Travel Credit Cards – Keep Or Cancel?

It’s no secret that credit card sign up bonuses are the fastest way to build up your frequent flyer point balance. With 100,000 point bonuses per new card for both Qantas Frequent Flyer and Virgin Velocity being reasonably common, Drew and I have a fair few credit card accounts each.

With travel currently prohibited and then curtailed for the foreseeable future, the value of frequent flyer credit cards is diminished.

So if you have multiple credit cards, what should you do?

Keep Your Cornerstone Card

When churning through multiple credit cards per year, I always have a cornerstone card and a challenger card. 

All my direct debits and recurring payments are set to the cornerstone card, which is currently the Westpac Altitude Black Mastercard. 

The challenger card is used for larger one-off purchases to reach the minimum spend criteria for bonus points. This card is then closed once the bonus points have been credited and benefits such as free flights and lounge passes redeemed.

Travel Credit And Airline Perks Are Now Less Valuable 

With limited opportunities for travel for at least the next 12 months, the perks that come with some cards like the ANZ Travel Adventures such as a return domestic flight with Virgin Australia are unlikely to be used. 

Similarly, the $450 Qantas travel credit that comes with the American Express Qantas Ultimate card is going to be hard to use. Particularly if you already have flight credit from cancelled flights.

Check Any Transactions That May Be Refunded

As Drew shared in his What Coronavirus Has Taught Me About Travel Bookings post, more and more travel providers are now offering full refunds instead of credit for future bookings. 

Before cancelling any card, it is worth checking if there are any transactions that will be refunded back onto that card. It’s much easier than waiting for a cheque or international bank transfer.

I was able to cancel my American Express annual travel insurance policy for a pro-rata refund to my challenger card.

Cancel Challenger Cards, Get A Head Start 

Most cards come with a 12 month waiting period before you are considered a ‘new’ customer and therefore eligible for bonus points. So it makes sense to cancel all challenger cards and get a head start on the next round of bonus points. 

I just cancelled the ANZ Travel Adventures card, which was my challenger card. 

Worth noting that the travel insurance policy refund resulted in a credit balance, which requires a final statement to be issued before the funds can be transferred out. 

Summary

With travel opportunities limited for the foreseeable future, it is only worth keeping your cornerstone card. 

Get a head start on the typical 12 month waiting period for bonus points and wait until travel resumes so perks like an annual free flight and lounge passes can be used again.