How Much Do I Spend Per Year On Credit Card Annual Fees?

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Understandably, a lot of consumers try to avoid credit cards with annual fees. Nobody wants to pay unnecessary fees, though I think a lot of people are under the wrong impression that credit cards with annual fees aren’t worth it. While that’s sometimes true, paying an annual fee can be a small and worthwhile investment that can get you a big return. You just have to understand the benefits and know what you’re doing.

For example, I spend over $2,000 per year in credit card annual fees, and think it’s more than worthwhile. In this post I’ll share the cards with annual fees I hold onto long term, and why I do so. To keep things simple I’ll share the core of why I hold onto each card, rather than all the reasons.

Here are the cards, from the highest annual fee to the lowest:

Chase Sapphire Reserve℠ Card

Annual fee: $450

Why I pay the annual fee on this card: I recently upgraded this card from the Chase Sapphire Preferred® Card, which I consider to be the all around best mid-range card. While the Reserve has a $450 annual fee, you receive a $300 annual travel credit, which I view as being worth face value. So the real out of pocket on this card is $150 per year, and that gets me triple points on dining and travel, increases the value of my Ultimate Rewards points, etc.

The Platinum Card® from American Express

Annual fee: $450

Why I pay the annual fee on this card: This is a card I historically haven’t put much spend on, though find to be worthwhile. It’s a card I have primarily for the perks, including a $200 annual airline fee credit, as well as access to Centurion Lounges, Delta SkyClubs, Boingo Hotspots, and more.

I value the $200 airline credit almost at face value, so this is basically like paying $250 per year for Centurion Lounge access and more, which I find to be worthwhile. On top of that, the card now offers 5x points on airfare purchased directly with airlines, so it’s the card I use to maximize my airfare purchases.

Citi Prestige® Card

Annual fee: $450

Why I pay the annual fee on this card: The card has a $250 annual airline credit, which is worth face value to me. Therefore my real out of pocket on this card is $200 per year. The card offers a fourth night free hotel benefit that saved me over $2,000 last year, so I still consider this to be one of the all around most valuable credit cards.

JetBlue Plus Card

Annual fee: $99

Why I pay the annual fee on this card: The card offers 5,000 bonus points on your account anniversary each year, which I value at ~$75. So the real out of pocket on this card is ~$25. For that you’re getting a free first checked bag, and a 10% refund on JetBlue points redemptions. Given my balance of JetBlue points, that 10% refund more than offsets the annual fee.

The Amex EveryDay® Preferred Credit Card from American Express

Annual fee: $95

Why I pay the annual fee on this card: This is a card I hold onto for the return on everyday spend that it offers. The card offers:

  • 3x points at U.S. supermarkets, up $6,000 per year
  • 2x points at U.S. gas stations
  • A 50% points bonus when you make at least 30 purchases per billing cycle

That means if you make 30 transactions per billing cycle you earn:

  • 4.5x points at U.S. supermarkets
  • 3x points at U.S. gas stations
  • 1.5x points on everyday purchases

That’s an amazing return that really helps me maximize my Amex points.

Starwood Preferred Guest® Credit Card from American Express and Starwood Preferred Guest® Business Credit Card from American Express

Annual fee: $95 each

Why I pay the annual fee on this card: If for no other reason, I hold onto each of these cards because they offer two elite qualifying stays and five elite qualifying nights towards status annually. That means for having both cards I start every year with four elite qualifying stays and 10 elite qualifying nights, which makes it much easier to qualify for Platinum status.

Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard®

Annual fee: $95

Why I pay the annual fee on this card: The card offers a 10% refund on redeemed AAdvantage miles, up to 10,000 refunded miles per year. Given that I redeem at least 100,000 miles per year, I’m able to maximize this benefit. The way I see it, it’s like buying American miles for 0.95 cents each, which is a great deal.

Citi® Hilton HHonors™ Reserve Card

Annual fee: $95

Why I pay the annual fee on this card: You get Gold status for as long as you have the card, which I don’t actually value that much, since you also get Gold status for having The Platinum Card® from American Express. However, you also get a complimentary weekend night when you spend $10,000 on the card per year, which I consider to be worthwhile.

The Alaska Airlines Visa Signature® Card

Annual fee: $75

Why I pay the annual fee on this card: The card offers an annual $121 companion certificate, which is about as unrestrictive as it gets. The companion earns miles, is eligible for upgrades, etc. When you add in the $75 annual fee, it’s really like paying ~$186 for a companion ticket. Throughout the year I’ll at some point get outsized value from that.

The Hyatt Credit Card

Annual fee: $75

Why I pay the annual fee on this card: The card offers an annual free night certificate at any Category 1-4 property, which I always get more than $75 of value out of.

Club Carlson Premier Rewards Visa Signature Card

Annual fee: $75

Why I pay the annual fee on this card: The card offers 40,000 points upon your account anniversary each year. I value those points at ~0.4 cents each, so that more than justifies the annual fee in and of itself. On top of that, you get Club Carlson Gold status for as long as you have the card, which I find useful for my occasional Club Carlson stays.

IHG® Rewards Club Select Credit Card

Annual fee: $49

Why I pay the annual fee on this card: I’d argue this is perhaps the most valuable card for just about everyone to have. You get an annual free night certificate valid at any IHG property, which more than justifies the annual fee in and of itself. On top of that, you get IHG Platinum status, and a 10% refund on redeemed points.

Bottom line

The above are the cards I’m holding onto long term, and doesn’t even include some of the short term credit cards I acquire that may have annual fees. It might seem crazy to voluntarily pay $2,103 in recurring credit card annual fees, but I truly believe I get outsized values from each of these cards, or else I’d cancel them.

Hopefully that provides some useful insight into how cards with annual fees can still be worth applying for and holding onto.

About lucky

Ben Schlappig (aka Lucky) is a travel consultant, blogger, and avid points collector. He travels about 400,000 miles a year, primarily using miles and points to fund his first class experiences. He chronicles his adventures, along with industry news, here at One Mile At A Time.

More articles by lucky »

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Comments

  1. ” upgraded this card from the Chase Sapphire Preferred® Card” – do you mean product change w/o the signup bonus?

    btw, great blog and info always. any special treatments/incentives/bonus/perks you received is well deserved. I can say 90% of the readers cannot figure out how it works w.o you bloggers.

  2. @ ktc — Sorry for the confusion. I managed to get the Sapphire Reserve, and then downgraded my Sapphire Preferred to a Freedom Unlimited. My point was that I “upgraded” it in the sense that I decided on one card in favor of another. Thanks for reading! 🙂

  3. Credit,

    He said he upgraded from the CSP, which meant he did not get the 100,000 UR bonus (if I understand correctly). It is my understanding that you can upgrade to the CSR and bypass 5/24.

  4. The real question we’d all like to know is this: How much do you spend per year and how much of that is MS? I understand that’s not a question many people would want to answer–I probably wouldn’t want to in a public forum. I’m sure everyone’s curious though 🙂

  5. Agreed, I would love to know how much it costs to spend all 365 in a hotel…with the places you choose, seems like 100k would be a starting point.

  6. RE: SPG cards–I was considering cancelling them as I don’t stay enough in an SPG property to get elite status regardless of getting the headstart on qualifying stays with the cards, and logically the club access that comes with the business version would not be valuable if I don’t stay there often. But then I realized that I got much more than the annual fee in value out of both of them via the Amex Sam’s Club offer alone this year. So keep for the Amex offers, the card pays for itself that way.

  7. Surprised that you didn’t have Ink Plus in your collection, guess you don’t have much of MS activities 😛

  8. Not to give Ben any more anxiety about how much he shares, but to the comments regarding how much he spends, he is a chase private client so you know…
    And he’s only two years older than me…I need to make different choices

  9. You pay $95 to keep a card that gives you a extra 1-2% at gas stations and grocery stores despite living in hotels full time and not owning a car.

    That makes little sense. Does AMEX make you keep that card open?

  10. @Jay,
    Perhaps before you jump to the conclusion that amex “makes” him keep the card you should what kind of forum this is. You’ve completely missed the point of how to maximize your points. You’ve assumed that he eats out all the time so he never needs to go to the supermarket and doesn’t earn much 3x points. Ever consider you can go into a supermarket and buy a amazon gift card and that translates to 3x points on amazon purchases??? And he can get a 50% bonus on top of that with that card.

  11. On the Citi Prestige card you also can get $100 off the fee for being a CitiGold client which makes its only $100 out of pocket.

  12. @joe
    So he makes 30 swipes a month in the card and pays $95, so he can get 4.5 MRs at supermarkets…. Last I heard he has the ink cash card which gets 5 URs at places that sell amazon gift cards. That card has zero annual fee, and no requirement for thirty transactions

    Even without the ink cash, do the math… supermarkets max out at $6k per year. So assuming you hit that mark, AND get the 30 swipes 27k MR points… you’d have about 15k MR with the free version of the card. So in your example you are paying $95 with the hope of getting 12k extra points at the max. Plus you have to spend $6k at amazon.

    I am aware of how to maximize my points, as well as minimize fees

  13. Diners club Black card also offers excellent travel benefits. Would like your views on Diners club cards.

  14. Not sure you’re getting full value out of those SPG stay credits given that you hit 100 nights with them…

  15. @jay – first, even in your example, lucky comes out ahead. An extra 12k MR points comes out to $120 if you only value them at ne cent. Given that lucky values them at 1.7 cents, he’s comfortably ahead of the annual fee.

    But that’s ignoring that he specifically said that he values it for *everyday* spend. By getting the 50% bonus, he is earning 1.5 points per $ on otherwise unbonused spend. Given how everyone assumes lucky spends a ton of money on his cards, that could add up quite a bit.

    Now if you were to ask why have this over the freedom unlimited…

  16. Wouldn’t it be of value to share why you choose to pay the fee? For example the Reserve provides addl value when UR points are redeemed for travel. Just checking 🙂

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