Sunday Reader Question: When should I keep a credit card past the first year?

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?


    1. I’m sorry you feel that way 🙁 However, I do acknowledge that I haven’t posted many analytical posts lately – I’ve been crazy busy with Awarding Canada, job applications, etc. Don’t worry though, as once things settle down, I’ll be producing more analytical posts.

      1. OMAT also has an award booking site which probably has more clients than you and he is churning out 6 posts a day not 1 a month

  1. Avery,

    How did you make the claim for your laptop? Did you have to send in your receipt and your damaged laptop?

    1. All I had to do was send in receipt and a letter from Apple store that gave a damage repair estimate (more than cost of new laptop). I asked if I had to send in old laptop, and I was told no. So I got to do what I wanted with it (good scrap!).

  2. exactly, which credit card?

    -also do you think the 1 free night certificate and no foreign transaction fees are worth the $120 for the marriott card?

    i sort of forgot about the due date, so probably have no choice but pay and keep. Do you know if they do retroactive cancel/refund if i try to cancel now?

    1. No longer a credit card that exists, but an older Cap1 card. For the marriot card, yeah, I’d say it’s worth it.

  3. While I haven’t seen any free Canadian cards with travel insurance, if you wanted purchase protection and extended warranty my free cards give me that:
    * AMEX Simply Cash and Blue Sky
    * MBNA Smart Cash MC, etc

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