In 2024 we paid a pretty hefty sum in credit card annual fees. When we first started maximizing our points and miles, I was very hesitant to spend money on annual fees – the whole point of this was to save money, right?? As time has gone on, we’ve come to find that between the points from sign-up bonuses and the perks and credits that many higher annual fee credit cards have, the juice on this is worth the squeeze to us. I used to drive myself insane by calculating the exact value of all of our points and credits to make sure I knew exactly how much value I was squeezing out of each card. I have stopped the insanity and have instead focused more broadly on the overall net positive value we have gotten. Here are some of the strategies and tips we have picked up along the way to make this game work well for us, and make sure we are not throwing away money with those annual fees. 

Sign Up Bonus = Best Net Positive Value 
Since starting this hobby, we’ve opened over 40 credit cards with fees up to $695, and we have never had a negative value in the first year because of the sign up bonuses. That $695 fee went with an Amex Business Platinum card, which came with 200,000 Membership Rewards after meeting the spend. Melissa just used 165,000 of those points to book three business class tickets to Europe, which would have cost $7500. Even if you argued that the best coach ticket price for these tickets would have only been something like $2000, we are still ahead of that $695 fee. 

But Do We Keep These Cards Forever?
We are not committed to keeping any card after the first year. When we decide to downgrade or close a card, we just make sure to wait until the second year’s annual fee is charged. We then message or call to cancel or downgrade the card to a lower or no annual fee card, and the fee gets reimbursed. You should always make sure to keep any card at least one full year and cancel after the annual fee comes back around. After we get a card I track the welcome bonus spending and credits available on Award Wallet. I have found the free version of this app to be so valuable to track when fees will be charged and all of the credits that are available as it will send notifications when things are coming due or credits are expiring.

In 2024, we closed eight cards. It didn’t make sense to keep them when we weighed paying another year’s annual fee against what we would get from the perks of those particular cards. As you play this game longer, you’ll find that a bonus can be had again on a given card, but with some of the banks, you need to not have that particular card open. For example, we got a companion pass mostly by opening Southwest credit cards in 2024 for the rest of 2024 and 2025. Since you can get a Southwest bonus 24 months after the last one you got on that card, I plan to close both of my Southwest cards this year to be ready to try for the Companion Pass again in 2026. 

Retention Offers
If you are thinking of closing or downgrading a card but are on the fence, it can make sense to ask the credit card company to reduce your fee or give you some bonus points for keeping the card.  Ask Sebby has a great guide and script to use to ask for a retention offer, and often you can do it simply through sending a message. For instance, I was able to get a 15K Amex point offer on my Gold card after $1000 of spending this past year. This only took about 10 minutes. On the other hand, I closed a Citi card the other day where I was on hold for 90 minutes. I was asked if I wanted to be connected to a retention specialist, and I said no because I just needed to be done and really didn’t want the card anymore.

Strategy for Maximizing Credits
We opened the Amex Business Platinum in June of 2024. This card has a semi-annual credit for $200 off at Dell.com for the first and second half of the calendar year. We opened this card in June, and this year’s 2nd annual fee will hit at the end of July. We took advantage of that credit as it was expiring at the end of June, then again by December 30. We will do it again by this June 30th, and then quickly one more time in July. That’s taking advantage of that credit four times with the one fee paid to maximize the return. We likely will not keep this card and will ask to close it after we have used that last credit and the annual fee gets charged.  December can be a great time to open a card with annual credits. You can often get annual credits three times with one annual fee. For instance, the Platinum has a $200 annual airline incidental credit that you could end up taking advantage of three times on one annual fee if you use the credit in December then in the following year, and then again the next January before canceling and getting the fee refunded. 

Upgrade and Downgrade Cards. 
Often you are able to downgrade a credit card with a fee to a no-fee card after a year. If you keep the account open, some banks easily let you change that card into a different product with a prorated fee and no restrictions on keeping the card for a full year. Chase and Amex require you to stay within the same card family but you can upgrade or downgrade within that family. Here are two examples of how I used this rule to our advantage – one with Amex and one with Chase.

In late 2023 we renewed Melissa’s Bonvoy Brilliant with its $650 annual fee in November to get Bonvoy Platinum status and an 85K Bonvoy certificate. This card comes with a $25 dollar monthly dining credit that I used in Nov, Dec, and Jan. I decided that I didn’t want to deal with this credit and in January I called Amex to downgrade the card to the Amex Bonvoy card that has a much lower fee at $95 dollars a year. They were able to switch to the cheaper card via chat I was refunded a pro rated fee of $541 dollars and charged a prorated $71 for the new card. Melissa still retained the 85K certificate and the platinum status for the rest of the year. I did not but could have upgraded the card again in October for a prorated fee, to get the 85K certificate and platinum status for 2025 and play this game all over again.

We also keep the Sapphire Reserve in our household for the lounge access, travel insurance, and the 1.5x in the travel portal. With paying for an authorized user, the fee is $625. The Sapphire Reserve has a $300 travel credit that straight up reimburses the first $300 of travel charges you put on the card. When the fee posts to our Sapphire Card we use that credit immediately. This past year we payed  part of an Air B&B that we had already reserved. After the $300 credit was posted I  downgraded my Sapphire card to a Freedom card with no fee. I got a full refund of $625. I waited a few weeks after the statement closed  and then upgraded a different Freedom card to the Sapphire Preferred. Since this was a different account, I got a new $300 travel credit to use. This makes my net fee for the Sapphire Reserve $25. Presumably, this can be repeated each year between the two Freedom cards in our household.

These are the main strategies I have used to get the most out of annual fees and not sweat every little thing. I’m not going to pretend there’s not a lot of detail to keep track of here – but the best part of playing around with points and miles is you can do as much or as little as you want!