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There are a lot of credit cards out there. I know, I know… that’s a good candidate for “obvious statement” of the year. Many of these cards have no annual fee, and others have a nominal annual fee. $95 or $99 is a common annual fee for many cards – right under that magical 3 digit amount. Then there is another whole set of “luxury” or “ultra-premium” cards, whose annual fees often range from $450-$550.

There are 3 different ways that I like to think of to get value from a credit card:

  • The welcome offer
  • Category bonuses for spending (or a high rate for everyday spending)
  • Other perks that you get from just having the card (free hotel nights, free checked bags, elite status)

It’s the combination of these that I use to try and decide whether the benefits I’m getting outweigh the annual fee if any that I have to pay. My family and I have somewhere around 40 different credit cards, and I don’t want to pay the annual fees on most of those! Many cards have the annual fee waived the first year, so it’s often at the 12 month mark that you really have to make the decision.

(SEE ALSO: Why I just canceled 13 credit cards)

(SEE ALSO: How to keep your miles and points when you cancel a card)

So here’s a look at some of the cards that I will consider paying the annual fee on. I’ve broken them out into different categories because there are many similar cards. In each category, I won’t necessarily pay the annual fee on ALL of the cards in that category but instead just one of them. I list them all because which one of them you pay the fee on might depend on your specific situation.

At least 1 premium Chase card

I think that it’s valuable to have at least one premium Chase card. This is to take advantage of the ability to transfer your Ultimate Rewards to hotel or airline transfer partners. That could be any of the following:

  • Chase Sapphire Preferred – 60,000 Ultimate Rewards after spending $4,000 in 3 months – $95 annual fee
  • Chase Ink Preferred – 100,000 Ultimate Rewards after spending $15,000 in 3 months – $95 annual fee
  • Chase Sapphire Reserve – 50,000 Ultimate Rewards after spending $4,000 in 3 months – $550 annual fee

Currently, we have the Sapphire Reserve, 2 Ink Preferreds, and also the old Ink Plus card, though we may be canceling a few of those once the annual fees come due.

Hotel cards that give free nights

Several hotel cards give free nights on each anniversary upon paying their annual fee. It can sometimes be challenging to make sure that you’re using them before they expire, but if you’re a frequent traveler, then one or more of these cards might make sense:

  • Hilton Honors American Express Aspire Card – $450 annual fee – free weekend night each year
  • IHG® Rewards Club Premier Credit Card – $89 annual fee – free night up to 40,000 points each year
  • Marriott Bonvoy Boundless™ Credit Card – $95 annual fee – free night up to 35,000 points each year
  • Marriott Bonvoy Brilliant™ American Express® Card – $450 annual fee – free night up each to 50,000 points each year
  • The World Of Hyatt Credit Card – $95 annual fee, 1 free Category 4 night on the anniversary

1 ultra-premium card

I used to think that the ultra-premium cards (with fees in the hundreds of dollars) were crazy and there was no way I’d ever get one. I later came to the realization at least for me that there were some cases where it would make sense. Of course, that was before the world ended and everyone canceled all their trips :-). Still, having one of these cards works for me for things like Priority Pass lounge access.

  • American Express Platinum Card – 60,000 Membership Rewards after spending $5,000 in 3 months – $550 annual fee (also a Business Platinum version with slightly different benefits)
  • Chase Sapphire Reserve – 50,000 Ultimate Rewards after spending $4,000 in 3 months – $550 annual fee
  • Citi Prestige – 50,000 ThankYou points after spending $4,000 in 3 months – $495 annual fee
  • Hilton Aspire card – 150,000 Hilton Honors points after spending $4,000 in 3 months – $450 annual fee

The American Express Gold card is another option with “only” a $250 annual fee 🙂

Other possibilities

A few other possibilities that you might consider would be an airline card, depending on which airline you fly the most. Getting free checked bags, lounge access, or easier access to elite status. Personally, even before COVID-19, I didn’t fly enough on paid flights to find any of the airline cards worth paying the annual fee on. Your situation may be different.

What to do with the other cards with annual fees?

So what about all of the other credit cards out there with annual fees? There are a couple of things that you can do with those cards. Remember, once the initial welcome offer is over, a card has to earn your business. Take a look at your travel and spending patterns. Of course, every person has different patterns, so if your travel or spending patterns are different then mine, you may come up with a different set of cards that you’re willing to pay the annual fee on.

Remember that before canceling a card, you should call and see if there are any retention or spending offers available on the card. Many times you can get a spending offer or statement credit that will more than make up for the annual fee. If not, then you can go ahead and downgrade the card to a no-fee option or cancel the card.

Which credit cards do you pay the annual fees on?

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