Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.

This week’s episode starts with a discussion about the potential end of credit card rewards.

Then we pivot to this week’s money question from Sheryl, who wrote us this email:

“Hello Smart Money folks! I could use some advice. I am trying to decide if I should cancel my AmEx Platinum card. It has a hefty yearly fee, $695, but has a bunch of perks that exceed the yearly fee value, if I use them all; I don’t use them all so my perks probably equal the yearly fee. Since it’s a charge card I pay it in full each month and it has no credit limit. I have three other cards. Two of them I almost never use with no or low annual fees. The 3rd gives me 1% when I buy and 1% when I pay my balance. I use this card for almost everything and so far this year have received about $720 through the cash back rewards. There is no annual fee but the credit limit is rather low, so if I put all monthly expenses on it and then make a bigger purchase, it looks like my credit utilization is high on that card.

“For consideration: My credit score is about 810 and my annual base salary is $335,000, but I live in one of the most expensive areas in the country (Silicon Valley). Should I cut the AmEx cord?”

Check out this episode on either of these platforms:

Our take on the end of credit card rewards

If passed, the Credit Card Competition Act of 2022 could spell the end of credit card rewards programs as they exist now. The legislation aims to give merchants more choice over the payment network they use for credit card transactions — now, Visa and Mastercard are the dominant players — in the hopes that more competition will reduce interchange fees. However, those interchange fees, or swipe fees, which usually are 1% to 3% of the transaction amount, help fund credit card rewards perks like miles, points and sign-up bonuses. If interchange fees decrease, rewards programs will probably be less generous than they are now: Similar legislation in 2010 capped interchange fees on debit card transactions, resulting in the near-extinction of debit card reward programs.

Our take on canceling luxury credit cards

If you’re holding on to a card with a high annual fee, think hard about whether you’re using all of its perks — and when you might want to cancel the card.

To start, when you get a new card with dazzling perks, do an inventory of all that the card offers. You might want to make a spreadsheet or write out a list of the myriad benefits, since they can be sprawling. When you go through all of the rewards your card offers, you may find that added up they are worth more than the annual fee. Once you know the benefits available, make a plan for how and when you want to use the perks, such as getting TSA PreCheck ahead of upcoming travel if your card covers the cost.

If this sounds like too much trouble — or you simply don’t want to pay an annual fee at all — you might want to look into credit cards that offer perks and don’t charge an annual fee. And if you already have a card with an annual fee that you aren’t making the most of, you might be able to do a product change, where you ask the issuer to switch to a different card in its lineup.

Our tips

  • Explore your options. Before canceling a card, see about downgrading or product-changing to keep your credit history and credit line open for the sake of your credit scores.
  • Know yourself — and your spending. Realistically evaluate a card’s value for you, not just the flashy marketing about all the perks.
  • Use what you earn. Have a plan for any rewards you’ve accumulated so that if you do close the card, you don’t lose them entirely.

Have a money question? Text or call us at 901-730-6373. Or you can email us at podcast@nerdwallet.com. To hear previous episodes, go to the podcast homepage.

To view rates and fees of The Platinum Card® from American Express, see this page.