You don’t have to use the same credit card forever. Getting a new credit card can give you access to better rewards programs and perks. However, you might also be stuck with a card that is hard to justify.
One consumer in the Credit Cards subreddit believes that their AMEX Gold Car is no longer worth the annual fee. The Redditor eventually canceled their card and explained their reasons for doing so. A bunch of people jumped in the comments to share their thoughts as well.
Key Points
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An AMEX gold cardholder recently canceled their card and questioned its worth.
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Other cardholders explained the pitfalls of a card with annual fees and how it can hurt your finances.
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The Coupon Book Isn’t Worth It
An AMEX Gold Card comes with several discounts for popular brands and services. However, it can take a while to dig through the coupon book and ensure that you’re capitalizing on every possible deal.
Some people say that it’s not worth the effort to find and use coupons. You also have to use enough coupons to justify the annual AMEX membership fee. Some Redditors said that if money isn’t an issue, then it doesn’t make sense to dig through AMEX discounts and go through that complexity.
Furthermore, most items are marked up if you apply the coupon. Multiple commenters stated that Uber and other companies bump their fees if you use the discounts that your AMEX card provides. These comments make it seem like consumers pay full price while thinking they have received a discount.
You May Spend More Than Necessary To Justify The Annual Fee
Most credit cards with annual fees have better perks and rewards than credit cards that don’t have annual fees. You may find more spending categories that offer 4x and 5x rewards on every purchase.
While this reward structure can be good for big spenders, this same reward model incentivizes people to spend more money than necessary. You typically have to spend a lot of money to break even with a credit card that charges a high annual fee. If you’re being financially responsible and minimizing your expenses, these cards may turn into net losses after considering the annual fee.
However, the losses can compound quickly if you do not pay off your credit card at the end of each month. Then, the interest grows at a rate that is much faster than the amount of rewards that you can accumulate in your account.
No-Fee Credit Cards Offer Instant Savings
Switching to a no-fee credit card will result in instant savings. You won’t have to contend with an annual credit card fee, and you only have to pay interest and late payment fees if you fall behind. However, if you pay off your entire credit card in full at the end of each month, you essentially get a credit card and all of its perks for free.
You can make it even simpler by using a no-fee cashback credit card. Receiving cash instead of points always makes it clear how much you will receive. In other words, you don’t have to worry about how points convert into dollars based on how you use them.
It’s good to compare several credit cards and rewards programs before choosing a replacement. However, most people do not need a credit card that has an annual fee. There are plenty of credit cards that allow you to get the job done without an annual fee.
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