Credit Cards

Here’s why I check credit cards in my wallet before the end of the year

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An annual credit card review is a great way to make sure your current credit cards are working for you.

Key points

  • Reviewing what cards you own and how you use your cards is beneficial.
  • You should review your spending and rewards earned to make sure your cards continue to work for you.

The end of the year is an excellent time to review important financial matters. You can take a look at the financial decisions you’ve made over the past 12 months, set new goals, and make sure you’re organized and ready for the new year. I also like to take this time to review the credit cards in my wallet, as the cards I have now may not fit into my plans for next year. You may want to consider implementing this practice yourself.

Check annual fees

Most of my rewards credit cards charge an annual fee. Since I’m paying to use them, I want to make sure I’m still getting value from each card. I also want to remind myself when my annual fee is due. Once I review my annual dues, I mark the dates on my calendar. That way, I won’t be surprised when I see my credit card statements.

If a credit card no longer offers value, I can decide to downgrade to a credit card with no annual fee. Before doing this, I transfer the points to another card or use the points; that way, none of my hard-earned rewards go to waste.

Analyze my expenses

I mostly use credit cards to make purchases because I don’t want to miss out on the opportunity to earn rewards. When I do my annual credit card review, I look at my spending and how I’ve used my cards. Not all credit cards earn the same rewards, and it may be better to use a card for certain transactions if it rewards at a higher rate.

When I review my credit card and analyze my spending, I have the opportunity to update my understanding of how each card earns rewards. If I’ve been using the wrong card for some purchases, I can make changes to maximize my rewards earning potential. It’s a good idea to evaluate your spending habits to make sure you’re using the right cards for the right purchases.

Check the advantages of each card

Credit card benefits may change over time. The benefits offered when you first opened the card may be out of date. Many card issuers continue to add benefits to their cards to provide more value. I like to review the benefits on each card each year to see if there have been any changes.

Doing this ensures that I am current on benefits and helps ensure that I am using my card to the best of my ability to maximize the value I receive. If you haven’t reviewed your card benefits recently, now is a good time to do so. You may be missing out on benefits.

Review earned rewards

I also use the end of the year as an opportunity to see the rewards I’ve earned with each card. If I haven’t redeemed my rewards, I outline a redemption plan. This ensures that I don’t miss out on the opportunity to put them to use when I need them most. If you let your credit card points accumulate without much thought, your rewards will be less valuable as you continue to pay annual fees to use your card.

As the last days of 2021 wind down, be sure to take a little time to go through the credit cards in your wallet. You may find that it’s best to say goodbye to cards you no longer use or review your card strategy.

When used responsibly, credit cards can be a valuable personal finance tool. You can earn rewards and conveniently pay for purchases in person and online. Just remember that it’s best to only charge what you can afford and pay your credit card balances in full each month to avoid high interest charges.

If you’re not earning rewards on your credit card spending, you’re missing out. If you want to apply for a new credit card in the new year, take a look at our top credit cards for inspiration.

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