Is it worth keeping a credit card after the first-year bonus?

Have you recently applied for a credit card to catch a big sign-up bonus? If you’re unsure whether to keep the card for a second year, we’re here to help you with a handy step-by-step guide to determining exactly how much value you are getting.

Unfortunately, with bank sign-up requirements getting tighter in 2025 (many have adopted a 24-month exclusion period), keeping a card beyond its first year might make sense in a few scenarios.

Step 1: Figure out how many points you earn on the card

According to the Reserve Bank, Australians held over 15.4 million credit cards in 2019, spending an average of $21,600 on each of those cards across the year. High-income cardholders could spend significantly more than that on household and everyday expenses, but we’ll use the average amount for this guide.

A card like the Qantas American Express Ultimate can earn as many as 1.25 Qantas Frequent Flyer points per dollar spent on eligible purchases.

Other cards like the Qantas Premier Platinum Mastercard, the ANZ Frequent Flyer Black Visa and the NAB Qantas Rewards Signature Visa can each earn up to 1 Qantas Point per A$1 spent. 

On an annual spend of A$21,600 – presuming all purchases are eligible to earn rewards points – you would be earning:

• 27,000 Qantas Points (at 1.25 Qantas Points per A$1), or
• 21,600 Qantas Points (at 1 Qantas Point per A$1)

Some cards split the sign-up bonus across two years. If that’s the case for you, also consider how many points are still on the table if you renew for the second year.

Step 2: Consider the worth of your annual points haul

We currently estimate the value of one Qantas point at 1.9 cents. That’s based on one methodology, which considers various factors – you could also work out your own valuation based on your activity over the last year.

However, many credit card rewards programs also offer a range of other partners to which you can transfer points, including Velocity Frequent Flyer, Singapore Airlines KrisFlyer, Asia Miles and Marriott Bonvoy. The value of your credit card points could vary significantly between those programs. 

Using Qantas Frequent Flyer as an example: to calculate the indicative value of your yearly points earn, multiply your points total by 0.019 (or another value of your choosing). 

• 27,000 Qantas Points @ 1.9c per point = A$513.00
• 21,600 Qantas Points @ 1.9c per point = A$410.40

If you earn into a flexible rewards program or a different airline frequent flyer scheme, then check our point valuations to figure out roughly how much your annual haul is worth.

Step 3: Put a value on your other card benefits

This can be a little harder to judge, considering some added card benefits you may never use or maybe worth little if you try to use them. However, some hard benefits can be quantified.

Travel credits

Many American Express cards come with annual travel credits or a free flight benefit as part of their perks. This is relatively easy to quantify and often offsets the annual fee entirely.

The Qantas American Express Ultimate card comes with a $450 annual Qantas travel credit, while the American Express Explorer card comes with a $400 annual credit for flights, accommodation or car hire booked through Amex Travel. The annual fee for those cards is $450 and $395, respectively – covered by the value travel credits.

Lounge passes

Many American Express cards also come with two complimentary invites to international airport lounges in Sydney and Melbourne each year. The Platinum Charge card goes a step higher with worldwide lounge access across Centurion and partner lounges whenever you fly.

Other cards like the ANZ Frequent Flyer Black Visa and the Qantas Premier Platinum Mastercard offer two complimentary Qantas Club passes, which you could value at around $50 each if you were planning to fly with Qantas or Jetstar in the next 12 months. 

Cards like the Citi Premier Mastercard offer two lounge passes for the Priority Pass program, which you could also value at $50 each if you were going to use them. The top-tier Citi Prestige card offers an unlimited Priority Pass membership.

For frequent travellers, the high-end cards offering unlimited lounge access when flying could be worth holding onto. It comes down to your travel habits. Also consider which airports and terminals you frequently depart from, and what the lounges are like. It might not be worth it if your ‘regular’ lounge is subpar.

Insurance and other extras

It’s also worth considering the value of complimentary international travel insurance, which is included with many rewards credit cards, as this could be worth hundreds of dollars if you had overseas travel booked. If you have a trip booked within the subsequent of your card anniversary, do consider that the trip may no longer be covered if you cancel your card beforehand.

Many cards also offer soft benefits but can be hard to put an exact value on, like the Hilton Honors Silver status that comes with the American Express Explorer card and the various Gold status tiers (plus an Accor Plus membership) that comes with the American Express Platinum Charge card. 

Mid-level hotel status like this is hard to quantify with a dollar value because some benefits, like complimentary room upgrades, are only provided if available on arrival. 

4. Add the value of points and card benefits together

Let’s say I held the Qantas American Express Ultimate Card. Spending $21,600 a year, I earn 27,000 Qantas Frequent Flyer points annually. I valued these points at $513.00, based on Point Hacks’ current valuations. 

Regarding hard benefits, I receive a $450 Qantas travel credit and four lounge passes each year (two for Amex, two for Qantas). We could value the passes at $50 each.

• Points value: ~A$513.00
• Added card benefits: ~A$650
• Card annual fee: ($450)
• Total card value: About $713 after taking out the annual fee

That’s even ignoring the value of other card benefits like complimentary travel insurance and complimentary Qantas Wine Premium Membership. 

Other reasons to keep a card

There can be other reasons to keep a card, even if your annual fee is costing you a little more than the benefits you are getting from your card. If you’re looking at retirement, for instance, it’s important to know that your chances of being approved for another card are much lower once you’re no longer working.

Many credit cards offer the ability to earn points with the bank or financial institution’s own program and then later transfer them to various airline or hotel loyalty programs.

For example, many American Express cards earn Membership Rewards points that can be transferred to one of at least ten airline and hotel partner programs. 

Because banks such as ANZ and Westpac are now implementing a 24-month exclusion period for sign-up bonuses, there are two trains of thought to consider.

On one hand, you might want to cancel the card as soon as possible to be eligible for the bonus sooner. On the other hand, cancelling a card might leave you with no way to earn reward points on daily spend if you’ve exhausted the sign-up options elsewhere. In this case, it could be worth holding onto your current card a bit longer until you can make the switch again.

Reasons not to keep a card

Of course, there are also times when you won’t want to keep a card, even if the benefits outweigh the annual fee. This is usually when you want to take a break with a particular bank and jump onto a new sign-up bonus deal with a different card issuer. Most banks have lengthy waiting periods before you’re eligible for another sign-up bonus.

Check the Point Hacks Credit Cards page for the latest deals on a new credit card.

Summing up

When it comes around to paying an annual fee, it’s worth doing the sums to determine whether to hold on to the card for another year or not.

You should consider how many points the card earns you each year, the value of those points and the value of any added card benefits, and weigh them all up against the cost of the annual fee.

There are circumstances where the numbers might not quite add up, but it could still be worth keeping the card regardless. Vice versa, you might decide it’s time to switch to a different bank and snag a new signup bonus.

Recent updates by Brandon Loo.