One of the things we hear from many readers is their reluctance to pay an annual fee on a credit card. Obviously, it would be cool to have no annual fees or at least waive them all the first year. Sadly, that is not usually the case. This post is a reminder not to let annual fees keep you from getting credit cards. There are several reasons that it can be worth it to pay an annual fee.

 

Welcome Offer

It is always worth paying an annual fee for the welcome offer. Let’s say I get a welcome offer of 60,000 points for the Chase Sapphire Preferred Card. I can do multiple things with those points.  My sister used 70,000 points to book a one-way business seat to Greece. She transferred Ultimate Rewards to United to book them. That seat would normally cost $5,586. She got it after signing up herself for that card and referring her husband for it.  I think the $95 annual fee is worth that welcome offer, right?

Maybe you just plan to use points for domestic travel. You could get at least 2 domestic roundtrip tickets for those points. In this example, if I wanted to take my family from Denver -San Diego, we could go for about 62,000 points and under $50 in taxes and fees. I feel like that $95 annual fee is totally worth it here, too! I would normally have had to pay over $800 for these tickets. (These are saver awards, so you must be a United cardholder to receive this discount.) However, you could get two RT tickets without using a saver award.

 

 

 

 

 

Consider the Benefits of the Credit Cards

Paying that annual fee is often worth the benefits you get from the card. I have kept my United Explorer card for years, even without the welcome offer. I pay $95 a year, and this is what I get:

• Free first-checked baggage
• Priority boarding
• 2 United Club passes a year

 

I travel United a lot for a couple of reasons. First, I live near a United Airlines hub and get many direct flights. Two, because I fly one airline consistently, I have Platinum Elite status, which means I get upgraded to Economy Plus on every flight. This is worth it to me.

If I had to pay for checked baggage every time I flew, it would cost me hundreds of dollars a year. I like priority boarding so I can get settled in for a flight, and the 2 club passes are worth $59 each. My annual fee of $95 is totally worth it.

 

 

Hotel Credit Cards

As we’ve said before, we keep our hotel cards year after year. The benefits of a hotel card outweigh the approximately $100 annual fee we pay them. Some of my benefits include the following:

• Free annual night certificate – I always use it for a stay that costs more than my annual fee
• Enhanced wi-fi
• Late check-in
• Upgraded room, if available
• Hotel status

 

 

 

 

 

High Annual Fee Cards

I even find it worthwhile to keep credit cards with high annual fees. For instance, my American Express Gold Card has an annual fee of $250. With that card, I get:

• $10 GrubHub credit monthly – $120 yearly value
• $10 credit for Uber rides or Uber Eats – $120 yearly value
• 4x points on grocery stores and restaurants – I get a ton of points this way

My $250 annual fee with this card is totally made up by the benefits I get. Don’t be afraid of annual fees. Even high annual fees.

 

 

One of our favorite cards with an annual fee is the Capital One Venture X Card. But wait, the annual fee is a whopping $395! How do I justify that? Why do we think it is a no-brainer?

• $300 travel credit
• 10K Venture miles every anniversary (worth $100 at least)
• Great lounge access
• TSA or Global Entry credit
• Great travel insurance and cellphone insurance

 

 
These benefits totally cover our annual fee. In addition to the fact that you earn a flat 2 cents per dollar on every purchase, it is 100% a card that we are willing to pay a rather high annual fee for.

I am even willing to pay $695 for my American Express Platinum Card because I get way more benefits from it than the cost of the annual fee. I get that most people won’t do that (Alex and Jess), but it is one of my favorite cards!

 

Bottom Line

Initially, an annual fee for a credit card sounds horrible. Don’t forget that most credit cards offer benefits to you for paying those annual fees. Those benefits make it worth paying a credit card annual fee. Do not write off a card because of an annual fee, even a high one. Do your homework and see which ones are worth paying for even after the year you get the welcome offer. It can be worth it to pay an annual fee, which we do on several of our cards. What card are you willing to pay an annual fee for?

 

Related Posts

• $395 Annual Fee for the Capital One Venture X is a No-Brainer
• Credit Card Annual Benefits
• Credit Card Benefits You Might Be Missing Out On