Opening a New Card Can Severely Reduce the Value of Your Current Travel Credit Card – Here’s How to Prevent It

  • Joseph Hostetler

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    I love:   Fantastic travel credit card benefits that save me a load of money, give me access to fancy travel extras (like airport lounges and priority boarding), and cover me with free travel insurance.

    I don’t love:   Travel credit card annual fees.

    I pay about $1,300 in credit card annual fees each year.  That sounds RIDICULOUS when I say it out loud.  But I do the math to estimate whether my credit card benefits are worth the money, and my answer is yes.

    However, I’ve been guilty of paying annual fees needlessly by failing to weed out redundant card benefits.  I’ll show you what I mean!  And you can sign-up for our newsletter for more credit card advice and tricks.

    Travel credit cards can save you SO much money.  But if you’re not watchful for redundant benefits, you can go broke trying to save money

    Beware of Redundant Travel Credit Card Perks

    Our golden rule at MMS is “DO THE MATH.”  Credit card annual fees might sound scary, but if the card benefits save you more than the cost of the annual fee, what’s the problem?

    For example, if you open the Chase Sapphire Preferred Card, you get a bunch of cool benefits, like:

    These perks TOTALLY make the card a keeper forever.  They’ve saved me lots and lots of money throughout the years.  The trip delay benefit just reimbursed me ~$270 for a recent flight delay.

    But guess what?  The United℠ Explorer Card has these same travel benefits.

    Both of these cards have a $95 annual fee (waived the first year).  So if I’ve opened both cards, I need to make a decision.  Is it worth keeping BOTH cards?

    Each card has other unique benefits, but when you’re deciding whether to pay the annual fee, DON’T ACCOUNT FOR THE BENEFITS THESE CARDS HAVE IN COMMON.  If each card’s unique benefits are valuable enough to warrant the $95 annual fees, you should keep them both.

    Example:   The United Explorer Card gives you:

    Will you save more than the $95 annual fee with those benefits alone?  If so, the card is a no-brainer.

    The Chase Sapphire Preferred:

    Will you save more than the $95 annual fee with those benefits?  Keep the card.

    But if you answer NO to either of those, it’s not worth paying the annual fee!  Cancel or downgrade one of them to a no annual fee card.

    This Is Especially True for Premium Travel Credit Cards With Much Higher Annual Fees

    Premium travel cards have all KINDS of fantastic perks.  Read through their list of benefits and it’s not difficult to realize how quickly you’ll negate an annual fee.

    Example:   The Chase Sapphire Reserve charges a $550 annual fee.  The card comes with benefits like:

    Add-in a fat welcome bonus and generous earning rates, and this card is at least worth a test-drive for a year or two.

    But hark!  You now want to open the super valuable U.S. Bank Altitude™ Reserve Visa Infinite® Card.  It’s got a $400 annual fee, but comes with perks like:

    So as you can see, while the US Bank Altitude Reserve comes with perks WELL worth the annual fee, it’s not NEARLY as valuable when you also have the Chase Sapphire Reserve.

    Bottom Line

    As you open more travel credit cards, some of your other cards may drop in value.  That’s because you’re almost guaranteed to have overlapping benefits.

    When you’re doing the math to decide if a card is worth the annual fee, don’t just run down the card benefits.  Examine ALL of your cards, and decide if that one specific card has benefits unique enough to justify the annual fee.  Otherwise, you’re needlessly paying money to the banks!

    Let me know if you’ve had issues like this in the past.  And subscribe to our newsletter for more credit card strategies and travel tips:

    Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)
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