There are many excellent credit cards out there for churning. However, sometimes it makes sense to keep a credit card past the first year and pay an annual fee. Rarely does this apply for cards simply because of their rewards program, but because of their warranty and insurance programs.
A couple years ago I bought a Macbook using a credit card with an extended warranty program. I did not buy the added warranty benefit, instead relying upon my credit card’s warranty program. It came with a 90 day “destruction, theft, etc” reimbursement. On the exact 90th day (so lucky!), I spilled my morning coffee on my laptop and fried it. After 6 weeks, I got an insurance check for the full amount of the laptop! I bought a new one on the same card.
The card also had a warranty doubling program, where any product that had warranty included would have that warranty’s term doubled. Apple products come with a one year warranty, and the credit card gave me an additional year. At the end of the second year, my laptop crapped out. Again, the credit card warranty came to my rescue, and replaced my laptop. I’ve used this program similarly on cellphones that I have dropped, and on a “price drop” reimbursement for a watch.
This is an example of when you might wish to keep a card past the first year. When you have warranty or travel insurance that depends on the credit card being active, it might be financially wise to keep the card. In my situation, the Apple extended warranty would have been substantially more expensive than my credit card’s included warranty, and the cost-benefit analysis weighed in favour of keeping the card.
Have you ever kept a card past the first year just for the insurance or warranty benefits? Have you ever used those benefits?