually with business cards).

A few KEY very important things of note:

1. Never ever cancel your oldest standing cards. You can use a free resource like Credit Karma to see your oldest credit cards. If you cancel one of your most seasoned credit cards, this will greatly impact your credict history length. We want that as LONG as possible to keep your score high!
2. Never downgrade OR cancel a card before the one year mark– If you close or product change a card before that second annual fee posts, it is a bigggg red flag to banks. Wait AFTER the one year mark and then make any changes!

Once that one year mark passes, THEN you can start to assess if this is a card you are holding on to or changing. And once you do here are your options:

Downgrade Your Credit Card

This is the MOST ideal option. (Remember if we just keep indefinitely paying tons of annual fees…it completely defeats the whole FREE travel thing).

Downgrading your card, or product changing your card, keeps both your credit history and relationship with the bank most in tact! It cancels out that ongoing annual fee, but you still got the perks of that big, juicy welcome offer.

Another reason, why the Travel Freely app is literal walking GOLD when it comes to nearly free travel. It keeps tracks of all my cards, notifies me of upcoming annual fees, and tells me EXACTLY what card options I have to downgrade to when I call into the bank!!

Examples of downgrades we have personally made:

• Citi® / AAdvantage® Platinum Select® World Elite Mastercard® >> Downgraded to the No Annual Fee Citi Rewards+^® Credit Card
• Chase Ink Business Preferred® Credit Card >> Downgraded to the No Annual Fee Chase Ink Business Unlimited® Credit Card
• Marriott Bonvoy Boundless® Credit Card from Chase >> Downgraded to the No Annual Fee Marriott Bonvoy Bold® Credit Card from Chase

Ask For a Retention Offer

You can also call up the company and ask for what’s known as a retention offer. A retention offer is essentially when the credit card company offers you “x” value that may cancel out that annual fee, for keeping your card for another year.

Examples, of a retention offer might include a statement credit for the annual fee cost or “x” number of points for spending “x” more on your credit card (again essentially nullifying that annual fee)

Remember the answer is always no if you don’t ask!

Give the bank a call (or in the case of American Express and Citi, you can just use their messenger within your account!), say “Hey, I am not getting as much value out of this card as I thought. Do you have any current retention offers?.”

Doing this means you’re risking hurting my credit score with a cancellation, which is super important. And keeping that credit line open with the bank, which they like!

Cancelling a Credit Card

If those options are a no, thennnnn I’ll potentially cancel the card. I am more likely to cancel a business card than a personal card, as those cancellation do not impact our personal credit scores.

Here are the reasons I might be cancelling a credit card:

• I have done the math, and the yearly perks do NOT outweigh the annual fee
• There isn’t an option to downgrade to (pretty rare)
• I want to get the welcome offer on that card again in the future (SO many cards allow you to get the bonus on them every 24-48 months!)

Again, always make sure to wait the full year before cancelling a card and when possible never cancel your most seasoned credit cards!

Do you want to be thoughtful and wise about cancelling a credit card (especially a personal one)? ABSOLUTELY. However, despite what you’ve heard your whole life…cancelling a card here and there is NOT the end of the world. You will likely see your score drop temporarily, however with full and on time payments on other accounts, your credit score will pop right back up!

Examples of credit cards we have cancelled:

• Southwest Rapid Rewards® Plus Credit Card – Southwest does not have a no annual fee option on their personal cards. This card is a huge piece of earning the Companion Pass to get my family BOGO flights for 2 years. So if I want to earn the Companion Pass over and over, I need to cancel this card and earn the bonus again 24months later.
• Chase Ink Business Cash® Credit Card – I want to earn the bonus on this card again. I usually cancel this card after 2 years since it has no annual fee.
• The Hilton Honors American Express Business Card – This card was well worth the elevated offer, especially because it came with a Free Night Certificate on top of the higher than normal bonus points. However, in the past year, they made some changes to the benefits as well as INCREASED the annual fee, so I could no longer justify that cost.

So, here’s the big takeaway.

Repeat after me: annual fees on credit cards are not inherently bad. Especially when they come with INVALUABLE perks like a fancy dancy VIP airport lounge, free night certificates, or access to insanely valuable transfer partners.

If a card CONTINUES to allow you to travel more or travel better after that juicy welcome bonus, its a keeper. If not, consider your options!

Make sure to snag my Points 201 Course where I dive deeppppp into all this and exactly HOW to use those precious points for the MOST travel possible!