I’m suffering from a case of cardholder’s remorse, much like a homebuyer might suffer from buyer’s remorse.
Back in 2015, I jumped at an offer in the mail to sign up for a travel rewards card with a healthy credit limit and a generous sign-up bonus. (To protect the not-so-innocent, I won’t mention the names of this card or the other travel rewards card I now have.)
Sadly, the card I got two years ago came in handy when I had to charge my mom’s funeral expenses. To this day, it’s still bizarre to think that I earned miles that way.
Thanks to that card, I’ve now amassed over 200,000 airline miles. I’ve yet to take advantage of those miles; earlier this year, I ended up canceling a trip for which I’d applied many of those miles toward a business-class ticket to Japan.
That card isn’t the only travel rewards card I have in my wallet. After I’d been making use of the airline miles card for a while, I received an offer to sign up for another card oriented toward travel rewards. Again, this card had a great credit limit and an attractive sign-up bonus, so I decided to add this card to my collection.
But as with the first card, I’ve failed to capitalize on the travel rewards – airline tickets, hotel bookings and the like – provided by the second card. I had made some hotel reservations with points from this card, but those were for the same trip to Japan that I’d canceled. Now, I’ve got a pile of points (about 75,000) that have gone untapped.
All of this brings me to the cardholder’s remorse that I’m feeling. If I’m not going to fully profit from the rewards and perks from these cards, why did I get them in the first place? There’s no great answer, other than both offers originally sounded pretty enticing.
That question has led me to another: Should I switch to cash back cards and cancel the rewards cards? This dilemma nags me a lot these days. Today, I think I’d be happier and better off if I had cash back rather than travel rewards.
A 2013 CreditCards.com column, “Cash back or miles? Ask yourself these questions first,” poses the questions I should have asked myself before getting the two travel rewards cards. Following those questions are my answers:
1. How often do you travel and what are your plans for traveling in the future?
I travel a fair amount, but I’m not a globetrotter by any means. And my travel plans, at least at this point, are limited.
2. Are the annual fee and APR in line with the rewards you’re receiving?
Unfortunately, I’d have to say they aren’t. Airport lounge access, free checked bags, and other perks are nice, but I don’t travel enough to make them worth the annual fees ($95 for one, $550 for the other) and APRs (16.99 percent and 18.99 percent).
3. How much of a balance do you carry?
Let’s just say that right now, it’s too much for my liking. For a good amount of time, I’d been diligent about paying off the balances on both cards every month. But after being laid off from a full-time job in April and returning to freelancing, I’ve now got balances on both cards, although – like all good boys and girls should – I am paying well over the minimum amount due every month.
4. How much do you spend on your card?
With both cards, I’ve managed to make good use of them, thus the higher-than-I’d-like balances. We’ll leave it at that.
5. What’s more important in your life right now: cash flow or travel?
No contest here: cash. When you’re freelancing, cash is king or queen or whatever royalty you want to pick.
Since rethinking my two rewards cards, I’ve tried to use my one cash back card more often, although the credit limit on that isn’t nearly as high as it is for the rewards cards. Now, I’m wondering whether I should exchange the rewards cards for cash back cards.
At this point, I’m going to stay put, as there’s a condo purchase looming in my future. I don’t want to ditch the two rewards cards, sign up for two cash back cards, and then harm my overall length of credit history and ding my credit report with new credit inquiries. Length of credit history and new credit inquiries are two factors that affect your credit score.
In hindsight, I wish I’d given more thought to signing up for the two rewards cards. Right now, I’d rather have the cash back.
So, let this serve as a lesson to you: Don’t immediately pounce on an offer for a travel rewards card.
Instead, think carefully about how rewarding that type of card will be compared with a cash back card or another kind of card. Your wallet and your conscience will thank you for it.
See related: Travel rewards versus cash back: Do you really want to be practical? Choose your rewards strategy: One card? Or multiple cards? 4 dangers of a rewards credit card