If you browse any credit card forum, you will quickly notice an obsession with Life-Time Free (LTF) cards. There are innumerable queries about how to get one, and countless show-off posts when someone gets a premium card without any annual fees.

I get the appeal—after all, who doesn’t love free stuff? But when it comes to credit cards, overemphasising on the LTF status can be financially misguided.

Understanding True Credit Card Value

The real value derived from a credit card can be thought of as:
Value = Rewards Earned - Joining/Renewal Fee Paid - Opportunity Cost (of not using another card) - Maintenance Overhead (of owning and managing the card)

As long as the value obtained is positive and meets your personal threshold, it should not matter whether you are paying the annual fee or not—it is worth having the card in your wallet.

Of course, all else being equal, getting the same card as lifetime free is strictly better than paying the fees. The problem arises when people do not consider taking a card—even if it provides incredible value—because it is not LTF. They end up leaving significant money on the table just because of an aversion to annual fee.

For instance, consider HDFC Infinia, one of the most premium and talked about cards in India. Someone who has sizeable spends on flights, hotels, or an ever growing list of brands, can comfortably save tens of thousands every year by using Infinia well. But you’ll still find people on Reddit and credit cards forums who claim to have been offered Infinia but are debating whether to get it or not because it wouldn’t be LTF! 🤷

The Hidden Costs of Free

What often gets ignored in the LTF debate is the maintenance overhead—hard to quantify but very real. Attracted by the LTF status, many people accumulate too many cards that just end up gathering dust.

If you use a card only occasionally, say to benefit from a specific offer, you need to keep a track of its bill due date and ensure timely payment. This becomes harder with each new card that you add to your collection. One missed payment can not only wipe out an entire year’s worth of rewards but also hurt your credit score.

Spreading your spends over multiple cards also makes it difficult to reach premium/elite status with any single financial institution. This can cost dearly in the long run if upgrading to a premium card requires a substantial spend history on the existing card.

Another subtle aspect is the cognitive overload of tracking ongoing offers across different cards while trying to maximise each one. It can surely save money but it can also be mentally taxing.

A Balanced Approach

A small but well-thought card portfolio can avoid these issues while still providing incredible value. For instance, over the last six years, between my wife and I, we have held only 4 different card types (HDFC Diners Black, Standard Chartered Ultimate, Axis Magnus, HDFC Infinia) but only 3 at any given point. Only one out of the 4 was LTF (Diners), and we eventually closed it in favour of one that had an annual fee but offered better value (Infinia).

Ultimately, the true value of a credit card lies in its net benefits, not its fee status. Don’t let the appeal of ‘free’ deter you from cards that offer significantly more value in the long run.