Advertiser Disclosure: The Rewards Mom has partnered with CardRatings for our coverage of credit card products. The Rewards Mom and CardRatings may receive a commission from card issuers.
The number one question I get asked when people find out how many credit cards I have is whether I keep all of them.
My answer? It depends.
I only keep the cards that continue to provide more value than their annual fee. If a card no longer fits my travel goals or I’m not getting enough value from it, I’ll either downgrade it to a no-annual-fee version (when that’s an option) or cancel it.
The goal isn’t to collect credit cards forever, it’s to keep the ones that make sense for you.
In this post, I’ll walk you through how I decide whether to keep, downgrade, or cancel a card each year so you can make the best decision for your own wallet.
If you’re just curious which cards make the cut, I also put together a list of the cards that currently never leave my wallet. You can check out my current long-term keeper cards here. Just keep in mind that card benefits and my own strategy change over time, so I update that list as things change.
How I Manage My Cards
As soon as I apply for a new card, I add it to my Travel Freely app. It tracks all my cards in one place and reminds me when my annual fee is coming up. That reminder is my cue to sit down and ask myself: am I still getting enough value from this card to justify keeping it? Sometimes the answer is yes. Sometimes it’s time to downgrade or close it. That one habit has saved me hundreds of dollars in fees I would have otherwise paid on autopilot.
What Is Downgrading a Credit Card?
Downgrading is when you switch to a different card from the same bank that earns the same type of rewards but comes with a lower or no annual fee. It’s a good option if you’re no longer getting enough value from your card to justify what you’re paying for it.
For example, if you have the Capital One Venture X, but can’t justify the annual fee due to unexpected expenses, you could downgrade to the Capital One Venture Rewards card. You would lose lounge access, but retain the power of 2x points earning. Both are great cards, it just depends on what you need for the time.
The benefit here is that your credit history stays intact because it’s treated as the same account on your credit report. That matters because closing a card can sometimes hurt your credit score, especially if it’s one you’ve had for a long time. Downgrading lets you keep the account open and avoid that hit.
Cancelling a Card
One thing worth keeping in mind before you cancel a card is what it could do to your credit score.
Qualifying for premium travel cards typically requires a good to excellent credit score, and closing cards too frequently can work against you. When you close an account, it can increase your overall credit utilization and eventually shorten the length of your credit history, both of which can pull your score down. That’s why downgrading instead of canceling is often the smarter move. You keep the account open, protect your score, and stay in a better position to qualify for the next great card when it comes along.
Retention Offers
Before you downgrade or cancel, call the number on the back of your card and tell the rep you’re thinking about closing the account. This routes you to the retention department, and they often have offers you won’t see just by logging into your account online.
What Retention Offers Usually Look Like
Statement credit
Often $100–$300 if you keep the card open and hit a small spend threshold within a set window.
Bonus points or miles
A lump sum added to your account just for keeping the card active, no spending required.
Reduced or waived annual fee
Sometimes temporary, sometimes for the full year, so worth asking for outright.
Boosted earning rate
A limited-time bump in points on certain categories, like dining or groceries.
A Few Things Worth Knowing
Offers vary by rep
If the first offer is weak, it’s fine to say you were hoping for something better, or to hang up and call again another day.
You have to ask
Retention offers are rarely listed publicly. The only way to find out what’s available is to call and say you’re considering closing the account.
It resets your fee clock
If you accept a retention offer, mark your calendar. Your next annual fee check-in starts over from there.
If the retention offer makes the annual fee worth it, you’re done and no downgrade needed. If not, you’ve lost nothing, and you can move on to deciding between downgrading, product changing, or canceling.
Should You Downgrade or Cancel?
This is exactly the kind of decision Travel Freely helps me make every year when that annual fee reminder hits.
Before you decide, here are a few questions worth asking:
How long have you had the card?
Older accounts help your credit score, so there’s real value in keeping them open even in a downgraded form.
Are downgrades available?
Not every issuer allows it, so check before you assume it’s an option.
Will it affect future bonuses?
Some issuers, like American Express, won’t let you earn a welcome bonus on a card you’ve held before, even if you never got the bonus the first time. Worth checking before you make any moves.
Do you need to free up space for a new card?
Banks like Capital One and American Express limit how many cards you can hold at once.
Will you lose your points?
If your card earns transferable bank points, canceling or downgrading could wipe them out unless you have another card with the same program.
If any of this feels overwhelming, check out my Beginner’s Guide to Points and Miles for a good starting point.
Why Signing Up for a New Card Might Be the Best Move
Sometimes the best move is just getting a new card. Welcome bonuses can be worth hundreds of dollars in travel rewards or cash back, and a strong sign-up offer can more than make up for any annual fee in the first year. If you’ve been eyeing a card with a big bonus and your credit is in good shape, it’s worth considering before you default to downgrading.
Here’s some lists of my favorite travel cards for FLIGHTS and HOTELS.
When Downgrading Might Make More Sense
If Travel Freely pings me about an annual fee and I realize I haven’t touched a benefit all year, that’s usually my sign to downgrade. You stop paying for benefits you don’t use, keep your account history, and still earn some rewards. It won’t be as flashy as a new card, but it still gets you those rewards.
A few trade-offs to keep in mind before you downgrade:
No welcome bonus
Downgrading doesn’t come with a sign-up bonus the way a new card would.
No intro APR offers
Many new cards offer 0% interest for the first year or more. You’ll miss out on that.
Premium perks go away
Lounge access, free checked bags, and higher earning rates don’t carry over. Make sure you’re not giving up something you actually use.
The Cards I Always Keep
After years of doing this, there are a few cards that have never failed my annual fee check. I get a lot of value from a lot of my cards and some of them will never leave my wallet. No matter what else is going on with my wallet, these are the ones that always earn their keep.
Some cards even come with extra benefits like like built-in free night certificates, so I don’t have to think about my anniversary or my kids’ soccer tournament when I need a hotel.
If you want to build your own system, start by downloading Travel Freely and adding every card you currently have. Let it do the tracking so you’re never caught off guard by a fee you forgot about.
Choose What’s Best for Your Finances
Whether you downgrade to save on annual fees, switch to a card that better fits your spending habits, or sign up for a new card to earn a big bonus, the key is making an informed decision.
If you want to maximize rewards while minimizing costs, consider:
- Applying for a new card if a sign-up bonus and intro APR would benefit you.
- Downgrading if you want to avoid an annual fee but keep your credit history.
- Product changing if you want a different type of rewards while keeping your account open.
Whatever you choose, make sure your credit cards work for you, so you can focus on what really matters: making memories with your family!
Join Our Community
Want more ideas like this in your inbox every week?
My free newsletter goes out weekly with up-to-date news, offers, and transfer bonuses.
Follow along on Instagram or join our private Facebook group for more travel inspiration.
VIEW THE COMMENTS