New Year New Card? Here's How To Decide

January is the right time to run a card audit. The holiday spending is done, you have a full year of data in your statements, and nothing has changed yet to make your current setup feel outdated. Here's the framework I use.

Step 1: Pull Your Annual Spending by Category

Download your statements from last year. Categorize the spending: dining, groceries, travel, gas, subscriptions, everything else. Most banks have this built into their apps now, though their categories aren't always accurate — check them.

What you're looking for: where is your money actually going? Not where you think it's going. People consistently underestimate dining spend and overestimate travel spend. The data matters.

Step 2: Calculate What You Actually Earned

Take your categorized spending and apply your current card's earning rates. Add up the points or cash back. Convert to dollars using your card's redemption value (cash back is simple; points require knowing your redemption rate).

Now subtract any annual fees.

This is your current annual card value. Write it down.

Step 3: Calculate What You Could Have Earned

Apply your spending to a different card. The one you've been curious about. The Capital One Venture if you've been considering it. The Amex Gold if dining is your biggest category. The Citi Double Cash if you want simplicity.

Calculate the net value with that card's fees.

Compare the two numbers. If the new card earns significantly more — typically I use $100 as my threshold, since switching cards has a cost in time and mental overhead — consider switching.

Step 4: Consider the Welcome Bonus

New card welcome bonuses are often the most valuable thing in personal finance that people ignore. The Capital One Venture currently offers 75,000 miles (worth $937) after $4,000 in the first three months. If you have $4,000 of spending coming up in Q1 (and most people do, between January bills, tax prep, and winter purchases), this is essentially free money layered onto your normal spending.

A welcome bonus changes the math significantly in year one. Don't overlook it.

What I Changed Last January

I added the Amex Gold after running this exact analysis and realizing my grocery spend — $380/month — was earning 1x on my previous card. Switching that category to 4x added $272 in annual value net of the fee. The math was obvious once I saw it.

Marcus did not run this analysis. He is still using the same card he opened in 2019. I have offered to run the numbers for him three times. He says he'll do it after the Super Bowl.