Are these popular credit cards worth keeping past Year 1?

Credit card issuers have ways to get you in the door, including big sign-up bonuses. Their hope: You’ll apply for a card you otherwise wouldn’t consider — and won’t get around to cancelling it after the glow of the bonus wears off.

Perhaps you have an impulse-application card in your wallet right now. Here’s a run-down of popular cards that have offered boosted sign-up bonuses in the past year – and whether they’re worth keeping. We also are including some suggestions for downgrades – which would allow you to switch to another (lower-cost) product from the same issuer while keeping the credit line. There’s no guarantee the bank will allow you to downgrade to your product of choice, but we want you to know your options.

1. Chase Sapphire Reserve

This was the card of 2016. A 100k-point sign-up bonus brought in droves of applicants, despite the fact that the $450 annual fee was not waived the first year. That bonus has since been cut in half and, even if you got it, you may have already cashed it in.

Keep it if you:

  • Dine out and travel a LOT: The card’s uncapped 3X on dining and travel (an extra point per dollar over its sister product, the Chase Sapphire Preferred) is beneficial only if you spend a lot in those categories.
  • You’ll use every cent of the $300 annual travel credit: This travel credit is automatic and flexible (it even includes rideshare rides).
  • Plan to redeem for travel: Your best redemption value comes with transferring to Chase’s partner frequent flier and hotel loyalty programs. But redeeming for flights, hotels, cruises and more via Chase’s travel portal gets you a decent value as well (thanks to the 50 percent value boost).

Cancel it if you:

  • Want to redeem for cash back: This isn’t the card for that – and you’re in for an uphill climb if you want to recoup the $450 annual fee in redeemed rewards. Even after accounting for the $300 travel credit, you’d have to spend $15,000 on the card to make up the last $150, if you redeem for cash back.

Downgrade options:

  • Chase Sapphire Preferred: This card comes with a more manageable annual fee of $95 and some of the same bells and whistles the Reserve has, most notably the ability to transfer into partner travel programs.

  • Chase Freedom Unlimited: If cash back is your thing, this card gives you 1.5 percent back on everything (with no annual fee).

2. Platinum Card from American Express (a CreditCardForum advertising partner)

This card also offered a 100k bonus recently (and it also recently expired). It’s long been considered a premium card for luxury travel perks, and the 100k bonus may have brought some into the fold who can’t maximize those.

Keep it if you:

  • Will use the luxury benefits: This card’s lounge access is arguably the most robust among credit cards. If you don’t travel much, you’re paying $450 for a card that, historically, hasn’t been a rewards-earning powerhouse.

    The card also offers Hilton HHonors Gold status and hotel credits at luxury properties.

    Suffice it to say, it’s not built for casual travelers.


Cancel it if you:

  • Won’t maximize the rewards, perks: This card doesn’t exactly have many bonus categories, so earning rewards will be a gradual process. If you fail to maximize them (by using American Express’s transfer partners) and just redeem for cash back, you’re likely better off with a less expensive card. Same goes for the $200 airline-fee credit, which gives you statement credits toward incidentals like bag-check fees and in-flight food. You have to pick an airline in advance for this perk, so it’s aimed more at business travelers who can select an airline they fly frequently.

Downgrade options:

  • American Express EveryDay/EveryDay Preferred: Luckily there are other members of the Membership Rewards family. The Everyday and EveryDay Preferred cards (no annual fee and $95 annual fee, respectively) earn the same currency the Platinum does – Membership Rewards points – for a much lower cost.
  • Premier Rewards Gold: This card’s $195 annual fee isn’t exactly low. But if you still want some travel perks, this may strike a better balance than the Platinum does. You have much more generous bonus categories and still get a $100 airline-incidentals credit each year, as well as hotel credits at luxury partner properties.

3. Marriott Rewards Premier Credit Card

This card upped its sign-up bonus this past year to 80,000 – higher than the historically standard 50k offer.

Keep it if you:

  • Will use the free night: You get a free night at a Category 1-5 property each year. That alone can make it worth paying $85 a year for the card.
  • Can take advantage of Marriott’s merger with Starwood: This merger opens up a lot more properties to you. In fact, as these two chains’ portfolios become one, the Marriott card could be the most flexible hotel card on the market in terms of sheer redemption options worldwide.

Cancel it if you:

  • Don’t have any big travel plans coming up: Sign-up bonuses on hotel cards are very attractive to honeymoon and bucket-list travelers – those who are planning “one big trip” and plan to use the sign-up bonus to fund a stay at a luxury property they’d never otherwise book. If you don’t have frequent travel plans going forward, this card’s usefulness is debatable (especially if you wouldn’t use the annual free night).


Downgrade options:

In general, banks won’t allow you to product-change from a card to another in a totally different rewards family. And, since the Marriott Rewards Premier card doesn’t have a “family” of cards, you may have to just cancel. But, first, call Chase and see if it will switch you to one of its other cards. It can’t hurt to ask.

4. American Express Blue Cash Preferred

This card sometimes offers boosted sign-up bonuses and an industry-leading 6 percent cash back on groceries (for up to $6,000 in purchases per year). It also offered Amazon as a temporary bonus category for part of 2016. Those things combined might have convinced some to try it out, despite the $95 (raised in 2016 from $75) annual fee.

Keep it if you:

  • Max out (or nearly max out the grocery category): Using the card for $600 in groceries gets you $360 in cash back ($265 after taking into account the annual fee). And don’t forget, you also get an unlimited 3 percent back at gas stations and department stores.

Cancel it if you:

  • You can’t concentrate your bonus-category spending on this card: $6,000 in groceries a year boils down to about $115 a week. Maybe you have multiple cards or are trying to earn a sign-up bonus on another card. Maybe the kids grew up and moved out, slashing your grocery bills. If you aren’t earning enough rewards to justify the annual fee, the Blue Cash Preferred may not be for you.

Downgrade options:

  • Blue Cash Everyday: Luckily, there’s a no-annual-fee version of this card. The Everyday card offers a still-competitive 3 percent back on groceries (on up to $6,000 in spending per year) and 2 percent back at gas stations and department stores. With no annual fee to worry about, it may fit your lifestyle better if you’re not filling up a cart of groceries each week.

5. Citi Prestige

This $450-annual-fee card upped its sign-up bonus in 2016 to 50k points. It’s since returned to its usual level of 40,000 points. The Prestige is not as well known as other luxury cards (like the Chase Sapphire Reserve and the American Express Platinum), but it has some unique perks that can save you money on travel.

Keep it if you:

  • Are using the high-value perks: These would be the $250 annual air-travel credit (which includes airfares) and the fourth-night-free hotel benefit. The latter gives you the fourth night free on hotel stays of four consecutive nights when you book via Citi’s travel service. This card also offers lounge access and Global Entry Reimbursement.

Cancel it if you:

  • Don’t want to put work into maximizing your points: Citi’s ThankYou program (of which the Prestige is part) is a little more complex than other rewards programs. If you know the ins and outs, your points fetch good value. If you want to go for the simplest options, expect poor value. The ThankYou program gives you a value boost when you redeem via the travel portal and especially when you redeem for American Airlines fares. You can also get a high redemption value when transferring directly to Citi’s airline partners (mostly international carriers).

    The value for statement credits and cash back, however, is among the lowest in the card-rewards business.

Downgrade options:

  • Citi ThankYou Premier ($95 annual fee) or Preferred (no annual fee) cards: If you like the ThankYou rewards program, these two cards are also in the family. Note that the no-annual-fee Preferred comes with significantly fewer perks. You won’t have access to all of Citi’s airline transfer partners, for example.
  • Citi Double Cash: This card rewards 1 percent cash back when you make a purchase and another 1 percent when you pay it off. Assuming you pay your card off, that’s one of the highest rates of cash back on all purchases. It’s also a low-maintenance card because you don’t have to worry about a slew of redemption options.
 
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