How to Decide Whether an Annual-Fee Card Is Worth Keeping Based on Benefits
Even if the benefits look plentiful, only the benefits I used are real
Annual-fee cards often feel like they more than pay for themselves because their benefit lists are long. But no matter how many perks there are, such as a 1.5% reward rate, free lounge access, or movie discounts, only the benefits I actually used count as my benefits. Lounge access I never use and movie discounts for films I never watch may appear in the card issuer’s brochure, but they do not show up in my bank account.
| Section | Key summary |
|---|---|
| Even if the benefits look plentiful, only the benefits I used are real | Short key point |
| Example of summarizing one year in a table | Short key point |
| Decision order for canceling or keeping the card | Add up rewards, discounts, and cashback by category from the past 12 months of statements |
| Judge card benefits by the statement, not the brochure | The benefit list for an annual-fee card may be long, but only what I actually used is my money |
So one month before renewal, open the past 12 months of statements and place “total benefits I actually received” next to the “annual fee.” If the benefits received are not at least 2 times the annual fee, that is a signal to reconsider keeping the card. If it is only around 1.2 times, then after accounting for the attention spent managing the card and any extra spending, it often has not really paid for itself.
Example of summarizing one year in a table
| Item | Actual value received over 1 year | Note |
|---|---|---|
| Annual fee | -50,000 won | Expense (baseline) |
| Rewards and cashback | +72,000 won | Total rewards from monthly statements |
| Coffee and dining discounts | +18,000 won | Only the times actually used |
| Airport lounge | +0 won | Did not visit even once during the year |
| Vouchers and annual coupons | +0 won | Expired after the deadline |
| Total (benefits - annual fee) | +40,000 won | Slightly better to keep |
In this example, 40,000 won remains after subtracting the 50,000 won annual fee from 90,000 won in benefits, so keeping the card is better. But notice that items that existed in the brochure but were not used, such as lounge access and vouchers, are recorded as 0 won. The more attractive a benefit seemed when choosing the card, the more often the actual-use column is empty. Once those columns are removed, many cards are barely breaking even.
Decision order for canceling or keeping the card
- Add up rewards, discounts, and cashback by category from the past 12 months of statements.
- Subtract the annual fee from the total benefits. If the result is negative, canceling is better.
- Even if it is positive, if the benefits are less than 2 times the annual fee, write down your usage plan for the next 1 year.
- Check whether you spent extra on purpose just to receive benefits. (For example, something bought only to meet the spending requirement)
- If you have multiple cards, keep only one card with overlapping benefits and clean up the rest.
Number 4 is especially important. If a card requires 300,000 won in monthly spending to receive all rewards, the amount spent on things you did not need just to meet that requirement may be larger than the rewards. If the benefits have started driving your spending, that card is not serving you.
Judge card benefits by the statement, not the brochure
The benefit list for an annual-fee card may be long, but only what I actually used is my money. Add up the discounts, rewards, and voucher amounts used over the past 12 months and compare them side by side with the annual fee.
If you spent money on purpose to meet the spending requirement, that benefit may not be a real gain. Setting a reminder one month before the renewal date can prevent the card from automatically rolling over for another year.