Why More People Are Quitting Credit Cards With Annual Fees

Annual Fees Out, Simplicity In: How Credit Card Users Are Changing Tactics in 2024

The era of flashy travel rewards and luxury card perks may be fading. According to the latest findings from J.D. Power, a growing number of credit card users are walking away from cards with hefty annual fees,and choosing more practical, budget-friendly options like cash-back credit cards instead.

This shift marks a turning point in how consumers prioritize credit card benefits, moving away from aspirational rewards and toward financial tools that offer lower interest rates, budgeting support, and fee-free structures.

Cash is king again,and not just in your wallet, but in how your credit card pays you back.

What’s Driving This Big Credit Card Shift?

As financial pressures rise, consumers are becoming more strategic. J.D. Power's annual credit card satisfaction survey revealed that 58% of cardholders now use cash-back cards, compared to only 31% who use points or miles cards.

So why the sudden change?

According to John Cabell, managing director of payments intelligence at J.D. Power, it’s simple: cost. "There’s a trend where consumers are stepping away from higher annual fee cards," he told CNET.

The average annual fee for points and miles cards sits at $140, while cash-back cards average just $44,with only 10% of them charging a fee at all.

As everyday budgets tighten, even those once-coveted travel perks or airport lounge passes aren’t enough to justify the price tag.

It’s Not Just About the Perks Anymore

Back in the day, consumers might’ve chosen a card because of airline partnerships, sign-up bonuses, or lifestyle perks. But that’s no longer the case for many in 2024.

J.D. Power found that more than half of credit card holders are financially strained, struggling to make regular bill payments or plan for long-term financial goals.

Here are a few stats that paint the picture:

• 51% carry a credit card balance each month
• 25% say card perks don’t improve their lifestyle anymore
• A growing number are applying for cards to transfer balances or lower interest rates, not for perks

Instead of a first-class upgrade, people now want:

• 0% APR offers
• Balance transfer cards
• Budgeting tools
• Transparent interest rate policies

Cabell says issuers may need to adapt by focusing on financial wellness tools, longer repayment options, and clearer communication to retain customers.

Want to Escape Annual Fees? Try These Strategies

If you’re among the millions feeling the pinch and want to rework your credit card strategy, here are some real-world, no-nonsense tips from someone who’s done it:

1. Cut Out Discretionary Spending

That extra coffee run or weekly takeaway could go directly toward your debt. It’s not fun,but it adds up fast.

2. Streamline Streaming Subscriptions

Ask yourself: Are you really watching all 5 of those services? Cancel or rotate them using a virtual credit card for quick management.

3. Leverage Balance Transfer Cards

Zero-interest balance transfer cards can offer real breathing room. One solid example? The Citi Simplicity® Card, which helps users pay down debt while interest takes a vacation.

Just remember to check balance transfer fees and pay down the balance before the 0% period ends.

Final Thoughts

As 2025 nears, Americans are getting savvier with their money,and their credit card choices reflect that. Annual fee cards, once symbols of luxury and travel, are losing appeal to the practical power of cash-back simplicity, lower interest, and financial control tools.

If you’re juggling debt or just want a smarter way to spend, now might be the perfect time to rethink your card game.

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