Some credit cards are free and some have an annual fee which is usually justified with a number of perks that come included as part of the deal. These, paid-for credit cards typically offer rewards for regular card use along with other benefits. Generally speaking, those benefits are well worth the money for those who know how to appreciate the extra comfort and other perks bundled with these cards. Nevertheless, you should ask yourself whether you should pay for a credit card. Answers to the following 5 questions should help you along the way to decided whether the annual fee is justified for you.
1. How much you spend per month/year?
First question you should ask yourself is how much you are already spending with your (existing) card. Then do the basic math — how much rewards could you get in return for spending the same amount with a paid-for, rewards credit card. If you end up with a number that is higher than the annual fee – go for it. It’s really that easy. For instance, if you spend $15,000 per year with your current card and you can get a card that offers 1% back, you would earn $150 in rewards every year. So you can afford an annual fee of $150, but chances are you could get a better deal with a card that offers a higher percentage back (either in points or as cash back).
2. How often you travel?
This is important as many rewards credit cards are focused on travel services. Using travel-focused credit cards you could earn free hotel stays, or free flights and upgrades. If you, say, travel once a month, you should get a travel rewards credit card. It will help you save hundreds per year, while delivering a much better experience on your travels (due to extra perks some of these cards include).
3. How much you value comfort?
4. Do you need/want premium perks?
Related to the previous point, do you need/want access to an airport lounge? What about annual travel credit or elite status with a major hotel chain? TSA PreCheck and/or Global Entry credit reimbursement? These are just some of the perks that premium credit cards include. They, however, typically cost north of $400 per year so you better really love these goodies before getting one of these products.
5. Do you have a favorite airline/hotel?
Then the choice is obvious – get a card that is co-branded by your favorite hotel and/or airline. There’s nothing wrong in having multiple credit cards — that’s how we roll — which is what we advise you to do if you have both the favorite airline and favorite hotel chain. If you are already spending money with these companies, why not get something in return, not just points but also VIP treatment.
Conclusion
Even though we don’t like annual fee on our credit cards, we do understand it can be justified. And we do our best to squeeze the every little benefit a premium credit card includes. And again that is something we advise to our readers…
But first, you should get yourself a rewards credit card. Start by clicking the link below this article and on the next page you’ll find a number of options to choose from. We are sure your next card is somewhere there. 😉