The test
Take the value you actually use from the card in a year, subtract the annual fee, and look at the sign. Positive means keep it. Negative means downgrade or cancel.
The hard part isn't the subtraction. It's being honest about the first number.
What counts as value (and what doesn't)
Credits count only if you'd have spent the money anyway. A $200 airline credit you forget to use is worth $0. A monthly dining credit you use because it's there, at a place you wouldn't normally go, is worth less than face value.
Lounge access counts only at what you'd pay for it. If you'd never buy a lounge day pass, don't count the sticker value.
Points count only above what a no-fee card would earn. If a flat 2% card would earn you $300 a year on the same spending and the fee card earns $450 in points, the card's real edge is $150, not $450.
A worked example (illustrative numbers)
Say a premium card has an $895 fee. You use $400 of its travel and shopping credits, you'd pay about $150 a year for lounge visits, and its points beat a 2% card by $250. That's $800 of real value minus $895: −$95. Close, but it's a downgrade or a retention call, not an automatic renewal.
Same card, but you also use a $300 hotel credit you'd have spent anyway: $1,100 − $895 = +$205. Keep it.
Before you cancel
Call and ask what retention offers are available, then ask about a no-fee downgrade. A downgrade keeps the account open, which protects the length of your credit history. And spend any points on the card first, because some programs forfeit them when the account closes.
Published 2026-09-23.
Want the math done for you? The Annual-Fee ROI Calculator gives every card a keep, borderline or reconsider verdict in about two minutes.