Stories
Is your credit card still worth keeping? How to evaluate benefits
- •Banks frequently revise credit card rewards, caps, and terms, meaning the actual benefits you receive may quietly decrease over time.
- •Review your recent statements and check the bank website for updated rules regarding spending caps and excluded categories like fuel or rent.
- •Compare the annual fee against the actual cashback, vouchers, and benefits you used in the past year to decide if the card is still profitable.
- •Closing an old card can shorten your credit history and lower your total credit limit, which may negatively impact your credit score.
- •Never spend money just to reach reward targets or hit spending thresholds, and always pay your full balance on time to avoid interest charges.
Key Questions Answered
To check if a credit card remains valuable, review your recent bank statements to see where your money goes and calculate whether the benefits, cashback, and vouchers you actually used exceed the annual fee. Check the bank's website or app for updated terms, as benefits and reward caps frequently change.
High headline rates can be misleading because many cards impose monthly cashback caps, restrict certain spending categories like fuel, rent, or insurance, or tie perks like airport lounge access to minimum spending requirements. Additionally, reward point redemption values can vary significantly depending on how and where you use them.
Closing an old credit card can negatively impact your financial profile by reducing your total available credit limit and shortening your overall credit history length, both of which can lower your credit score. Before closing a card, ensure you use up any accumulated reward points.
