Credit Cards

Credit Card Annual Fees and How to Beat Them

Annual Fees

Most people are disgusted when they hear the word "Annual Fee" associated with a credit card. No one wants to pay extra money just to use or own a credit card, but this train of thought will end up causing you to miss out on some amazing benefits. To show you an example of how much value you can get from cards with annual fees, I am going to show you a breakdown of two of the cards with some of the highest annual fees out there. The Chase Sapphire Reserve and the American Express Business Platinum both have annual fees of $550. This is a high cost but the benefits outweigh the price, at least if you only plan to keep the card for one year.

The Chase Sapphire Reserve

So $550 is a lot of money right? I bet you're wondering how in the world I can justify paying that much. Well, check out some of the benefits and you'll see:

  1.  300$ travel credit
    • This can be used for any travel from trains, to plane tickets, to even parking fees.
  2. $100 global entry credit
    • Expedited entry when returning to the US, free automatic TSA Precheck, and it counts towards MSR? Sounds good to me.
  3.  Trip Delay insurance up to $500 if >6 hours delayed
  4.  Priority Pass Lounge Access
    • I value this at roughly $20 per use and thus far in the 5 months I have had this card I have used it 3 times.
  5.  Roadside Assistance up to $50
  6.  Rental Vehicle Primary Insurance up to $75k in damages (must opt out of all other insurance and pay on this card)
  7.  3x points on Travel and Dining
  8. Lyft Pink Membership (15% off rides, priority pickup, easy cancellations, 3 free 30 min bike or scooter rides)
  9. Door Dash Dash Pass (No delivery fee from eligible restaurants) and $60 yearly statement credit for spending on Door Dash

Now that I have pointed out these benefits let's check out the math:

BenefitValue
Sign Up Bonus (50k UR @ 1CPP)$500
Travel Credit$600
Global Entry Credit$100
Dash Pass and $60 Credit$60
Trip Delay Insurance$0
Lyft Pink$0
Priority Pass$60
Roadside Assistance$0
Rental Vehicle Insurance$50
Total$1,400

Chart Breakdown

If you check out the chart you might be a little confused about some of the values I used so let me elaborate. I set the value of benefits I personally have used as the amount I got out of them, and I set anything I have never utilized to $0.

The travel credit is valued at $600 instead of $300 is because you can use it twice on one annual fee. When it comes to Chase, they reset the travel credit after your annual fee is due but, if you cancel your card within 30 days of the fee posting or PC your card with 60 days, then you get a full refund for the second fee. This means that you can get double the value out of the travel credit! That alone should show you that the card is worth it. You could even buy airline giftcards and then resell them to get the travel credit in cash.

Another huge benefit of this card is that if you redeem your UR in the chase travel portal, each point is worth 1.5 cents. That means, in reality, the signup bonus is worth at least $750 and could be worth even more if you find sweet spots transferring to travel partners. Check out some of my upcoming posts on travel to see what I mean about that.

By the way if you have the Sapphire Preferred or the basic Chase Sapphire do not apply for this card. Chase auto denies you if you have a card in the Sapphire family but I'll show you how to get around that in an upcoming post!

The American Express Business Platinum

This is the business version of The American Express Platinum Card.  The attached links are not the maximum possible sign up bonuses for these cards and they require spending a large amount of money. For the biz plat, you can call in to try to get a 100k MR sign up bonus or use a targeted mailer. I opted for calling in and successfully got the bonus of 100k MR after a $10k spend ( I spent roughly $3k organically and MS'd the rest) so this valuation will utilize that number. Check out the main benefits of this card:

  1. $200 Airline Incidental Credit - a little harder to use than the CSR.
    • Easiest use is by purchasing a $50 Delta GC and then using that towards a domestic flight and putting the remainder on the platinum. The difference of the ticket price - $50 will be reimbursed on your platinum card within a week.
  2. Centurion Lounge Access
    • I value this at roughly $50 per use due to the hot food buffets, unlimited alcohol, and other amenities such as showers, massages, etc.
  3. $100 Global Entry credit
    • Expedited entry when returning to the US, free automatic TSA Precheck, and it counts towards MSR.
  4. Boingo Wi-Fi Access
    • Free access to Boingo hot spots is definitely convenient in airports. I value it at about $20.
  5. 10 Gogo In-Flight Wi-Fi Passes
    • This is very convenient for frequent fliers that need to get work done or want to watch some Netflix. I value at about $20 because I don't typically feel like I would ever pay for Wi-Fi.
  6. Gold Hotel Status at Marriott
    • This is great for free upgrades and breakfast. I used this recently and I have to say the service you get as a gold member is great. I value it at $50
  7. Priority Pass Select Membership
    • Same as the Sapphire Reserve but limits guests to 2.

Alright so now that you've seen how amazing the benefits of the Business Platinum card can be, let's see the breakdown.

BenefitValue
Sign Up Bonus (100k MR @ 1CPP)$1000
Travel Credit$600
Centurion Lounge Access$150
Global Entry Credit$100
Boingo Wi-Fi Access$20
Gogo Wi-Fi Passes$20
Gold Status at Marriott$50
Total$1,940

Business Platinum Breakdown

Again with the Biz Plat you can see that the travel credit is valued higher than it actually is. This time, it is because the travel credit on this card resets annually instead of when your AF hits. This means that if you get this card around November/December you can use the travel credit three times, once the first annual year, once the following, and then a final time after the annual fee posts but before the 60 day mark on your account. This 100% shows a profit by having this card without even considering the sign up bonus or other benefits.

Aside from the credit, all of the other bonuses are phenomenal as well. The centurion lounges make me feel like a high level executive. They treat you so well there and at the one in Dallas you can even get a massage! All in all, the Biz Plat is a great card and if you can get a 100k MR or 150k MR sign up bonus then this one is a no brainer.

Now that you've seen all of the benefits of these premium cards, I hope you can have an open mind about cards with annual fees moving forward. After this, I am going to start teaching about what cards to start with and the ideal path to a million points. Stay tuned for updates and thanks for reading everyone!

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