I used to be more concerned with credit card points than benefits, tracking bonus categories and carefully optimizing spending to earn as many points as possible with each purchase. But rewards are no longer the primary factor I consider when choosing a credit card. Now, I focus more on perks with predictable value.
Points still have a place in my credit card strategy, especially for travel. But there’s a trade-off: I have to spend money to earn rewards, and points can lose value over time as reward programs devalue. Benefits work differently, and some don’t require spending to unlock their value.
“For many consumers, the definition of value is shifting,” says Len Covello, chief technology officer of Engage People. “While points and cash back are still important, perks can deliver more immediate and tangible benefits, especially as expectations around flexibility and real-time value continue to rise.”
[Read: Best Credit Cards]
My Most Valuable Benefits
Some of the most valuable benefits I get from my credit cards have nothing to do with points. For example, the lounge access I get with my American Express Platinum Card® is one of the most consistently valuable card benefits I use. I save money every time I fly, taking a break in a quiet space with high-speed Wi-Fi rather than paying for meals and waiting at the gate.
With my United? Business Card, I get benefits when I fly United, including two United Club passes annually, a free first checked bag for me and a traveling companion, and priority boarding for both myself and companions on the same reservation.
Another benefit I frequently use while traveling is automatic elite status with hotel and rental car companies. My American Express Platinum Card® gives me Gold status with Hilton Honors and Marriott Bonvoy, which has scored me free room upgrades with both brands and a daily food and beverage credit with Hilton Honors.
I also have National Rental Car Emerald Club Executive status with my AmEx Platinum, which gets me a discount on rental car rates and allows me to bypass the counter at most airports to choose any car from the Emerald Aisle. And with its rental car coverage, I can confidently decline paying for the rental car company’s insurance.
There are also benefits that don’t stand out until you need them, such as trip cancellation and interruption coverage, trip delay, extended warranty and purchase protection. I used the trip delay coverage on my Chase Sapphire Reserve® to get fully reimbursed for a few hours of sleep in a small, private room at Minute Suites when I had a 9 p.m. flight delayed until 2 a.m.
I don’t have to work for any of this value. I’m not tracking categories or transferring points, just using benefits that fit into my lifestyle.
[Read: Travel Credit Cards]
Premium Cards Aren’t Always Best for Everyday Spending
I frequently use my premium cards for benefits but less so for everyday spending. Premium cards tend to deliver most of their value from perks rather than rewards. However, there are exceptions, such as my Hilton Honors American Express Surpass® Card, which earns six points per dollar at U.S. restaurants, U.S. supermarkets and U.S. gas stations. But it’s rare that I use my American Express Platinum Card® for anything other than benefit-related purchases or flights booked directly with airlines or on AmexTravel.com, which earn five points per dollar.
Instead, I use my premium cards where they shine: booking travel, using statement credits and activating benefits. For everything else, I reach for cards that earn more.
“In many cases, a ‘perks’ card may be good for travel but less attractive for daily spending,” says Laura Sterling, vice president of marketing at Georgia’s Own Credit Union. “You might come out better using your perks card for travel and other key purchases, then use a straight cash back card for everyday spending.”
This split approach helps me earn strong rewards on everyday purchases without depending on those earnings to justify an annual fee. The perks do enough to make the annual fees worth it.
How I Evaluate a Card’s Value
I only keep cards that offer more than enough value to offset the annual fee each year. For premium cards, that means calculating the value of perks I realistically use. That forces me to look beyond the marketing and list of benefits to consider whether a card’s benefits save me money on purchases I would have made either way.
For example, I get up to $300 in Equinox statement credits annually with my American Express Platinum Card®, but I don’t want an Equinox subscription. Likewise, I don’t find value in up to $200 in Oura Ring statement credits each year. If I have to change my spending habits to justify a benefit, it doesn’t add real value.
I assign realistic dollar values to the perks I use, which makes it easy to cut through marketing claims. On my American Express Platinum Card®, I know I’ll offset the $895 annual fee cost just with the $300 digital entertainment credit, $400 annual Resy credit and $300 annual Lululemon credit. Those are everyday expenses for streaming, dining and clothes I would have spent money on anyway. Any benefits I use on top of those offer additional savings.
Every year, when a card’s annual fee posts to my statement, I calculate whether I’ve used enough of the card’s value to justify its cost. I do it annually because my spending habits and travel patterns change, and a card doesn’t always make sense from one year to the next.
“Cardholders should evaluate premium cards through a real usage lens, not theoretical perks,” says Covello. “That means assigning actual value to benefits they will realistically use, such as travel credits, lounge access, insurance protections and boosted earn categories, and comparing that to the annual fee.”
[Read: Rewards Credit Cards]
Managing Multiple Benefits Cards
Using multiple credit cards can get complicated. I’ve experimented with benefits tracking apps, including MaxRewards and UseYourCredits, but I keep things simple with a spreadsheet. I note all of my available benefits and how often they reset, then update as I use them. I check the sheet toward the end of each month to make sure I’m not missing out on any monthly, quarterly or annual benefits.
I limit how many cards I keep active, and I’m ruthless about cutting cards that don’t offer enough value to justify the annual fee. Sometimes, that happens when I have cards with overlapping benefits.
For example, I recently downgraded my Chase Sapphire Reserve® to a Chase Freedom Unlimited® when I realized I had most of my Chase Sapphire Reserve® card’s high-value benefits — such as expedited security, luxury hotel credits and dining credits — covered by other cards.
“If the perks you use outweigh the annual fee (or at least get you close) and clearly match how you already spend and live, then the card is justified,” says Covello. “But if the benefits aren’t being used or don’t align with spending behavior and lifestyle, the value falls away quickly.”
More from U.S. News
Premium JetBlue Credit Card Announces Companion Pass — With No Increase in Annual Fee
Citi ThankYou® Rewards: Transfer Partners Guide
Forget About Credit Card Points. Here’s Why I Focus on Perks Instead originally appeared on usnews.com