Getting a credit card often feels like a financial upgrade-one that offers you a greater deal of flexibility, more perks, and more convenience. This comes at a price, however, and this typically takes on the form of an annual fee.
Whether it's below PHP 1,000 or more than PHP 5,000, that amount can feel like a burden, especially if you're unsure what you're getting in return. So how do you know if your credit card is truly worth its annual fee?
Before you consider canceling your card or letting the fee slide without thinking, take a closer look at the value it brings to your lifestyle. Here are seven key things to consider:
1) What Benefits Are You Actually Using?
Credit cards often come with a long list of benefits such as cashback, rewards points, travel perks, insurance coverage, and shopping discounts. But all of that only matters if you're actually using them. Are you earning enough cashback or points every month? Do you use the card's travel insurance, purchase protection, or airport lounge access? If you're not taking advantage of these perks, then you're essentially paying for features that don't benefit you.
To determine if you're using credit card perks that make the annual fee worth it, list the benefits you've used in the past 12 months and estimate their value. If they add up to more than the annual fee, the card may be worth keeping. If not, consider going for a no annual fee credit card or one that offers more perks that are actually aligned with your needs.
2) Does the Card Match Your Spending Habits?
Credit cards are designed with specific types of spenders in mind. Some are best for travelers, while others are best for grocery shoppers, online shoppers, or foodies. If your card rewards purchases you rarely make, the annual fee might not be justified. On the flip side, if you regularly spend in the card's top categories and earn high cashback or rewards points in return, the annual fee can easily pay for itself.
3) Are You Meeting Minimum Spend Requirements for Perks?
Some credit cards only unlock their best rewards or perks once you hit a certain spending threshold. This can include cashback rebates, bonus points, or even annual fee waivers. Does your card have the same feature? If yes, ask yourself: Are you spending enough to qualify for these rewards?
If you're falling short, you may be missing out on the full value of the card. And if you're stretching your budget just to reach the minimum spend, the card might be doing more harm than good. Your card's requirements should match your natural spending habits, not pressure you into spending more than you're comfortable with.
4) Did You Get a Welcome Bonus?
Many credit cards offer enticing welcome bonuses like large point offers, cashback, or vouchers. These can easily outweigh the first year's annual fee and make the card look like a great deal. Keep in mind, though, that these are usually one-time benefits. After the first year, the annual fee kicks in without the bonus, so the real question is whether the card remains valuable after the honeymoon phase ends.
5) Can You Get the Annual Fee Waived?
Some credit cards waive the annual fee for the first year, and some waive it permanently if you meet certain criteria, like a minimum annual spend. Others may rebate it as points or convert it to store credit or vouchers. If your card offers these options, it may be worth keeping, especially if you were already planning to spend that amount anyway.
Still, it never hurts to call your bank and ask if the fee can be waived or negotiated. You might be surprised how flexible they can be, especially if you've been a responsible user.
6) Are There No-Fee Cards That Offer Similar Perks?
Before committing to an annual fee, look around. Some no-annual-fee credit cards offer decent cashback, basic rewards, and practical features that may be good enough for your needs. If you're not using premium travel perks or high-level rewards, a no-fee card might actually offer better value. That said, always compare your current card with others in the market to see if there's a similar one that charges less or nothing at all.
7) What's the Overall Value You're Getting?
Sometimes it's not about the cashback or points, but the overall convenience and security a card provides. For example, being able to monitor your transactions in real time, freeze or unfreeze your card through an app, or get immediate alerts for suspicious activity can offer peace of mind that's hard to put a price on. If your card helps you stay on top of your finances and gives you reliable customer service when needed, it might be worth keeping-even if it comes with an annual fee.
Not all credit cards are created equal, and not every fee is worth paying. The key is to evaluate whether your card is working for you or if you're working to keep it. When it comes to annual fees, that clarity can save you more than just money; it can help you make better financial choices in the long run. Keep these factors in mind whenever you're due to renew your credit card or sign up for a new program, like that of the Landers Cashback Everywhere Credit Card by Maya.
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