As consumers approach the new year, they will be inundated with articles to help them with New Year’s resolutions.

Like dieting and weight loss, budgeting and saving are annual traditions. While many will make no changes despite those resolutions, it is a key time of year for consumers to rework their financial services options. Card issuers have just a few weeks to influence decisions to cancel or acquire cards and to gain that coveted top-of-wallet spot.

When consumers approach these decisions there are a few decisions that will drive them, Do the benefits and rewards of a card outweigh its annual fee (if there is one)? Can I downgrade my existing card to avoid a fee? How will changing cards affect my credit score? Will getting rid of this card drastically decrease my available credit limit?

Co-branded cards have more complex economic agreements, but benefit (or suffer) from the consumer’s relationship with the co-brand. A big fan of a particular airline or hotel will likely not cancel a credit card, even if it is infrequently used. Key benefits, such as free checked baggage or hotel elite status, go a long way to counterbalancing annual fees. 

Wallaby’s independent analysis of the value of these amenities finds that most travel cards with annual fees have value to the consumer that far outweighs the annual fee. Issuers should ensure that their cardholders are aware and informed of all the benefits. While your legal team might give you a hard time, we encourage issuers to draw pictures for users and describe the value of each benefit in an annual e-mail or paper summary to encourage users to retain a card and move it up in the wallet.

The start of the year is also a great time to provide a bonus to cardholders for an existing relationship. The industry is very focused on strong acquisition bonus offers (which we also recommend), but providing a 1,000 point bonus for spending $1,000 on an existing card over 90 days is an affordable investment in a longer-term consumer relationship.

As a fallback, most issuers do have a no-annual fee version of most offerings. Many consumers will be counseled by personal finance experts to call in and ask about this transition. While not ideal, retaining a customer at lower value is probably better than losing them. Issuers should ensure call center training is up to date for handling this case.

Financial New Year’s resolutions often include a plan to improve a user’s credit score. With more issuers providing free access to FICO and a plethora of free score options, such as those from, consumers are more informed than ever.  They know that lenders in the U.S. most often use the FICO score to determine a consumer's credit score. Consumers know that length of credit history takes up 15% of the FICO score calculation, coming only after payment history (35%) and amounts owed (30%).

This means that consumers know that retaining their most-senior credit card and their cards with the highest limits is a good idea. It’s not clear that consumers can quickly figure out which cards those are.  Issuers should communicate to users key summaries about their accounts, highlighting cards with high limits and cards with histories over 10 years.

By using data from existing customer accounts and understanding how users will evaluate their wallets, issuers can have a significant impact on retention and top-of-wallet position through targeted communication and offers to existing users. To put a spin on a holiday sentiment, it is better to retain than to churn.

Matthew Goldman is CEO of Wallaby Financial.