Start with the fee you cannot avoid
The Consumer Financial Protection Bureau tells card shoppers to compare the value of rewards they expect to receive and use with the annual fee they pay. That word—use—is the important part. A $200 credit for something you would never buy is not worth $200 to you.
Write down the annual fee, then list the benefits you used in the last 12 months without changing your behavior to justify the card.
Separate rewards from coupons
Cash back you actually redeem is straightforward. Travel points need a realistic redemption value based on how you use them. Statement credits are worth the amount of spending they genuinely replace. Lounge access is worth what you would personally pay for it, not the retail price on a marketing page.
Then subtract costs created by the card: higher prices from booking through a required portal, unused monthly credits, or spending you would not otherwise make.
Interest overwhelms rewards quickly
If you carry a balance, rewards should move down the priority list. CFPB notes that APR is the price of borrowing and that many issuers calculate interest daily. A few percentage points of rewards do not compensate for sustained credit-card interest on a revolving balance.
For someone who regularly carries balances, comparing APR and fees can be more important than optimizing points.
Use a one-year scorecard
At renewal, total the rewards redeemed, credits used at full personal value, and other benefits you would otherwise have purchased. Subtract the annual fee. If the result is barely positive, ask whether a no-fee card could provide most of the same rewards with less complexity.
Do the calculation again when the fee or benefits change. CFPB notes that card terms and rewards can change, so a card that made sense three years ago does not automatically earn another year in your wallet.