Are your credit cards really worth it? How to tell if the rewards beat the fees

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Credit cards can be a great financial tool — or an expensive habit in disguise. Many people hold multiple cards because of sign-up bonuses or travel perks but never stop to check whether the rewards justify the yearly fees. If you’re paying thousands in charges for benefits you barely use, it’s time for an audit.

Start with the annual cost

The simplest way to begin is by listing what each card costs you — the joining fee, annual fee, and any hidden renewal charge. Some cards waive the fee if you hit a certain annual spending target, but if you never reach that number, those benefits mean little. Treat every rupee spent on fees as an investment that must earn you more in rewards.

Check what rewards you actually use

It’s easy to be drawn by flashy points or cashback promises, but they only matter if they fit your lifestyle. A card that gives airline miles is useless if you don’t travel often, and a fuel cashback card is pointless if you don’t drive much. Go through your last few statements to see which offers you’ve truly redeemed — and which ones just look good on paper.

Don’t ignore redemption rules

Many reward points expire within a set period or can only be used for specific purchases like flights or e-vouchers. Check your card’s redemption terms and see if the value per point justifies the effort. A card that gives flexible cashback or statement credit often ends up being more practical than one that ties you to complex redemption programs.

Watch for hidden costs

Foreign transaction fees, cash withdrawal charges, and interest on carried balances can quietly eat into your gains. Even a card with generous rewards can lose its edge if you regularly pay interest or miss due dates. The goal is to use the card for benefits — not to fund the bank’s profits.

When to close a card

If a card’s annual fee exceeds the value of perks you actually use, consider downgrading to a no-fee version or cancelling it altogether. Keeping too many idle cards also increases the risk of fraud and complicates bill tracking. Just remember to check how closing it might affect your credit score — a small dip is normal, but long-term discipline matters more.

The takeaway

Credit cards are worth keeping only if they add value to your life, not clutter. Review them once a year, calculate what you earn versus what you pay, and keep the ones that work hardest for you. The rest? Let them go — your wallet and your credit score will both thank you.