The miles & points hobby has evolved a lot over the years, both for better and worse. Obviously nowadays the credit card space is an integral part of the miles & points world, since it’s one of the best ways to earn rewards. With that in mind, I can’t help but reflect on a general trend I’m seeing and feeling, as the credit card space continues to evolve.
As cards get more complicated, the fatigue is real
In recent years, we’ve seen the popularity of premium credit cards increase massively, probably coinciding with the generally strong demand for “premium leisure” travel. With that demand, we’ve seen card issuers do a lot to evolve their product offerings. We often see very lucrative cards introduced, and then over time, some changes are made, to optimize profitability.
The trend is pretty consistent — card annual fees increase, but also add perks to cards, which in theory, can significantly outweigh the annual fee. These perks are often with companies that the card issuers have partnerships with, or the perks are designed in ways where the card issuer can further monetize cardmembers (like booking hotels through a portal). Many of the perks are also designed for there to be some breakage, with benefits only valid monthly, quarterly, semi-annually, etc.
Generally, my decision on whether to keep a card in the long run depends on whether the value I can get from a card outweighs the annual fee. Sure, it might require jumping through some hoops, but I’m typically happy to do it, with perks like lounge access being the icing on the cake.
But as time goes on, I’m finding myself paying more and more in annual fees, all while having a longer and longer list of tasks I need to complete for the cards to actually make sense for me, in terms of coming out ahead.
From redeeming free night awards before they expire, to using monthly dining and rideshare credits, to remembering to put five transactions per billing cycle on a card, there’s a lot to keep track of (this is just the tip of the iceberg). I’m sure if I put my yearly credit card “task” list on paper, there would be hundreds of tasks I need to complete.
Admittedly I have more credit cards than the average person, so this is very much a problem for those who are specifically points hobbyists, rather than the average consumer.
But it all makes me wonder… is this complicated strategy worth it, or are many of us better off just greatly simplifying things, and not having to worry about these benefits? With effort I can make these individual annual fees worth it, but more fundamentally, what am I accomplishing by doing that?
I’m coming out ahead by a few bucks, or maybe I get access to a particular lounge I wouldn’t otherwise get access to. But is that worth the effort, the mental bandwidth it takes up, and the upfront cost of annual fees?
This all came to my mind yesterday when I realized that I’ve totally forgotten to use the $25 monthly dining credit on one of my cards for the past three months, because I forgot I had that card, for a moment. I’m not much of a list person, so clearly I just didn’t have the mental bandwidth to remember that anymore. That’s at least partly because of the number of other perks I have to keep track of.
Trying to recoup credit card annual fees with all the published benefits sometimes feels like a part-time job in and of itself.
Maybe a simple card strategy is the way to go?
Look, I’m not advocating for giving up on credit cards completely (I know, you’ll be shocked to hear that). 😉 I still get tons of value from them overall, and while the best ways to redeem points have evolved, there are still lots of great opportunities. However, I am increasingly thinking that cards with marginal value or with a lot of effort required might not be worth holding onto just for those perks.
I think there’s huge value to cards that otherwise get you lots of value, in terms of the return on spending, or cards that have benefits that are really easy to use. But I can’t help but think that I’m not alone in feeling this fatigue from having so many cards, and wondering if it’s really all worth it.
Honestly, people having a simpler stranger might be a win for all parties involved. After all, card issuers generally want you to actually use your card for spending, rather than just keeping it for the perks. So I haven’t made any decisions yet for my own strategy, though I’m curious to hear how others feel, and if others are simplifying their card strategy because of the increasing hurdles required to make the math on cards work.
Bottom line
Over time, we’re seeing credit card annual fees increase, as card issuers add more perks, but they often require jumping through some hoops. If you’re willing to put in the effort and you’re a certain type of consumer, I tend to think that it’s easy enough to make the math on cards work.
However, I can’t help but wonder how others are feeling, in terms of the increasing hurdles to jump through to maximize rewards.
Where do you stand on the concept of credit card fatigue?
Membership is free and takes no more information than commenting as a guest. Earn status points for good contributions, and see fewer ads as your status grows.