If you have a credit card that charges an annual fee to keep it active, you might not be getting the most out of the subscription. You might have signed up for the higher-end card initially for the sign-on bonus, but now primarily use a different card, and aren’t getting the full benefit of the expensive card anymore. Regardless of the situation, it’s always a good idea to sit down, go over your cards, and find out which ones charge an annual fee and what benefits it brings. So, without further ado, here’s why you should downgrade your unused credit cards and where you should start.
Be sure to check all of your cards for annual fees
You might not even realize that a card you have will incur an annual fee. There was at least one of my cards that I didn’t realize had an annual fee, and I’ve since contacted my creditor about it because it’s not a card that I frequently use.
You can check whether or not your card has an annual fee by visiting the payment website of your issuer and viewing the documents for your card. However, something that might be simpler is to just give your issuer a call and ask them, or visit the sign-up page as if you were getting the card brand-new to see if it has one.
Often times, if you keep a close eye on your card and see an annual fee that you weren’t expecting, you can give your credit card company a call and inquire about the fee, asking them to remove it and downgrade you within the first month of seeing the charge.
Verify what the benefits are for the annual fees
Now that you know which of your cards have an annual fee, it’s time to see what the benefits are. Different credit card companies have the features of their cards in different places, but generally, either just call your card company or visit the sign-up page and see what all is included with your card. It’s also important to check this information out when signing up, but if you’ve forgotten, it’s pretty easy to find out.
This is where you have to make the decision yourself. Maybe you have a hotel credit card with a $99 annual fee, but you get a free night stay every year on your cardmember anniversary. Is that hotel stay worth more than $99? And, more importantly, would you use the stay? If the answer is yes, then keeping the card is likely worth it to you. But, if you rarely travel, or the benefits of the card really don’t outweigh the cost you pay, it might be time to either cancel it or downgrade to a lower tier that doesn’t include the free night, but still lets you earn points.
Contact your credit card and see about downgrading if you don’t use the card often
Once you’ve decided whether or not you want to keep the card with an annual fee, it’s time to contact the credit card company. Often times, the company will offer a lower-tiered card that has similar features, but without an annual fee. For instance, I have an American Express card that has a $99 annual fee to provide higher cashback, but it’s not something I frequently use right now, so I contacted them and asked to get the lower-tier card with no fee.
Now, instead of up to 6% cashback, I get up to 3%. But I’m not paying $99 per year to keep the card, which is saving much more than the cashback I’m losing. And the best part is I still keep the card open and can use it should I need to. You can even call your card company back at a later time and upgrade to the better card again in the future, should you be ready to take advantage of the features once more.
Looking for something else?
Now that you’ve found out which of your cards have an annual fee, and potentially downgraded some of them, it’s time to check out our other coverage. We’ve gone over the best credit card to rebuild your credit, and even found the cards you should look at if you have a student at home. Be sure to read through our credit card FAQ. We also lined up how to best utilize your cashback card, so be sure to take a look at that too.
Also, why not take a look at some cards to make a choice as to which you should sign up for. We’ve got a roundup of the best cards in every category, as well as some of our favorite 0% interest cards. Plus, we recently outlined the best cashback cards, if that’s something you’re into. For our comprehensive list of the best credit card deals around, check out our guide, which can be found here.
We’ve also previously gone over the best Amazon cashback cards to grab if you love shopping at the online retailer. However, if you prefer Target, we’ve also got a guide that helps you earn the most with purchases there, too.
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