My “Keep Vs. Cancel” Credit Card Dilemma

I pay a lot of annual fees each year. I’ve written a post on it a few years ago, so won’t repeat myself. For the most part, the same principles still apply. The fee better come with a valuable perk, or else it goes on a chopping block. That’s why I mostly keep cards that come with either renewal points or “free” hotel night. Btw, I did cancel my Southwest card shortly after writing that post.

In theory, they are all worth it. Still, our annual fees add up to a small fortune, so I’m reluctant to add any new “keepers” into the mix. After all, I’m in this hobby for free or rather deeply discounted travel. The goal is to utilize what we have for my existing travel plans and not add extra trips just to use up certificates or points.

Why I recently cancelled my Chase Sapphire Preferred 

This was a tough call because I happen to love Chase Ultimate Rewards. To me, despite some drawbacks, it’s still the king of all flexible points. It’s a simple and straightforward currency, since you can get 1.25 cents per point toward paid travel (1.5 cents via Chase Sapphire Reserve). Having Hyatt, Southwest and United as transfer partners is what sets Ultimate Rewards apart.

However, I just don’t want to pay $95 each year for the privilege of possibly needing to transfer my points. Sure, Chase has sweetened the deal by adding a $50 credit towards hotels reserved via Ultimate Rewards portal. If I had a solid plan to book revenue travel in a near future, maybe I could justify hanging on to the card. But I don’t, and $50 doesn’t go very far these days.

There is a DoorDash “free delivery” benefit, which can be useful. But we live in the middle of nowhere, so I only use it maybe a few times per year on vacations. Plus, often, UberEats has coupons that offer better value.

So, I’ve decided to get rid of my CSP. I had 60k Ultimate Rewards points left, and transferred them to my Freedom Flex card. I figured I can always convert it back if I urgently need to top off an account for a specific award. Hence, the points would be safely stored, waiting for an opportune time. So, I sent a secure message in my Chase profile, and the matter was taken care of the next day without a need for a phone call.

However, a few days later I started having second thoughts. Not about cancellation, but not transferring the points to a travel partner first. I happen to like Hyatt, a lot. More specifically, my kids like Hyatt, and the program has decent award rates on suites at local Florida resorts.

I’m almost certain we can use Hyatt points within a year or two. On the other hand, I think we have enough miles for at least a few years’ worth of vacations. And my goal is to use them up if at all possible. I’ve said before that I don’t like waste. Having miles that sit in your account for many years just feels counterproductive to me. We are constantly earning new points, and I like to see my efforts being rewarded. This hobby takes time, energy and even money. I happen to enjoy it, but I don’t like working for free.

Hyatt points never go to waste in my household, as I plan several local resort getaways with kids each year. That’s why I wanted to see if I could still transfer the UR points to Hyatt despite the cancellation of CSP. It worked! First, I tried transferring 1,000 points just to see if it goes through. After that, I transferred the remaining  59k points. I believe you have 30 days to transfer your points, though I recommend you find them a “home” first before you cancel your card.

This amount will pay for two nights in a suite at Hyatt Regency Coconut Point Resort and Spa. This same suite goes for $1k per night,  or you can use 29k Hyatt points instead. My kids love this place, so I like to take them there for a weekend at least once a year. It’s not cheap, but I view it as a special treat for our family. Points are to be enjoyed, right?

Big Hickory Island Beach at Hyatt Regency Coconut Point. Photo courtesy of Hyatt.

And now I won’t have to worry about Hyatt severing ties with Chase unexpectedly or transfer ratio being slashed. Plus, it will encourage me to use my existing stash of miles for flights. I still plan to maximize bonus categories on my Chase Freedom Flex and accumulate points passively for a few years. At some point, I will likely convert the card to CSP temporarily when the moment is right.

Why I probably won’t renew Best Western Premium credit card 

Last week I wrote a post about getting approved for Best Western credit card offer that will hopefully net me 130k points (when factoring in minimum spend+renewal points). I’ve also said that it’s unlikely that I will renew it a second time and pay another $89 annual fee.

One of the readers made this comment: “I’m not sure I follow your logic regarding not keeping the card and doing the $5,000 spend every year due to the opportunity cost. The way I calculate it, for spending exactly $5,000 during the cardmember year, you would earn 10,000 points from spend plus 40,000 points per dollar spent, or 50,000 points for $5,000 spend, or 10x points per dollar.

And using the cost per point for this year’s Daily Getaways, that is 5.5% equivalent earn – pretty good for non-bonused spend. And if you account for the annual fee, that is the equivalent of a 3.7% back everywhere no-annual fee card (for the first $5,000 spend). Unless I’m missing something?”

And here is my response: “You make good points, and this topic probably deserves a separate post. I should have said that it likely makes no sense for someone like me to spend $5k each year in order to collect this bonus. You see, we are a middle-class family and put maybe $30k on credit cards each year. Most of it goes towards sign-up bonuses, and the rest on various spending offers on Hyatt card and 5x categories on Chase Freedom Flex. I’ve even been occasionally resorting to Plastiq.

So for me, to allocate $5k of my annual spend towards Best Western card is a serious commitment. I’m willing to do it for 120k points, but 40k is a different story. You are right that the return on spending is substantial, but you have to be sure that you will maximize the points in the future. This is another problem, as Best Western is known for devaluing without notice. It is YMMV kind of deal, but I’m not convinced the juice is worth the squeeze.”

In general, when it comes to hotel points, I plan for the worst-case scenario. If my international plans fall through, can I use the points for a local getaway that doesn’t require airfare? There are a few Best Western beachfront properties in Florida that look interesting. However, they run between 50k-80k points per night.  So, if I put $5K on my Best Western card, I will only have enough points for one night. It’s just not worth it. Of course, I’m assuming having zero points at the time. Either way, this deal just doesn’t look tempting enough to me. And besides, I already have hotel certificates that need to be used up each year.

Capital One Venture X card: an outlier

Normally, I don’t renew cards that carry an annual fee of $395. That’s a lot of money. However, in this case, I plan to make an exception. First of all, I will get 10k points that can be used for $100 off travel purchases or transferred to miles on 1:1 basis.

On top of it, I can get $300 credit on travel booked through Capital One Travel portal. This year I used it for some flights we needed to purchase anyway. So, to me, just these two renewal benefits pretty much make up for the annual fee.

However, I’ve recently used most of my points towards Virgin Atlantic transfer and to cover a travel purchase. Is it still worth it to hang on to the card just to break even? For me the answer is Yes, and there are two reasons for that. First one is Priority Pass membership for primary owner, as well as authorized users.

That covers my family of four, plus in-laws. On top of it, I even added my mom and sister who live in Belarus. While they don’t fly often, this year they ate for free on three separate occasions in Istanbul and Minsk airports. I estimate they saved at least $150 for five people. We used lounge access twice, and probably saved around $60 in food costs. Priority Pass isn’t essential, but since we plan to take at least one international trip each year for the foreseeable future, I like to have it just in case. The fact that it’s essentially free via Venture X is the icing on the cake.

The second reason I plan to hang on to the card is because it earns 2 points per dollar. My husband hates switching credit cards, so I gave him Capital One Venture X for everyday spending. Before this, he had Chase Freedom Unlimited that earns 1.5 UR points on all purchases. I love UR currency, but I’ll take 2 transferrable Capital One points over 1.5 non-transferrable UR points any day.

If the value proposition on this card changes, it will go on the chopping block.

Final thoughts

My reasoning isn’t meant as an advice to readers, since personal circumstances vary. Some absolutely insist on having access to transferrable Ultimate Rewards points at all times. I can certainly understand the feeling. Plus, in the grand scheme of things, an extra $95 won’t make that much of a difference. But I am already paying renewal  fees on seven cards, so something’s gotta give. And fortunately, Chase leaves the door partially open via no-fee cards like Freedom Flex.

How does my family travel so much? We use miles and points from credit card bonuses. See my Travel Hacking 101 post as well as current credit card offers here.

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