When (and how) to break up with your travel credit card

Valentine’s Day is just around the corner, so I thought I’d take the most romantic day on the calendar to talk about breakups! 

I’m talking about when it’s time to break up with your credit card, not your boo. That is clearly outside of my zone of expertise. 

So, blast your playlist of favorite breakup anthems, and let’s get ready to say “Bye, Bye, Bye.” 

When is it time to break up with your credit card?

Maybe the card perks don’t just hit like they used to. 

Or maybe… that annual fee is harder to excuse as the years go by. 

Or maybe… you got drawn in by a one-time signup bonus. After you scratched that itch, well, let’s just say you lost interest. 

Regardless of your reason, when it comes to breaking up with your credit card, this time it is OK to say, “It’s not me, it’s you.”

Because breakups are all about who holds the balance of power, you need to know your options.

Option 1: Breakup and cancel the card

The most dramatic, final, and concrete option is to cancel the card.

This is when you call the credit card company and say, “We are never, ever, ever getting back together.”

Before canceling, you need to:

• Pay off your entire outstanding balance.
• Move any recurring payments to a different card.
• Use your rewards (more on this below).

Because this is final, all your benefits end. So, if your card offers statement credit perks, you should redeem them first. If you have unused points and miles, you’d want to transfer them to an airline or hotel partner first. 

Also, be aware that closing a credit card can affect your credit utilization ratio—the percent of your total credit you’re using at any time. This figure plays a part in determining your credit score. 

Depending on your personal financial situation, cancelling a card could reduce the amount of available credit you have, thereby increasing your credit utilization ratio and dinging your credit score.

Option 2: Situationship: Ask for a retention offer

OK admit it: Sometimes you complain, but you secretly want to stay in that toxic relationship a little longer. 

Maybe you don’t love the high annual fee, but those extra card perks hit just right. (Hey, you do you. This is a judgment-free zone.)

In this case, you can call your card issuer and ask for a retention offer. 

This is when you commit to keeping the card open for another year and pay its annual fee. In exchange, the issuer may reward you with additional points or miles. Usually, this arrangement is structured like a signup bonus: The issuer requires you to spend a preset dollar amount before awarding you the retention offer points. 

Just be aware that this option does not always work. (Kind of like in the real world, but I digress…)

You can ask for a retention offer on any card, but you may have better luck on the high annual fee cards, like these premium ones. 

In other words, you’re not likely to have much success getting a retention offer on a $95 annual fee card. And in full transparency, retention offers are less common these days. During the pandemic, getting a retention offer was fairly common when many of us weren’t traveling as much.

If you manage to get a retention offer, just be aware that this is a one-time thing. You can try again next year, but there’s no guarantee. 

Option 3: Let’s just be friends: Downgrade

If the hefty annual fee is the main reason you want to leave your credit card relationship, you can consider downgrading to a less expensive option. 

If you don’t want to lose the ability to transfer points to partners, it might be worth paying the annual fee on the card to keep this option open. (In reality, these two cards work great as a pair. Kind of like Harry and Meghan—they just work better together.)

Or, if you do want to downgrade, first transfer your points out to a partner that you’re most likely to use in the future. Once the points are out of your card’s account, then you’re safe to downgrade. 

“thank u, next”

And if you’re ready to start a relationship with a new card this Valentine’s Day, I’ve got a bunch of popular options for you. Use the new Card Finder tool to help find the right card for you.