How to Evaluate a New Credit Card
A new credit card offer can look amazing on the surface: big bonus, glossy perks, and a long list of benefits. But not every “great” card is a great fit for you.
This guide walks through a simple, consistent way to evaluate a new card before you apply: looking at your goals, the total cost, the welcome offer, ongoing rewards, and how the card fits into the rest of your wallet.
1. Start with Your Goals
Before looking at points and perks, it helps to be clear on what you actually want from a new card.
Common goals include:
- Boosting a specific trip or travel plan in the next 12–24 months
- Building a simple, high‑earning everyday setup
- Adding strong protections or insurance for big purchases or travel
- Getting outsized value from a particular airline, hotel, or rewards ecosystem
When you evaluate a card, keep asking:
“Does this card move me meaningfully closer to my goals, or is it just interesting on paper?”
A card that looks mediocre in general can be great if it lines up with your plans—and the reverse is also true.
2. Understand the Total Cost
Next, look at what the card will actually cost you to hold, not just in Year 1 but beyond.
Key questions:
- What is the annual fee? Is it waived in the first year or not?
- Are there authorized user fees? Will you actually add authorized users?
- Are there foreign transaction fees? Will that matter for how you spend?
If you ever carry a balance, interest can quickly outweigh any rewards. In that case, rewards cards—especially premium ones—may not be the right focus.
When you compare two cards, start with:
“What does it cost me per year to keep this card, realistically?”
Then you can compare that cost to the value you expect to get back in rewards and benefits.
3. Evaluate the Welcome Offer
Welcome offers are often the biggest source of value in the first year, but they only matter if you can comfortably meet the requirements.
Look at:
-
Bonus size and type
For example: 80,000 points, 120,000 miles, or $750 cash back. -
Minimum spend and timeline
For example: “$4,000 in 3 months” or “$10,000 in 6 months.” -
How this fits your normal spending
Can you reach the requirement with expenses you’d make anyway, without stretching?
A big bonus with a stretch spend requirement can be worse than a smaller bonus that easily fits your budget. The right question is:
“Given my normal spending, is this welcome offer realistic and worth the effort?”
Tools like SpendAndReward estimate a rough dollar value for a bonus using conservative values per point or mile. You don’t need to agree with the exact number, but it gives you a baseline for comparing multiple offers side by side.
4. Check Ongoing Rewards Against Your Spending
Once the welcome bonus is gone, a card’s ongoing rewards determine whether it’s worth keeping.
Key pieces to check:
-
Base earning rate
For example: 1x on everything, or 1.5x on everything. -
Category bonuses
For example: 3x on dining, 5x on travel, 4x on grocery, or special categories like transit, streaming, gas, or online shopping. -
Your real spending mix
Roughly how much do you spend in those categories each month or year?
A card that earns 5x points in a category where you spend very little might be less valuable than a 2x card in a category where you spend heavily.
If you use SpendAndReward, you can see estimated ongoing yearly value for template cards based on a neutral spend pattern, then mentally adjust up or down based on how your spending differs.
5. Look at Credits and Breakage
Many cards, especially those with higher annual fees, come with various credits: travel, rideshare, streaming, hotel, lifestyle perks, and more.
These credits can make a card look “free” on paper, but only if you consistently use them without changing your behavior just to use the credit.
For each major credit, ask:
- What is the face value? (e.g., $200 in airline credits per year)
- How is it structured? (monthly, annually, calendar year, cardmember year)
- How easy is it for you to use? (Do you already spend in that area?)
In SpendAndReward, we show credits with:
- An estimated $/yr amount, which may be less than face value if the credit is hard to use.
-
A reset label:
(Cal)for calendar‑year credits or(Mem)for cardmember‑year credits.
Be honest with yourself here. A $200 credit you’ll use 30–40% of the time is not really worth $200 to you.
6. See How It Fits Your Existing Wallet
Don’t evaluate a new card in isolation. Think about how it fits into your current setup.
Questions to consider:
- Overlap: Does this card just duplicate rewards you’re already getting, or does it meaningfully improve a weak spot?
- Coverage: Does it fill an obvious gap—for example, better grocery rewards, better travel protections, or more flexible points?
- Portfolio balance: Are you tilting too heavily toward one issuer or one rewards currency, or does this card add useful diversification?
In SpendAndReward, you can compare how a new template card would perform at merchants you already care about, relative to the cards in your wallet. If the “new” card rarely beats what you already have at the places you spend most, it might not be worth it.
7. Consider Complexity and Time
Rewards are only valuable if you can actually manage them.
Ask yourself:
- How many different cards do you realistically want to track?
- Are you comfortable remembering category bonuses and credits for one more card?
- Will this card require extra monitoring (for example, expiring credits, rotating categories)?
Sometimes, it’s better to keep a simpler setup you can run on autopilot than to add a slightly higher‑earning card that turns your wallet into a project.
8. When to Pass on a “Great” Offer
There are plenty of situations where it makes sense to pass on a card, even if the numbers look good on paper.
It may be wise to say “not now” if:
- You’d have to stretch your normal spending to meet the minimum spend requirement.
- The credits are difficult to use in your real life.
- The annual fee feels uncomfortable, even after counting realistic value.
- You’re working on a different financial priority (paying down debt, building savings, etc.).
- You’re already juggling more cards than you want to manage.
A good mental test:
“If this offer came back again in a year, would I be okay waiting?”
If the answer is yes, you don’t need to force it right now.
9. Using SpendAndReward to Sanity‑Check a Card
SpendAndReward can’t make decisions for you, but it can make the math less fuzzy.
When you’re looking at a potential new card, you can:
- Check the card on the Explore Offers page to see our estimate of first‑year value.
-
Expand the Credits breakdown to see how much value we assume from each credit
and whether it resets on a calendar year (
Cal) or cardmember year (Mem). - Compare the new card’s performance at merchants you already use against the cards in your wallet, using merchant search.
After that, it comes back to your goals and comfort level:
“Does this card clearly earn its place in my wallet—both in Year 1 and beyond?”
If the answer is yes, you can apply with more confidence. If not, it might be better to wait for a different offer that’s a cleaner fit.
You can get started by exploring current offers and trying a few merchant searches in the app: spendandreward.com .