5 types of credit cards you probably shouldn’t have

We often cover which credit cards to get, when cards have the best bonuses, how to maximize various card benefits, and more.

And it’s for good reason. Rewards credit cards can unlock the ability to travel more for less.

I should know: I currently have 25 open card accountsand each one serves a purpose in my wallet and helps my family travel in ways that wouldn’t otherwise be possible.

But credit cards, especially those with annual fees, can also quietly drain your budget if you don’t maximize their benefits.

So today, instead of talking about which card to get next, let’s talk about some cards you may not need.

A card doesn’t have to be “bad” to be worth canceling, or at least downgrading (read on for more details on this). In fact, some of the worst credit card values ​​come from cards that once made a lot of sense for your wallet but no longer fit your spending or travel habits.

That’s why it’s worth doing a regular audit of your wallet to make sure the cards you’re paying for still match what you actually spend and travel. With that in mind, here are five credit cards you probably shouldn’t have.

An airline card that offers access to lounges that you are not using

Premium airline cards often come with annual fees upwards of $500, and for frequent travelers, that can be worth it. I have a United Club Card℠ (see rates and fees), for example, and I can justify the cost even with their $695 annual fee.

but it is only It’s worth it to me because I fly a lot on United Airlines and use the United Club benefit, which is a portion of the annual fee. Extra miles, elite qualification benefits, and a head start help too, but access to the lounge This is usually what drives the cost of premium airline cards.

If you’re paying a hefty annual fee for lounge access on an airline you rarely use, it may be time to reconsider whether that card is still right for you. It is also possible that a Widest network of salonsthat is not tied to any particular airline, might work better for you.

That doesn’t mean you should give up airline cards entirely. Most major airlines offer cards with multiple tiers of annual fees, and lower-fee options can still provide perks like free checked bags, priority boarding, and better award prices without requiring a massive annual fee.

If you need help reviewing the options, here are several credit card options within these top airlines:

Premium rewards card with lots of credits you’re not using

In recent years, several premium rewards cards have become… more complicated.

For some people, premium cards have started to seem more like coupon books than travel rewards cards.

To be fair, you can still get by with premium cards loaded with credits for hotels, restaurants, shopping, and entertainment. I happily play that game.

But if you’re paying more than $800 a year for a card that has more than $1,500 in annual credits and you’re using almost none of them, then one of three things should be true.

• The annual fee doesn’t really matter much for your budget.
• You need to start maximizing more of the card’s benefits to make it worth it.
• You’d probably be better off with a simpler card that better suits your habits.

If using multiple perks for shopping and dining seems more tiring than rewarding, and the card’s other perks (like lounge access) don’t make up for more than the annual fee, then I promise it’s actually okay to say goodbye to a premium credit card with a fancy name if it’s no longer working for you.

You can always decide to come back to it later if you change your mind. (Although the welcome bonus may be a one-time event.)

Related: 7 cards that can replace your Amex Platinum

You have two cards with really similar features

Sometimes having multiple cards with overlapping benefits makes a lot of sense. But in other cases, you may simply be paying multiple annual fees for benefits that largely duplicate each other.

Unless there’s a specific strategy behind it, keeping multiple cards with nearly identical advantages is often not worth the extra cost in the long run.

That said, some extenuating circumstances where you might want to keep similar cards include:

As an example of when this might make sense, I actually have three Marriott credit cards, and they make sense to me not only because the elite night credits stack up and help me earn higher status, but also because each one gives me an annual award night that’s worth more than the annual fee.

On the other hand, I recently canceled one of my American Airlines cards because it was extremely similar to another American Airlines card I had and didn’t offer any distinct benefits that I was actively using.

Related: Are you considering canceling your credit card? Here’s why you might want to “downgrade” it

Hotel card if you do not use the annual night award

The hook that many hotel credit cards offer year after year is a annual free night award. Sometimes you have to spend a certain amount to access these nights, and other times they come with having the card for another year.

Annual free night certificates may become especially valuable as hotel award pricing becomes more dynamic.

But they’re only worth it if you use them, and some are much harder to use than others. For example, I have two 35,000 Point Marriott Certificates a year of my Marriott cards.

I can use them consistently (often for finishing them off with up to 25,000 Marriott points), but if I only stayed at high-end Marriott hotels, I might not have as much success using them. And if that’s your situation with annual hotel award nights, you may want to consider whether keeping that hotel card is right for you.

Or maybe you should have a hotel card, but not the one you have in your wallet right now. If that’s potentially the case, here are options in some of the top hotel programs:

A card you received because it had a great welcome bonus, but you’re just not using it

Credit card issuers may not like this one, but let’s be honest: many of us have opened a card primarily because The welcome bonus was too good to ignore..

And sometimes you might find that you really like the card and its ongoing benefits, and that it’s worth holding on to even if you got it in the beginning for a big bonus.

But once you get past the first year, you may realize that the card doesn’t actually deserve a permanent place in your wallet. And in that case, sometimes the right thing to do is to cancel or downgrade it and move on to make room for the next one.

Do this before canceling any credit cards.

before you cancel any credit cardHowever, here are three steps to consider.

1. Think about whether it is better to cancel or just degrade the card. Often, after a year, you can downgrade a higher-rate card to a lower-rate card within the same family. You usually won’t receive a welcome bonus for doing this, so keep that in mind, but it is an option to consider in some cases.
2. If you are undecided, you can ask about any Retention Offers Available when you talk to a credit card company representative on the phone before canceling. There may be an offer available for bonus points or a statement credit that makes the card worth keeping.
3. Do not cancel a card without Understand the implications of any reward.. For hotel and airline rewards, those points are usually in your larger hotel or frequent flyer account and are usually safe. But in the case of bank points, if you close your last or only card associated with that rewards currency, you will usually lose the points if you don’t transfer them first, so act strategically.

Yeah, Closing a card can affect your credit score through factors such as your credit utilization ratio and average account age. But beyond keeping your older accounts open and monitoring your debt-to-credit ratio, those concerns alone generally aren’t a good reason to keep paying annual fees for cards that no longer fit your wallet.

In a nutshell

Credit cards are supposed to serve your financial and travel goals, not become permanent residents in your wallet simply because they once made sense.

If you’re not sure if a card still deserves a place in your wallet, ask yourself:

• Did I really use this card’s biggest benefits in the last year?
• Did I clearly get more value than I paid for in the annual fee?
• Is there another card in my wallet that does essentially the same thing?

There’s rarely a right answer when it comes time to cancel or downgrade a card, but those questions should point you in the right direction.

Related: The best credit cards for travel