What to do When Annual Fees Post

Many credit cards with annual fees waive the annual fee the first twelve months. Twelve months have passed since I got my first credit cards with an annual fees (AFs) so my twelve months of waived annual fees have ended. This means I have to decide what to do with these cards.

My three options are:

  1. Cancel the card and not pay the annual fee;
  2. Keep the card and pay the annual fee; or
  3. Keep the card, but product change the card to a no-AF version

Keeping a budget for the entire year has meant I budgeted enough money each month to be able to pay any annual fees (AF) once it came time to pay up. However, a year of use has helped me learn more about my spending habits, and how much I value each of the cards I have acquired.

So what am I doing with these cards?

The biggest reason I’m okay with signing up for credit cards is knowing I am building credit history, so I prioritize options 2 and 3 from above.

Now, I could cancel all of my cards and the accounts would continue to increase my Age of Credit History for 10 years until they fall off my credit report (10 years from now), but I’d rather keep them forever and have 30+ year old accounts. Plus, keeping as many accounts open helps me build a relationship with banks.

Product Changing

I wrote about flying to Hawaii using points from the United MileagePlus Explorer card and flying to the east coast to visit family using American Airlines miles from the Citi AAdvantage Platinum card last year. And I decided to product change these two cards instead of canceling or paying the AFs.

By product changing (PCing) these cards within 30 days of the AF posting, the $95 annual fees were refunded to my accounts. If the cards did not have fee-free versions, I would have canceled the cards and still been refunded the annual fees.

Canceling

Another card mentioned in the post about flying to Hawaii was the American Express Premier Rewards Gold card. I am still unsure of what to do with this card because it offers good category bonuses, but I’m not sure if I would benefit from earning Membership Reward points since I don’t spend enough to accumulate enough for a full trip. Fortunately, I have a couple more months to decide whether I will cancel the card or pay the AF.

A third card I used during my Hawaii trip was the Barclaycard ArrivalPlus. This card allowed me to redeem points to zero out the cost of the GoCity Card I bought to hit all the tourist attractions. These points are very flexible, but the ArrivalPlus requires a minimum of 10,000 points ($100) to redeem against a travel expense. I could have changed the card to the no-AF version, but I had too much trouble with the card so I ended up canceling it.

Keeping and Paying the Annual Fee

At the other end of the spectrum, I am planning to keep the Hyatt and IHG credit cards from Chase and pay the annual fees because I get a free 1-night stay from each card every anniversary. The Hyatt certificate restricts use to category 1-4 hotels. However, the IHG annual certificate has no restrictions on hotel categories, so I could spend the night in Times Square for the $49 annual fee on the card.

IHG PointBreaks Hotels: April – July 2017

InterContinental Hotels Group (IHG) offers select hotels every 3 months at a discounted rate for reward stays. These are called PointBreaks and stays can be booked for just 5,000 points/night. IHG released a preview of the list for April 24 – July 31 today which can be found here.

With the current sign-up bonus of 60,000 points for the credit card from Chase, someone could stay at a single PointBreaks hotel for 12 nights OR 12 hotels for 1 night each.

PointBreaks hotels typically won’t be for the fancy luxurious hotels that typically cost $400+. They are, however, more for a road-trip or a quick overnight visit to a nearby city.

This means the list isn’t going to include the InterContinental New York Times Square during New Year’s Eve, but it does include hotels like the Holiday Inn Express Karlsruhe City Park which runs for about $120 in July.

I’m still making my reservations for my upcoming Europe trip this summer so that Holiday Inn Express in Karlsruhe could be a nice overnight stop on my way through Germany.

Again, the list found above and here are only previews. Trying to book the Holiday In Exress for July before Monday will still show reward nights as 20,000 points/night. Starting April 24, the hotels listed will have a lowest possible price of 5,000 points/night.