Scared of Annual Fees?

Many of the best travel cards out there have annual fees which may put off a lot of people. They can range anywhere from $95 a year for the Citi Strata Premier all the way up to $695 for the American Express Platinum. Depending on your spending and travel habits the benefits of these cards can more than make up for the annual fees. If we just factor in the signup bonus alone on the Citi Strata Premier (75,000 points that I value at $1,275), it would take over 13 years of annual fees to reach the value of the signup bonus. This isn’t factoring in the bonus points you earn on all their great spending categories or the $100 hotel credit you get from the card each year. Even if you only utilize the hotel credit, you’re coming out $5 ahead each year.

The American Express Platinum is probably the most well-known premium travel cards out there and for a good reason. While this card isn’t one I typically put much spending on throughout the year it is one that I keep for all the great benefits that are offered such as:

·       $200 annual Uber credit

·       $200 annual hotel credit

·       $200 annual airline fee credit

·       $189 annual CLEAR credit

·       $100 annual Saks credit

·       $240 annual digital entertainment credits

·       $300 annual Equinox credit

·       $300 annual Soul Cycle credit

·       $155 annual Walmart+ credit

·       Airport lounge access

·       5x on airfare

I probably wouldn’t spend any money at Saks or have a Walmart+ subscription if I didn’t have this card and I don’t use the Equinox or Soul Cycle credits. Factoring in all the other credits I’m getting a minimum of $1,029 a year. That’s not to mention the 5x points on airfare as well as access to all the great lounges Amex lets you in to just for having the card.

So, as you can see, even though this card has a massive annual fee, you can more than make up for it by holding on to the card or other like it. This is the same with many other cards that have an annual fee. If you know how to use them properly, paying the fee can make a lot of sense if you get outsized value from the card.

Many families of cards have different levels of fees and also perks corresponding to those fees. Take for example these American Express cards that all earn the same Membership Rewards points:

·       Everyday- $0

·       Everyday Preferred- $95

·       Green- $150

·       Gold- $325

·       Platinum- $695

I personally have the Everyday Preferred, Gold and Platinum. They all have their own place in my credit card strategy which can be different for each person. Could I get the Everyday and/or the Green? Of course, but it doesn’t fit in with my overall strategy for how I like to maximize the points I earn. The earning structure on those cards coupled with the annual fees overlap with other cards I have in my wallet so it doesn’t make sense for me to pick those up at this time. This is pretty similar to how Chase, Citi and Capital One work with their entry level, mid-tier, and premium cards.