Are High Annual Fee Credit Cards Worth It?

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I’ve long been on record as saying many credit cards are worth the annual fees because of the ongoing value they can provide. In general, I tend to look at three factors when evaluating a credit card:

  • The sign-up bonus
  • The value the card gives you for everyday spend
  • Any bonuses you may get for having the card long term

If there is marginal “value” in the last two categories that offsets the credit card annual fee, then I’ll keep the card year after year. For some cards, the annual fee is low enough to be a no-brainer. I get far more than $75 of value out of the companion certificates on the Alaska Airlines Visa Signature® Credit Card, for example.

But what about the credit cards with high annual fees? Do the perks and benefits offset spending $300-$500 per year?

I’ll share my thoughts on a handful of the top travel-related cards, and discuss whether or not I think the card is worthwhile.

American Express Platinum Cards

The American Express Platinum cards set the standard for “elite” credit cards, in my opinion. There are a few varieties of cards, all of which offer waived foreign transaction fees and the ability to earn Membership Rewards points.

The Platinum Card® from American Express and Mercedes Benz Platinum Card from American Express  have a annual fee of $550, while the The Business Platinum® Card from American Express OPEN has a $450 annual fee. All three cards offer the following perks:

  • Lounge access with Delta when traveling on Delta-operated flights, Priority Pass, and others, including Centurion Lounges
  • Access to American Express Fine Hotels & Resorts
  • $200 a year in statement credits for airline incidental fees like checked bags fees, flight-change fees, and snacks (you need to enroll and select a qualifying airline)
  • Access to the Platinum Card Concierge for assistance with travel and dining
  • Unlimited Boingo Wi-Fi at more than 1,000,000 Boingo hotspots worldwide
  • Fee Credit for Global Entry or TSA Pre✓

I always have either a personal or business version of the Platinum card. The lounge access and Amex FHR benefits more than make up for the annual fee in my case, so the other perks are just icing on the cake.

AmEx-Centurion-Lounge-LGA-Airport-06
American Express Centurion Lounge at New York La Guardia

It’s also worth noting that none of these cards are particularly lucrative for everyday spend. If you want to accrue Membership Rewards points more quickly, look at a card that offers bonus points on certain categories, like the Premier Rewards Gold Card from American Express and American Express EveryDay® Cards.

Citi ThankYou Prestige

The Citi Prestige® Card has a $450 annual fee, and does offer bonus points on certain categories:

  • 3x points on air travel and hotels
  • 2x points on dining at restaurants and entertainment
  • 1x point for everything else

In terms of benefits, the Citi Prestige Card has no foreign transaction fees. It also comes with the following perks:

  • American Airlines Admirals Club® lounge access
  • Priority Pass Select membership
  • $250 annual airline fee credit
  • $100 Global Entry application fee credit

Most importantly,Citi Prestige® Card holders can transfer their ThankYou points to airline partners. So if you have other ThankYou cards like the Citi ThankYou® Premier Card or Citi ThankYou® Preferred Card you can combine your points prior to transferring to an airline partner.

Citi Executive AAdvantage World MasterCard

The Citi Executive® / AAdvantage® World EliteTM MasterCard® is probably the most notorious credit card of 2014, given the insanely lucrative offers from earlier this year.

In terms of keeping the card long term, the $450 annual fee also comes with the following perks:

  • First Checked Bag Free
  • American Airlines Admirals Club® Membership
  • 25% savings on eligible in-flight purchases on American Airlines and US Airways flights
  • Priority check-in and boarding
  • 10,000 AAdvantage® elite qualifying miles when you spend $40,000 in a calendar year

The card also offers 2x AAdvantage miles on eligible American Airlines and US Airways purchases, and no foreign transaction fees.

This honestly isn’t a card that I think it makes sense to keep long term. Unless you’re desperate for the Elite Qualifying Miles you’re probably better off with the Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard® and CitiBusiness® / AAdvantage® Platinum Select® World MasterCard.

United Club Cards

These cards come in two versions, the United MileagePlus® Club Card from Chase and United MileagePlus® Club Business Card. Both cards have a $395 annual fee, no foreign transaction fees, and the following perks:

  • United Club membership
  • Premier Access travel services
  • Free first and second checked bags
  • 2x per dollar spent on tickets purchased from United
  • 1.5x per dollar spent on all other purchases

Firstly, by having a co-branded MileagePlus credit card, the Premier Qualifying Dollars requirement for Premier Silver, Premier Gold and Premier Platinum qualification is waived if you spend at least $25,000 on the card in the year. The United MileagePlus® Explorer Card also offers this waiver, which might be a better option if you’re turned off by the high annual fee.

All co-branded MileagePlus credit cardholders have “last seat” availability when redeeming miles for standard awards. That’s not something I’d ever recommend doing, but it’s worth mentioning, because nowadays even finding “standard” level availability isn’t a guarantee.

In general though, I don’t think these cards are especially compelling outside of the lounge access. If you’re just hoping to earn United miles, Ultimate Rewards cards are going to be more lucrative, and theUnited MileagePlus® Explorer Card will still give you the PQD waiver.

Delta Reserve Cards

Delta offers an astonishing assortment of co-branded cards, with the Delta Reserve Credit Card from American Express and Delta Reserve for Business Credit Card being the “premium” cards.

Both cards have a $450 annual fee, along with the following:

  • 24/7 Delta Reserve Concierge
  • Delta Sky Club lounge access
  • 20% In-Flight Savings in the form of a statement credit on food, beverages, and entertainment when you fly Delta
  • First checked bag free on every Delta flight

The major value from these cards comes in earning Medallion Qualifying Miles based on your credit card spend. Both the personal and business versions offer 30,000 bonus MQMs after spending $60,000 in a calendar year, and you receive 30,000 bonus redeemable miles as well. So with some strategic spending you can actually earn Delta elite status just through credit cards.

The Ritz-Carlton Rewards Credit Card

The Ritz-Carlton Rewards® Credit Card is a bit of an outlier, as most hotel credit cards don’t have such high fees (or the associated benefits). The annual fee is $395, and along with waived foreign transaction fees you receive the following perks:

  • $300 airline fee credit
  • Three upgrades to the Ritz-Carlton club level annually
  • $100 hotel credit for stays of two or more nights.

It’s also easy to accrue elite status in the Ritz-Carlton program with this card:

  • You receive Gold Elite status for the first year of membership
  • You receive Gold Elite status for any subsequent year in which you spend at least $10,000 on the card
  • You receive Platinum Elite status for any year in which you spend $75,000 on the card (this is probably not worth it)

Ritz-Carlton-Hong-Kong
Views from Ritz Carlton Hong Kong

The fact that the card has a $395 annual fee and comes with a $300 airline fee credit is awesome, and when you add in all the other benefits this is a pretty compelling card, especially for the first year. If you frequent Ritz-Carlton properties the annual fee is probably justified.

Bottom line

Unlike cards such as the American Express Centurion or Visa Black Card, I think the high annual fees are justified in most of these cases, and some of these cards can certainly be worthwhile depending on your personal situation.

Do you have any cards with a high annual fee? Are the benefits worth the cost?


The information for the Mercedes Benz Platinum Card from American Express, Citi Executive® / AAdvantage® World EliteTM MasterCard®, United MileagePlus® Club Card from Chase, United MileagePlus® Club Business Card, Delta Reserve Credit Card from American Express, Delta Reserve for Business Credit Card, and The Ritz-Carlton Rewards® Credit Card have been collected independently by One Mile at a Time. The card details on this page have not been reviewed or provided by the card issuer.

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Comments

  1. i have business gold reward amex.
    i got $150 credit for paying my at&t bill and will get $30 credit from the last SB saturday promo.
    so amex paid me $5 this year to use the card, not to mention all the MR points i have been awarded.

  2. So do you think the Citi ThankYou Prestige card is worth it, or no?

    With regard to the Ritz Carlton card, the benefits are actually good at Marriotts, so the card can be beneficial if you stay at Marriott properties.

  3. Delta Reserve cards also include a free companion FIRST CLASS ticket each year, beginning with first anniversary. That is worth more than $450 to me! Anything to keep FCQ happy… 🙂

  4. It’s worth pointing out that the $300 airfare credit on the Ritz card is per calendar year. Therefore, you can actually have a net gain on the annual fees (depending on how long you keep it). 1 year spanning 2 calendar years equals a net gain of $205.

  5. The Ritz Carlton card also include a Lounge Club card for the cardholder and for each authorized user.

  6. I’m getting ready to cancel my Amex Plat card. I’ve already got GE so that benefit means nothing to me. I actually did use the $200 in airline fees benefit this year, but it’s not worth $250 for the rest of what it offers. I’ve got the Amex Everyday Preferred card for MR points now. So the plat card is just too expensive to hold onto.

  7. @ Miles — All depends on the person, I think. There’s certainly value to the card. For example, it has a $250 annual fee credit, so that essentially lowers the annual fee to $200 as far as I’m concerned. If you value Admirals club access, that’s about the cheapest way to do it. But purely in terms of the sign-up bonus and for someone that wouldn’t frequently access the Admirals Club, I don’t really think it’s worth it.

  8. Thanks for the solid review of expensive cards. I have had the Ritz card now for two years and use it overseas because it is also a chip card. In addition, it includes Priority Lounge Pass access and this year will include an additional 10% in points based upon annual spend.

  9. I got the Ritz card this year with their 140k points offer. And getting 240 bucks in airline fees and Global entry fee back this year.. an other $300 available next yr.. before renewal is due in august. .. even with $395 fee(basically $95 out of pocket). i am keeping this card… Not that i stay at the Ritz all the time but i may once next yr to splurge on my wife. Marriott Gold should be easily achieved for just 10k spend.

    Looking for 1 more high end card… Maybe get some AA EQ miles..I missed out on the 100k offer… Lucky do you think anytbing above 50k offer will come back?

  10. I think it’s strange (and a little funny, too) that the Citi Prestige gets you into the Admirals Club, but you can’t transfer the points to AA.

  11. re: Amex Platinum Global Entry fee reimbursement

    Lucky, any insight into how renewals will be handled? The GE granted is only valid for five years, which means a $100 per 5 years fee reimbursement would be tricky. Most of us will renew in less than 5 years to ensure seamless renewal.

    thanks

  12. @ colleen — The terms do state it’s valid once every five years, though I’m not sure how strictly that’s enforced (ie, would you be eligible 4.5 years later, etc.). Sorry!

  13. Of course they are worth it!! Click here!!! Let me earn hundreds off your good credit while I sit in F and knock out another filler post full of CC affiliate links.

  14. Worth pointing out that AFAIK the Visa Black Card costs $450 per year and is fairly similar to the Amex Platinum (though with a less comprehensive set of benefits) — it’s definitely not in the same league as the Amex Centurion card.

  15. I personally do not think most are worth it. Maybe if you fly very frequently or for work but for the occasional traveler they are not worth it. There are so many great credit cards that waive the annual fee the first year so I focus on those cards. After the first year I either cancel my cards or call for a retention bonus. In over 2 years I have only paid one annual fee (Chase Sapphire Preferred).

  16. Lucky – You forgot to mention to big things about the Prestige that have me seriously considering it as an American flyer with a spouse that primarily flies on paid leisure tickets:
    1. Prestige Card owners can use points for 1.6 c per point toward travel on AA which is probably close to what most people value the miles at anyway.
    2. The Priority Pass that comes with the Prestige Card comes with free guest access (2 I believe) which is something the Amex Plat does not have….

  17. I’ve cycled through all the Amex platinum cards over the last 3 years, the personal one, Mercedes Benz personal and now the business one. Gotten bonuses for each signup. My business one comes up for renewal in a couple months. I don’t really put any regular spend on it because there are no category bonuses and I use other cards for better value everyday spend. I don’t fly Delta so the only real value I get out of it is priority pass lounges which I probably “value” around $200 a year. So I’m on the fence whether or not I wanna renew it (basically paying $450 and getting $200 back in 2016). What’s the possibility of any kind of retention bonus on those cards?

  18. I am thinking about canceling my Amex Platinum card to reduce over all fee foe all of my credit cards. I use personal gold card more because of multipliers for everyday spends along with (many) Chase URPs and 2 Citicards. So I don’t see the point of keeping this.

    Here are some benefits I think I no longer need:
    -I fly AA and UA a lot and get lounge access with them because most of my flying in international.
    -I have AS MVP gold but since they reduce earning rate through DL, I will fly DL a lot less.
    -Since I fly DL a lot less, using DL lounge will be a lot less.
    -Since I want to lose weight. The airlines fee benefit for food purchase on board DL (for crappy domestic food) is no need. I have AA EXP and UA 1K status which cover pretty much when I fly AA and UA to upgrade me to domestic F and int. J.
    -I do not spend that much on hotels (short trips), and I stay with friends around the world 30% of the time.

    Can someone tell me the reason to keep it?

  19. Platinum fees hit this week, called for a retention bonus, offered 25,000 miles plus I can pay my annual fee with 45,000 points. I accepted the 25,000 miles and am on the fence with the fees….

  20. @ KevininRI — Can’t hurt to try, but if you haven’t put much spend on it and/or aren’t a longtime card member, I wouldn’t count on anything, necessarily.

  21. What makes the AMEX Platinum card worth it for me (in addition to what you’ve mentioned) is the extended warranty for items purchased with it. About once every other year I need to invoke that feature, and it more than pays for the card’s cost (after the $200 airline rebate). You know how multifunction printers will fail exactly one day after the warranty has expired? Yup, it has happened to me twice in the last five years. And AMEX has bought me a new printer each time, no questions asked.

  22. You conspicuously omitted the JPM Palladium card. Of course, few can qualify. The $595 AF is a bit steep but often can be offset by your Chase banker. The card comes with 2x Chase UR points for travel, Lounge Club and UC access, and benefits that are valuable to those of us who travel internationally like free medevac and travel cancellation insurance, primary car rental insurance, etc. Ever price Medevac or do you just roll the dice on all your far flung trips?

    To be fair you can get similar lounge benefits and a lower AF with the Chase Ritz and United Club cards – but these cards offer less value to many elites that already receive the hotel and airline perks via status.

  23. AMEX Platinum is now firmly planted in my arsenal due to all the crazy AMEX offers that pay for the card again and again………Is Citi going to give me 400k to renew those 4 cards…..no, no, no and no…………….

  24. I invest in Vegas for extra moolah. So my favorite thing to do is fly cheap Spirit airlines using the Virgin America lounge before the flight to Vegas.

    When at LAS, I place bets using a Nevada only mobile app, while enjoying the Centurion lounge breakfast or lunch.

    Then after a few stops around town. I visit the Centurion lounge again for lunch or dinner on my way back home the same day.

    So AMEX Platinum is a keeper for me. When they open the Miami lounge, I’ll get even more use out of it.

    Cheers

  25. I think it’s worth nothing the prestige card gives a free night for any 4 consecutive payed nights at hotels. I find it to be a major factor and in my case is worth $100-$200 annual value.

  26. I have to chuckle at your weblog. The first card review is really thorough, and then as I read down, the later reviews become progressively less thorough. Gee, I think I can tell which cards you use most in real life.

    This post reminds me of a card forum I was on many years ago, and a bunch of young adults were ranting about the stupid AF for the Platinum Amex. Then a real road warrior came along and pointed out that he got more savings than the AF from just one stay at a Mandarin Oriental, and he traveled every month.

    My point is that I will not say the cards are not “worth” their AF. They are clearly worth it for a select few frequent flyers. However, they are not worth the AF for 99.99% of the general population. Plus, now that American Express has MR cards with no AF, it is especially hard to justify paying an AF to AmEx.

    I suspect most people who carry these cards are won over by the “prestige” (yuck!) not the actual benefits. Doubt me? Just look at the hordes banging on the American Express door to get the Centurion Card.

  27. Hey Lucky, thanks for this timely insight.

    I currently have the amex prg, would I get the sign up bonus for the Mercedes Plat if approved?

  28. @ Hank — Best I can tell, the restriction is as follows:
    “Welcome bonus offer not available to applicants who have or have had a Platinum Card® account enrolled in the Membership Rewards® program.”

    So you should be fine.

  29. I have had the AMEX Biz Plat for a decade and have not minded the relatively steep annual fee because it has easily paid for itself, year after year. I particularly like the relative flexibility of the Membership Reward points since I can use them to supplement points in other linked accounts; priority pass has come in handy in allowing me to gain lounge access in some remote airports (e.g., SYX in South China Sea) with no major alliance lounges; and I have taken full advantage of the yearly $200 statement credit for airline incidentals. Also very cool was that AMEX retroactively gave me a $100 statement credit for Global Entry, even though I had obtained it as one of the people invited by CBP to pilot the program back in 2009, i.e., 3 years before AMEX started giving credit for it. Now, thanks to this blogpost, I just learned that a new Centurion lounge has opened at LGA, my home and “default” airport, which greatly adds to the value of my AMEX Biz Plat…;-)

  30. @Lucky, not to be argumentative but in bold under “OFFER TERMS”

    “If we identify you as currently having an American Express Card account, you may not be eligible for this welcome bonus offer. This offer is also not available to applicants who have or have had a Platinum Card account enrolled in the Membership Rewards program.”

    I just don’t want to screw up and miss out on the offer. Especially it’s now once in a lifetime for the welcome bonus.

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