It Can Be Worth it to Pay An Annual Fee


One of the things we hear a lot is people’s reluctance to pay an annual fee on a credit card. Obviously, we’d love there to be no annual fees or at least to have them all waived the first year. Sadly, that is not usually the case. The key to this post is a reminder to not let annual fees keep you from getting credit cards. There are several reasons that it can be worth it to pay an annual fee.


Signup Bonus

It is always worth paying an annual fee for the signup bonus. Let’s say I get a signup bonus of 60,000 points for the Chase Sapphire Preferred Card. I can do multiple things with those points.  My sister just 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 that the $95 annual fee is worth that signup bonus, don’t you?

Maybe you just plan to use points for domestic travel, and you could get at least 2 domestic roundtrip tickets for those points. In this example, if I wanted to take a family member from Denver -San Diego, we could go for about 55,000 points and under $30 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 $600 for these tickets.



Screenshot of United airline ticket costs


Consider the Benefits of the Credit Cards

Many times, paying that annual fee is worth the benefits you get from the card. I have kept my United Explorer card for years, even without the signup bonus. 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. One, I live near a United Airlines hub, so I get many direct flights. Two, because I fly one airline consistently, I have Gold 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 $50 each. My annual fee of $95 is totally worth it for me.



Hotel Credit Cards

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

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


Hotel room

I can use a 35K certificate at this Westin in San Diego!


High Annual Fees

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 dining credit good at select restaurants – $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.


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 signup bonus. Honestly, it can be worth it to pay an annual fee, and we do on several of our cards.



Beach and sand

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  1. […] are some other great credit cards that I recommend. They have higher annual fees, but the benefits often reduce that amount. I would also recommend business cards […]

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