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I've decided to cancel the Amex Gold and the Chase Sapphire Reserve this year.
If you use credit cards to earn travel rewards or cash back, it's important to periodically take stock of your cards to decide if they still make sense for you. I like to do this little mini-review as the annual fee comes due.
While there are credit cards with benefits that are worth the annual fee, too often people fall into the trap of paying annual fees on cards when they're not getting the benefits. I recently did a mini-review of my credit cards and picked out a couple of cards that I am going to be canceling in 2020 - here's how I arrived at these decisions.
Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back.
What happens to your rewards if you cancel a credit card?
But before we get into which credit cards I'm canceling in 2020, let's touch on what happens to your points if you cancel a credit card. There are few things worse than having all of your hard-earned miles and points just disappear, so you'll want to take the steps to ensure you won't lose your rewards.
If you have what is called a "co-branded" credit card that is shared between a hotel / airline and the credit card issuer, such as the Southwest Rapid Rewards Premier Credit Card from Chase or the Hilton Honors American Express Card, then your points are safe and you can cancel your card without fear. In the case of the Chase Southwest cards, for example, any and all Southwest Rapid Rewards points that you've earned from having the card are in your Southwest account, and closing your card will not affect that.
If you have a credit card that earns bank points such as Chase Ultimate Rewards, American Express Membership Rewards, or Citi ThankYou points, you'll need to be more careful when canceling a credit card. Some banks will let you keep your points if you have another card that earns those same bank points, while with others your points will be forfeited.
It is important to note that any perks that you have from having the card (such as free checked bags, priority boarding, or access to increased award availability) will likely disappear once you no longer have the card.
4 cards I'm canceling in 2020
Here are four cards that I'm planning to cancel this year. Some of these cards are cards with a waived annual fee where I am just not seeing the benefits to pay an annual fee. Others are ones whose annual fees I have paid in the past but due to devaluations or changes to my travel schedule, I no longer find it worthwhile to hold the card.
- Chase Sapphire Reserve - I don't personally find a lot of value in the added Lyft and DoorDash benefits. I will miss the travel insurance and the ability to redeem Chase Ultimate Rewards points at 1.5 cents per point with Chase, but I was already iffy at a $450 annual fee, so I'm a hard no on the new $550 annual fee.
- American Express® Gold Card - This is another card whose annual fee has gone up in the not too distant past. I've had my Amex Gold card for two years now, but I think it's time to move on since I'm not taking enough advantage of its benefits for it to be worth continuing to pay $250 a year.
- Hilton Honors Aspire Card from American Express - This was my hardest call, as I do believe the Hilton Aspire is the best of the premium credit cards with ultra-high ($450+) annual fees. I'll miss the Diamond elite status with Hilton and the travel credits.
- AAdvantage® Aviator® Business Mastercard® - I enjoyed this card's priority boarding, free checked bag. and access to American's reduced mileage awards. However, I don't think it suits my travel patterns as well any more, so I'm no longer willing to pay the $95 annual fee.
Cards I'll continue to pay for
As I reviewed the cards in my portfolio, these were the cards that I decided to keep:
- IHG Rewards Club Premier Credit Card - Each year after your account anniversary, you get a reward night. Although the reward night is now limited to IHG hotels that cost up to 40,000 points per night, it's still worth it to me to pay the $89 annual fee.
- The World of Hyatt Credit Card - The annual free night (valid at Category 1-4 Hyatt hotels) is worth the $95 annual fee for me. Plus, this card gives me the opportunity to work toward Hyatt elite status by meeting spending thresholds.
- Chase Ink Plus Business Card - I have one of the old Chase Ink Plus cards (it's no longer available to new applicants) and I've paid the annual fee on it for several years. For me, it's absolutely worth keeping at least one premium Chase card in order to be able to transfer to Chase's travel partners.
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
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Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
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