Stop Feeding the Beast: Close Those Unused Airline Credit Card Accounts

By Robert McGarvey

The cheering you hear is mine.

I am celebrating that in the past year I have closed two airline credit cards – a United card with Chase ($95 annual fee) and a Barclays red card with American ($99).  Nope, not big bucks but I cannot recall the last time I used the United card or flew United and living in Phoenix there is scarce good reason for me to do that.

As for American, it is the second biggest carrier out of Sky Harbor – Southwest is ahead by a handful of flights – but I have a new Southwest card in my wallet and, honestly, I always have preferred the SWA platform with no checked baggage fees and no flight change fees.  The exorbitant fees imposed by other carriers – fingers pointing at you, American – for such services just make no good sense.

I took the SWA card to get the signing bonus, which I already used on a pair of tickets to Dallas, but I am comfortable shifting my trade to SWA for now and, besides, the annual card fee is only $69.

I also have a new Delta card – $99 via Amex – which I took for the mileage bonus (60,000) – and Delta is the third busiest carrier at PHX. A distant third, but it has revitalized terminal 3 at Sky Harbor and I have flown it to Europe twice in as many years.  

You could say that I have traded a pair of losing cards for two new cards of the same ilk but – in a temporary way – I have made out fine with the free tickets to Dallas and I’ll soon cash in the Delta miles.  I also have a pile of Amex miles that of course transfer into Delta SkyMiles so, probably, in today’s airline math I’ll wind up with two tickets to Spain in exchange for a lot of miles.

Does that make me a winner?

Never forget that when we play the miles game it is akin to playing blackjack with chips – but the dealer continually and seemingly arbitrarily devalues your chips. That white chip was worth $1 a minute ago, now it’s worth a dime, and there’s no recourse.

So it goes with airlines and miles in a world of dynamic awards pricing which is a b-school way of saying we’ll charge what we believe the market will suffer.

Dynamic pricing also means that, suddenly, we need huge stacks of miles to get anything worthwhile.

Of course there are those “sales” where, say, 35000 SkyMiles will buy a roundtrip to Europe – but I do notice nobody tells us exactly how many or even approximately how many discounted roundtrips have been loaded into the system. I do look for them, I do, but rarely for more than five minutes because I see this as an updated snipe hunt.

The only way not to be a loser in this game where miles are continually devalued is to shuffle airline credit cards, signing up for new ones and collecting bonuses while dumping cards that have served their purpose. Yes, I know that in many cases you can only collect the signing bonus once on a particular card – but I have no plans to re-up with United or American unless I move to a city where I’d be a fool not to.  I also know that some card issuers – Chase for instance – keep track of how many new cards you get and will decline to issue a card if you’ve opened a lot of new cards anywhere.  (The Chase 5/24 rule.)  And I know that there may be penalties if you close a card too quickly after collecting a bonus. The issuer may even want to claw back any bonus you’ve collected.

But, like me, you probably have a few dusty and little used airline cards in your wallet that impose annual fees – shut ‘em down is my advice. Do it pronto. Even though the norm seems to be you have to call to close an account (although you can open the account online). Make the calls.

The airlines, remember, are playing us for suckers because their profits now come not from flights but from the bulk sales of points to card issuers such as American Express and Chase. In 2022 alone, Delta took in $5.5 billion from AMEX.  

Know the new rules. Know your goals. Play to win. That’s the only way not to be a loser in the miles and rewards games of 2023.