People Are Ditching Credit Cards With Annual Fees, J.D. Power Survey Finds

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Are we witnessing the end of credit card points and miles?

That appears to be the general feeling among consumers, according to a credit card customer satisfaction survey from J.D. Power. The consumer analytics company’s annual survey found that people are less interested in points and miles cards, gravitating instead toward cash-back credit cards. Card benefits are becoming less important too, compared with a manageable interest rate and helpful budgeting tools.

“There is a trend that we saw where consumers seem to be moving away from higher annual fee products, which tend to be points, miles, cards, whether they’re co-brand or bank brand,” John Cabell, managing director of payments intelligence for J.D. Power, told CNET.

The trend of people becoming more fee-averse isn’t that surprising considering the total cumulative credit card debt in the US is now over $1 trillion. It only makes sense that people looking for a credit card might want to spend as little as possible if there’s a chance they’ll revolve a credit card balance.

If you’ve been feeling bogged down by an annual fee card, you’re not the only one. As 2025 inches closer, it could be time to change your credit card strategy.

Why people are moving away from points and miles credit cards

There are ways you can offset the cost of an annual fee. Some credit cards might offer annual statement credits to reduce your account’s balance or things like airport lounge access or other quality-of-life improving services. You can also check to see if your spending habits would yield enough rewards to cover the fee before you apply. However, these might not apply to everyone.

Financial pressures are up and card perks are starting to feel less beneficial

The survey also found that more than half of respondents are struggling to meet their financial responsibilities, such as covering monthly bill payments and planning for their financial future.

Further, 51% of respondents indicated that they’re revolving a credit card balance, and 25% of people feel like their overall card benefits aren’t improving their lifestyle. These factors are likely among those that are changing how people choose their credit cards.

“We saw a significant increase in [people] that said the reason they would open a future card in the next 12 months was for a low interest-rate balance transfer,” Cabell said. “There was a drop in [people] that said that they would look for a new card for better benefits or better customer service.”

Customers might soon look for different perks -- specifically, lower interest rates, balance transfer opportunities and budgeting tools or other features that can help improve their financial health.

To attract and keep these customers, Cabell said that card issuers may need to offer extended payment plans, financial budgeting tools for planning and transparent communication around interest rate and service changes.

Are you feeling financially squeezed? Try these tips.

If you’re struggling with credit card debt, you’re not alone. I have struggled with credit card debt in the past and am still working on it. 

While everyone’s circumstances are different (and some of these tips might make you say, duh, obviously and roll your eyes) these are three things I’ve done to cut back on my $5,000 debt. Here’s hoping they might help someone in a similar situation.

• Limit discretionary spending. Instead of eating out twice a week, drop it to once or none at all and instead put that money toward your credit card balance. If there are any purchases you can hold off on, do so. The faster your debt goes down, the sooner you’ll be able to treat yourself again.
• Cut back on your streaming subscriptions. You really don’t need every streaming service, despite what the current zeitgeist might suggest. If there’s one you’re not using, unsubscribe. Or if you really can’t go without, rotate them in. Virtual credit cards can make this an easy process.
• Use a balance transfer credit card. This is what has helped me the most. I transferred my debt to the Citi Simplicity® Card* and have been steadily paying it off while the balance isn’t accruing interest. Pay any of what had been your discretionary spending toward the debt until it hits zero.

*All information about the Citi Simplicity Card has been collected independently by CNET and has not been reviewed by the issuer.

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.

Evan Zimmer has been writing about finance for years. After graduating with a journalism degree from SUNY Oswego, he wrote credit card content for Credit Card Insider (now Money Tips) before moving to ZDNET Finance to cover credit card, banking and blockchain news. He currently works with CNET Money to bring readers the most accurate and up-to-date financial information. Otherwise, you can find him reading, rock climbing, snowboarding and enjoying the outdoors.