Using premium credit-card rewards is becoming a part-time job

Eric and Charlene May have an arsenal of 14 credit cards for which they pay about $2,600 in annual fees. To make sure they come out ahead, they diligently update a color-coded Google Sheet as they redeem the cards’ dining, travel and shopping credits.

On a recent trip to New York City, they splurged on an omakase dinner and logged it in their spreadsheet on the subway ride back to their hotel.

“Sometimes it can be a bit of a buzzkill," said Eric May, a 36-year-old in Columbus, Ohio, who works at a financial-technology company.

Premium cards are pitched as keys to a world of luxury, with airport lounges, exclusive shopping credits and personal concierges. Most U.S. consumers pay more in credit-card interest than they get in rewards. But for the few who try to take advantage of everything they are entitled to, the cards can feel more like a part-time job than a lifestyle upgrade.

That job has been getting harder lately. To justify raising the annual fees on premium cards, banks have been packing them with additional perks. But instead of juicing cards’ cash-back percentages or points multipliers, issuers have offered more in credits that can be redeemed only with certain merchants. Those credits cost banks less but come with technicalities that suck up consumers’ time.

Few people use all that their cards offer. Of the more than $40 billion that U.S. cardholders earned in rewards in 2022, more than $33 billion went unclaimed, according to the latest data from the Consumer Financial Protection Bureau.

When Eric May orders an Uber, he has to pull up the spreadsheet on his phone to figure out which credit card to use. Several of his and his wife’s cards come with Uber credits.

Making matters more confusing, each one works differently. Some can be used only for Uber rides, others for Uber Eats and one, he thinks, covers only airport trips.

Certain credits are parceled out quarterly or even monthly, and premium cards can have the feel of a coupon book. But Eric finds the effort is worth it. The spreadsheet indicates that he and his wife are receiving about $900 more in credits than they pay in fees.

Americans on average have about seven credit cards and use about four of them, according to credit bureau Experian. People who pay more than $250 in annual credit-card fees make up less than 15% of all cardholders, according to Bank of America.

People tend to focus on statement credits but overlook points-redemption programs when trying to figure out whether to sign up for a high-fee card, said Tiffany Funk, founder of rewards-tracking site point.me. She also said they overvalue less-quantifiable perks like exclusive reservations at restaurants.

“For a lot of these premium cards, if you don’t live in L.A., New York, San Francisco, it’s harder to take advantage of all the different merchant credits," she said.

American Express raised the fee on its Platinum card by 29%, to $895, in September. A few months earlier, JPMorgan Chase hiked the cost of its Sapphire Reserve card by 45%, to $795.

Some reward seekers are starting to rethink the math. Rachel Birk, a 28-year-old pricing manager in Chicago, and her husband decided to downgrade or close some of the 14 credit cards for which they were paying nearly $4,000 a year.

“Before, we could get away with saying, ‘Maybe we recoup things, maybe we don’t,’ but it’s gotten too expensive now," she said.

Birk and her husband’s strategy going forward is to not bother with credits that don’t fit their existing spending. She expects to reap about $1,300 in perks from her $895 Amex Platinum card next year—well below the roughly $3,500 in advertised value. For example, even though she could get reimbursed for a $155 Walmart+ membership, she is skipping it because she doesn’t shop there.

For Eric and Charlene May, higher fees are a motivator to get their money’s worth. When they realized they weren’t using their full entertainment benefit, they offered to cover Charlene’s brother’s Audible subscription. When Eric needs new clothing, he buys from Lululemon first to use his quarterly $75 credit.

He is already thinking about the next upgrade.

The $5,000 annual fee for the Amex Centurion card, better known as the Black card, is too much for May to stomach, but he would welcome an option between his current Platinum and the Black card.

“If they had the right offer, I’d pay even more," he said.

Write to Imani Moise at imani.moise@wsj.com