Why I Don’t Mind Paying Annual Fees
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EDITORIAL DISCLOSURE:
Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
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Trust me….I had the same question too when I first started earning points and miles: is it worth paying all those annual fees? 🤔
The short answer is, yes! Think of those annual fees like an investment in your future travel. Your steeply discounted future travel.
Most travel rewards credit cards will have an annual fee that must be paid each year that you hold the card. Those fees can range from as low as $69 and can be as high as $695. It is especially important to make sure that you are utilizing as many of the benefits as possible on any of those higher annual fee credit cards. That way you ensure that the annual fee is more than worth it! 👏🏻
The first year
For the first year you hold the card, the annual fee is always going to be worth it. “Why is that?” you might be thinking…Well, when you earn a credit card welcome offer for tens of thousands of points, you will earn ✨far more in travel value✨ than the cost of the annual fee.
Let’s consider the Chase Sapphire Preferred® Card that has a standard welcome offer of 60,000 Ultimate Rewards points after spending $4,000 in the first 3 months of card opening and an annual fee of $95. You could transfer those 60,000 points to Hyatt to book 2 nights at the Andaz Peninsula Papagayo Resort in Costa Rica. The cash rate for two nights at that resort can cost over $1,500! 🏖️
Trading the $95 annual fee is a great deal when you consider the value you can get for those points.
After year one
Now, you have a lot more to consider after year one if you’re looking to determine the value of your card long term. After you have earned the welcome offer on your card, and the second annual fee is coming due, that's when it is SO important to weigh the benefits the card provides and ensure that the annual fee is still worth that cost. I don’t want to be paying any unnecessary fees!
🌟There are some cards will always be a keeper for me. Consider a hotel credit card that offers a free night certificate annually; that is usually a reason to keep that card long term. The World of Hyatt Credit Card comes with a $95 annual fee and a category 1-4 free night certificate each year on your cardmember anniversary. There are hundreds of hotels you can choose from that fall within those categories and you can easily find a room worth $300+ per night. So when you do the math, that fee is a great deal for the long term travel benefits the card offers!
I also consider my long term strategy when thinking of what cards I’ll keep and which ones I will downgrade or cancel. Factors like how many cards I have cancelled in the year also plays a big role in my strategy to ensure I am always keeping up my credit score.
Premium travel rewards credit cards
Finding value in those higher annual fee cards can be a bit trickier and these cards will require a bit more effort to make that fee worthwhile. Let’s break down my top choice for a premium card that comes with a $395 annual fee: the Capital One Venture X Rewards Credit Card.
The Venture X comes with some of the following benefits (and more!):
-$300 annual travel credit for travel booked in the Capital One travel portal
-10,000 anniversary miles worth at least $100
-Up to $100 credit for TSA PreCheck or Global Entry (renews every 4 years)
-Unlimited Capital One lounge access for you and up to 2 guests and access to partner lounge networks; Plaza Premium and Priority Pass
When you consider those first three benefits alone, you more than make up for the cost of that annual fee! So that’s why this card is always in my wallet. 💳
Deciding what is best for you
These are just some of the major considerations when determining what annual fees are worth it for your credit card strategy. Most cards you open on your award travel journey will come with an annual fee, so that is why it is important to weigh the cost of those fees and determine what aligns with your travel goals. Some might prefer to keep costs low and only open cards with fees under $100, while others enjoy the perks that come with the higher annual fees.
As long as you are utilizing the benefits your card has to offer, you can decide what fees work for your budget and your long term goals!
EDITORIAL DISCLOSURE: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
