Which Credit Cards You Should Hold Long-term

The other day I wrote about the problems credit card churners are beginning to face as banks tighten up how many credit cards they’ll give to one person. I’m not an avid churner, but I did open 4-5 cards this year. As a result, I’ve got some decisions to make when the annual fees come due. There’s varying opinions on which credit cards you should hold long-term. I’ll give my criteria and I’d like to know what everyone else thinks.

Canceling Cards: Credit Scores, Anniversary Rewards & More

Unfortunately, canceling a card that you just opened for a sign-up bonus can have an impact on your credit score. While not a huge part of your score, average age of accounts does move the needle. For that reason, it’s always good to keep at least a few cards around for the long haul.

Personally, I’ll keep a card for one of two reasons. The first reason is if it’s part of my overall spending strategy. At the moment I’ve got a three card rotation that is working really well. These are my go-to cards that are at the front of my wallet for everything I buy and they aren’t going anywhere until a better option surfaces.

Perfect credit card combo

The other reason I like to keep a card is if I’m rewarded for paying the annual fee. For example, the Chase Hyatt Credit Card comes with an annual free night stay at any category 1-4 property. We often visit friends in Chicago and stay at the Hyatt Place River North. This particular property is in a great neighborhood and typically retails at about $250/night. That makes the math really easy to keep a $75 annual fee credit card.

Yet another opportunity to keep a card more than a year is if the bank allows you to downgrade to a no-annual fee version. For example, if you carry the Citi ThankYou Premier Card and it’s no longer of use, a downgrade is available to the ThankYou Preferred. This allows you to keep your account open for credit score purposes, while avoiding an annual fee. Fortunately, my account history has enough older cards that I don’t need to use this method; but it’s there if needed.

Bottom Line

There’s no definitive rule about which cards one person should keep. However, if you’re going to pay an annual fee, I believe you should be actively using the card, or rewarded with an anniversary gift that provides more value than the annual fee. What do you think? Do you have a standard practice on which cards you’ll keep?

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