This Silly Credit Card Mistake Cost Me $95

by Maurie Backman | Updated July 21, 2021 - First published on Feb. 2, 2021

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Sometimes, you need to lose money to learn a valuable lesson.

In the summer of 2019, I made the decision to apply for a travel rewards credit card. The reason? I was planning to do a fair amount of travel not only in the coming months, but throughout 2020.

The card in question came with a $95 annual fee, but I decided to apply in spite of it. First of all, that fee was waived the first year. But even with the fee, based on my plans, I knew I'd score more than enough reward points to make that $95 worth paying. Plus, my card came with perks like free checked bags and other amenities designed to make travel more pleasant.

Well, I did use my travel card to book a few trips for 2020. But then the pandemic struck, and those trips were canceled.

I have to admit, I received excellent customer service as I navigated the process of getting my money and miles back for the flights I wouldn't be taking. But then I made a foolish mistake -- I neglected to cancel my card on my one-year anniversary. So now, I'm stuck paying $95 for benefits I won't get to enjoy.

A glaring waste of money

I like to consider myself a fairly frugal person who's mindful of how she spends money, so to lose out on $95 is a huge bummer. Is that a life-changing sum for me? No, it's not. But when I think about the things $95 could buy me -- a bundle of groceries, a nice dinner at a restaurant, or a fun outing with my kids (once it's safe again) -- it makes me all the more sorry I didn't close that account before my second year.

Now to be fair, it was also an innocent mistake. When I signed up for the card, I never intended to cancel it after a year. Rather, I thought I'd get good use out of it. But I should've realized last summer that I wouldn't be doing a lot of travel during the pandemic. Had I remembered to pull the plug on the card, I'd be $95 richer.

A better system moving forward

At the end of the day, this wasn't an earth-shattering blunder, but it's helped me put an important practice into play for my finances. The next time I sign up for any sort of credit card or service (like a streaming service, for example), I must mark the one-year anniversary on my calendar and set a reminder a week prior. That way, I can reevaluate that card or service and decide whether I want to keep it.

A lot of the services I use renew annually -- for example, I pay yearly fees for a music streaming service and for an Amazon Prime membership. Even if I don't end up canceling these services, it's smart to do an annual check-in and make sure I still need them. The alternative is continuing to pay for something I may not need or use and waste money in the process.

To be clear, the annual check-in rule isn't as essential with credit cards that don't charge an annual fee, since there's nothing to lose by keeping them open. In fact, in some cases, keeping additional cards open is a good thing, because it can leave you with a higher total spending limit that helps your credit utilization ratio stay low. But checking in on the things you pay for once a year is a smart practice. Had I employed it, perhaps I'd be treating myself to $95 worth of takeout this week instead of scrambling around my kitchen to cook a series of dinners for my family.

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