I know I talk a LOT about leveraging your everyday spending and new card welcome bonuses to get your family on bucket list family vacations for NEXT TO NOTHING (looking at you Hawaii!)

yes Target runs >>> turned nearly free family vacations!!

BUT…

But what do you do with those cards when you’re done? Let’s talk about the elephant in the room – canceling credit cards.

The 3 Most Important Rules of Canceling Credit Cards

1. NEVER cancel a credit card BEFORE the one year mark!

Whenever you sign up for a new card, you will always immediately pay the annual fee. However, if you can pay $95 for $1,250+ in free travel (hellllooooooo #1 Travel Rewards Card, Chase Sapphire Preferred® Card)…who would say no to that?!

HOWEVER, if you are just perpetually paying dozens of annual fees…well then that completely negates the whole free vacation thing right?!

So ideally, over time we downgrade (mostly this, especially with personal cards) or cancel the cards (most cancellations are happening with business cards, as it doesn’t impact our personal credit!) that no longer serve us beyond that welcome bonus.

This is in order to keep our out of pocket cost as LOW as possible, and our amount of travel as HIGH as possible.

HOT TAKE: A credit card is always, always worth the annual fee that first year due to that really big, juicy welcome bonus (again ex. $95 to get $1,250+ at a MINIMUM in free travel…yes pleasseeee!!)

However, after that first year it’s important to assess whether that card is providing MORE ongoing value than the annual fee.

If not, you can downgrade or cancel that card…

but only, only AFTER that one year mark of opening that card!

This is because, if you downgrade or close the card any soon than that it is a red flags to banks that you are “churning.” And we want to keep the banks HAPPY and your credit in peak health!!

So once, that second annual fee posts, you’ll want to downgrade or cancel your card within that 1st 30 days. All banks but Capital One, will pretty reliable refund or prorate that annual fee for you!

***This is another reason why I loveeeee the Travel Freely app. It’s a (FREE!) credit card app that helps you organize all your cards, sends you notifications about upcoming annual fees (no way I can keep track of all of this on my own!), and even helps you tick off your minimum spend.

SIGN UP FOR THE TRAVEL FREELY APP HERE! This is a MUST-HAVE!!

2. When possible, NEVER cancel your oldest credit card.

Your oldest credit card helps establish the length of your credit history, which is a significant piece of how your credit score is calculated. (GAP or Costco credit card from 2001 anyone!?!)

Keeping your oldest credit card open, keeps your credit history LONG…

And a LONG credit history = a HIGH credit score…and a score that can bounce back easily with new injuries etc!

So unless a card has an outrageous annual fee or terrible terms, keep your oldest card open when at all possible (especially if it doesn’t have an annual fee!! There is no harm at all to you, and it is actually only HELPING keep your credit score in peak health!)

***Remember, it is suchhh a misconception that opening a ton of new cards for nearly free travel automatically = tanking your credit score. WRONG!! It is so so much more about how you manage all those cards (i.e. paying off balances in full and on time, EVERY TIME), rather than how many cards on your account!

3. Never, EVER cancel a bunch of cards at once.

Remember, maximizing your everyday spend and points for (almost) free travel is only as effective as YOU are responsible.

There ARE guidelines to this whole points for travel thing, and if you can stay within those guides you CAN have your cake and eat it too.

….you can see your credit score the highest its ever been, AND travel more than you ever thought possible- for way LESS than you ever thought possible!!

One of those guidelines is this though: don’t ever go on a credit card cancelling spree.

Again, it’s a red flag to both the banks and the credit bureaus…and we want only GREEN flags there.

Ideally I like to space any cancellations by 30 days, especially if it is with the same bank!

Bonuses: Earned! Now What?

Okay, so let’s say you hit those minimum spends for allllll those vacation points and its been a year, right? What’s next? Here are your options:

1. Call the credit card company (or some banks like Citi and American Express give you the option to message in!) and downgrade to a No Annual Fee card. Again, if you call within 30 days, most will refund that annual fee!
2. Ask for a “retention offer”. They might offer you an amount of points to cover the annual fee or an offer to spend “x” amount to earn “x” number of points that will offset that annual fee. American Express is most known for offering retention offers.
3. Close the card (again, we are mostly closing business cards!). Like I said earlier, just don’t close a slew of cards at once. And remember, your oldest card is OFF LIMITS when possible!
4. Keep it! If a card is providing MORE ongoing perks than the annual fee, it’s a long term keeper. The two cards below and are of my “will never let go of” cards because they help our family travel more and BETTER ongoing, despite the annual fees!

Also, if you’re curious, check out the surprising third card I NEVER let go from my wallet and why HERE!

My top two keep FOREVER cards right here!!

***If the card is a co-branded card (meaning it is a major bank partnered with an airline or hotel brand) – you will NOT lose your rewards as the points are now with THAT airline or hotel. For example, if you cancel the the Southwest® Rapid Rewards® Performance Business Credit Card, your points would remain with Southwest even if you cancel that Chase card.

However, if the card is a FLEXIBLE points card (a general bank card like the Ink Business Unlimited® Credit Card) you will want to ideally move those flexible points to another card before cancelling or use them!

What Cards We Have Canceled Lately:

Sometimes it helps to get some real life, tangible examples right?!

Here’s a little sneak peak into our wallets and IRL points journey (because I am notttttt living off referral points people, and I am earning those vacations JUST as I teach you to do!!)

• DOWNGRADED: Citi^® / AAdvantage^® Platinum Select^® World Elite Mastercard^® (Abby) – We signed up just over a year ago and got 75k AA points the first year! But don’t fly AA much, so it was time to downgrade. I downgraded this card to the no annual fee Citi Custom Cash^® Card.

• DOWNGRADED: Marriott Bonvoy Boundless® Credit Card (Luke) – We got this 2 years ago for 5 free nights at Disneyland! Which was AWESOME! But we want to earn this bonus again in the future, so we downgraded to the no annual fee version (after using that annual free night certificate!). We’ll cancel this card likely when we want to earn the welcome offer on this card again!

• CANCELLED: The Hilton Honors American Express Business Card (Luke as a sole proprietor) – The recent changes and increased annual fee just made this card not worth it anymore. Besides, I just recently got the American Express Hilton Honors Aspire card, so that card provides more lucrative benefits. Since it’s a business card, our personal credit isn’t even touched. Score!

• CANCELLED: Ink Business Preferred® Credit Card (Abby as an LLC)- I keep the Chase Sapphire Preferred® Card long term, and this card is essentially the business card version. No need for both! After earning nearly 100,000+ points for travel and waiting one year, this was a card that was an easy cancellation.

So there you have it!

***Keep in mind, even if you DO cancel a personal card…it is notttttt the end of the world (yes, yes we avoid it when we can)!! Your credit scores are SO much more fluid than we think. Especially if the card is a newer account, you may see a small dip in your score when cancelling, however with full and on time payments on your other accounts, your score will pop RIGHT back up!

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I hope this was helpful in understanding the ins and outs of canceling cards. Make sure you’ve downloaded our Points 101 guide or snagged the Points 201 for more advanced step by step help.

ORRRRR my absolute favorite thing is to help guide you 1:1, holding your hand step by step to get those bucket list vacations from “one day” to “going and BOOKED!” You can book your spot with me here!