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A few weeks ago, I wrote about the Chase 5/24 rule: cards that churners still CAN get, talking about the fact that Chase is cracking down on credit card “churners” – people that have at least 5 new accounts opened in the past 24 months. The evidence now seems to point that if you’ve applied for 5 new accounts (from ANY bank!) in the past 24 months, you are not going to be approved for a Chase Sapphire Preferred or Chase Freedom card
Susan from the excellent FPT Giftbox blog left a comment on that post that asked:
I got Chase BA (100k) last month but Chase Ink Cash was denied. I already have the Chase Ink Plus and maxed out my 50k office supply store limit, so really wanted the Ink Cash. Bummed. I also have Chase Sapphire, Freedom, IHG, and Hyatt. My United MPE application got denied and that was the second time I got denied for a credit card application (first was Club Carlson, but US Bank has always been hard on churners). My annual fee for the Sapphire is coming up soon so I have to decide if I want to cancel or keep.
Dan, which cards with annual fees do you keep?
Which cards with annual fees do you keep?
I thought it was an interesting question and worth a separate post to talk about cards with annual fees. I think about new credit cards as providing benefits in 3 different ways
- Cards that have a good signup bonus
- Cards that provide an ongoing benefit, such as a good category bonus, or other perks
- Cards that have an anniversary bonus, such as free nights
Cards that have a good signup bonus
I think that just about every card that offers a signup bonus is worth signing up for at some point – you can see how my wife and I just signed up for 7 new cards as part of our November 2015 churn. Now, I say this every time, but DO NOT SIGN UP FOR A CREDIT CARD JUST BECAUSE SOME GUY ON THE INTERNET SAID HE DID! Take things slow and only go with what you feel comfortable with.
As we read in my Beginner’s Guide to travel hacking, generally speaking the small temporary hit to your credit score is more than compensated with the other benefits of signing up for the new card (not to mention the signup bonus)
Most credit cards that have an annual fee have it waived for the first year, and it is rare (but not unheard of) that I personally will sign up for a card whose annual fee is not waived
Cards with a great ongoing benefit
- Chase Sapphire Preferred and Chase Ink cards allow you to transfer your Chase Ultimate Rewards to transfer partners, instead of just redeeming them for cash through the UR travel portal.
- The Chase Ink card also gives 5x at office supply cards, which is great for when they have deals on Visa gift cards as well as for reselling opportunities
- Many airline cards give benefits like some elite status, free checked bags, a companion fare or increased award space, which could be useful depending on your travel patterns
Generally speaking, there aren’t many cards in this category that I personally think are worth paying the annual fee on. Even on those, we’ll generally try to call the reconsideration line to get a statement credit or other bonus offer in exchange for the fee. We do keep the Chase Ink card and that’s just about it.
Cards with an anniversary bonus
Another type of card that can be worth paying the annual fee is one that gives a bonus on the anniversary.
- The most common example of this is the Chase IHG Rewards card, which gives a free hotel night at ANY IHG hotel on your anniversary, all for paying the $49 fee. So you could use it at, say, the Intercontinental Bora Bora (below)
- Most hotel chains have a card that offers similar benefits, though most of the other ones have limitations (like only Category 1-5, for example)
- The Club Carlson cards offer 40,000 bonus points on your anniversary in exchange for your $60 or $75 annual fee
- Many of the “premier” cards that have really big annual fees offer large annual airline credits, which can help offset the fee, again, depending on your travel patterns.
- As I mentioned before, if you call in and tell them that you don’t want to pay the annual fee, you can often get either the fee waived, a statement credit, or bonus miles that will offset the fee.
If you have questions about credit cards, shoot me an email at dan at pointswithacrew dot com – I’m happy to help. If you do want to support the site, I do receive a commission if you sign up for a card through my affiliate credit card links.
What about you? When have you found it useful to pay the annual fee on a card? Did I miss any obvious examples? Leave a note in the comments!