There is no such thing as an annual credit card fee that you want to pay. The fee comes, and you usually have the choice of paying it or closing the account. But this decision can be much easier when you get the annual fee to pay for itself.
There are some credit cards that require an annual fee just for the privilege of having an account open and receiving some intangible or non-quantifiable benefits. In addition, there are some cards that offer perks and benefits that can be directly valued at amounts large enough to pay for most or all of the annual fee. Here’s what to look for when you want to get a new credit card with an annual fee, but want the card to pay for itself.
1. Airline Fee Credits
Several credit cards now offer annual airline fee credits of $100 to $300. These are statement credits that cardholders can claim for charges of airline fees such as baggage fees, seat selection fees and change fees. For example, the American Express Platinum card (reviewed here) offers an annual airline fee credit of $200 while the Citi Prestige (reviewed here) offers an air travel credit of $250, which can be used for fees, tickets or even upgrades. By themselves, these credits won’t pay for these card’s annual fees, which are both $450, but they go a long way toward making these cards pay for themselves. (Full Disclosure: Citibank, as well as American Express & Chase advertise on Credit.com, but that results in no preferential editorial treatment.)
2. Global Entry Application Fee Credits
Global Entry is a program operated by the U.S. Customs and Border Protection that allows for expedited processing through immigration when arriving in the U.S. on a commercial flight. In addition, members of Global Entry also receive access to the TSA’s PreCheck program, which offers faster and less intrusive security screening at U.S. airports. The application fee for Global Entry is $100, but there are several credit cards that offer application fee credits including the American Express Platinum, Citi Prestige and the American Airlines AAdvantage Executive World Elite Mastercard from Citi. Once accepted, your Global Entry membership is valid for five years before it must be renewed for another $100. Thankfully, these cards offer a single $100 fee credit for both the initial application and for renewal every five years.
3. Companion Certificates
There are some credit cards that offer a free companion certificate to cardholders each year. For example, the Delta SkyMiles Platinum card from American Express offers cardholders a round-trip companion certificate for an economy-class ticket within the contiguous 48 states, each year upon renewal. This card has a $195 annual fee, but the companion certificate can be worth far more. In addition, the Alaska Airlines Visa Signature card from Bank of America offers a coach companion fare from $121 each year, and has an annual fee of $75. This companion fare comes in the form of a code that can be redeemed online for any Alaska Airlines flight, and the companion will even earn mileage credit. When cardholders are able to utilize these companion certificates for free or highly discounted airfare, the annual fees for these cards can pay for themselves.
4. Sign-Up Bonuses
Many rewards credit cards offer new applicants valuable points, miles, or cash back, often after meeting a minimum spending requirement. These bonuses are typically worth hundreds of dollars and can far exceed the cost of the first year’s annual fee. For example, the Alaska Airlines Visa Signature card from Bank of America offers new cardholders 25,000 miles in the Alaska Airlines Mileage Plan program, and has an annual fee of $75.
5. Anniversary Bonuses
Some credit cards offer existing cardholders bonus points or miles on their anniversary, or other kinds of valuable rewards. For example, the Southwest Airlines Rapid Rewards Premier card (reviewed here) has an annual fee of $99, but it also offers cardholders 6,000 points on your cardmember anniversary. In addition, the IHG Rewards Club Select credit card from Chase offers cardholders an annual free award night at one of its hotels each year. This card has an annual fee of $49 that is waived the first year.
6. Airline Lounge Club Access
Airlines sell their annual memberships in their airport lounge clubs for hundreds of dollars, but there are usually airline credit cards that offer these memberships as a perk. For example, the Delta SkyMiles Reserve credit card from American Express offers a Delta SkyClub membership. This membership normally sells for $450 a year, which is the same price as the annual fee for this card.
At publishing time, the American Express Platinum, Citi Prestige and American Airlines AAdvantage Executive World Elite MasterCard from Citi are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.