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My pass/ fail criteria for whether to continue a card with Annual fee after sign up promotional year is over is very simple.
The incremental rewards from Annual fee credit card should atleast be equal to 133% annual fee. If I get $80 incremental rewards from a credit card for $75 AF, I would not continue it for a mere $5 per year benefit.
For example, Amex BCP gives additional 3% compared to BCE on groceries. I spend $500 on groceries so I get additional $15 per month over BCE out of which I pay $6.25 for AF. Still a net additional reward of over $100 per year. I will continue with BCP then.
@nishant1 wrote:My pass/ fail criteria for whether to continue a card with Annual fee after sign up promotional year is over is very simple.
The incremental rewards from Annual fee credit card should atleast be equal to 133% annual fee. If I get $80 incremental rewards from a credit card for $75 AF, I would not continue it for a mere $5 per year benefit.
For example, Amex BCP gives additional 3% compared to BCE on groceries. I spend $500 on groceries so I get additional $15 per month over BCE out of which I pay $6.25 for AF. Still a net additional reward of over $100 per year. I will continue with BCP then.
Interesting! How did you arrive at that?
I can see such a rule about APPLYING for new cards, where there is a time factor, plus any concerns about HPs impacting future credit. A renewal though usually takes no effort, less than cancelling the card, and certainly has the same or less impact on score. So I guess my rule would be two parts:
1) Are benefits > AF?
2) Is this the best use of the money that makes up the AF
1.33 seems a high factor to me!
I do not think to hard on AF; too stingy, this is how I justify AF.
I spend money on a lot of stupid things on a weekly or monthly basis therefore AF is justified.
@BearOSO wrote:I do not think to hard on AF; too stingy, this is how I justify AF.
I spend money on a lot of stupid things on a weekly or monthly basis therefore AF is justified.
Great!
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@bs6054 wrote:
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For me, this is a deal breaker.
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