Do Annual Fees Count Towards Credit Card Minimum Spend?

Filed Under: Advice, Credit Cards

It just occurred to me that I’ve never specifically addressed this in a blog post, so this post is long overdue.

When it comes to credit card spend, my number one priority is always making sure I reach the minimum spend requirement on a credit card, which is even more important than using the right card for the right spend category. Credit card spend requirements can differ drastically — some cards have no minimum spend requirement at all to get the welcome bonus, while other cards have minimum spends of $10,000+.


Understandably people want to calculate just how much they’ll have to spend on their card to earn the bonus, and whether or not the annual fee on a card counts towards that minimum spend requirement.

Does the annual fee count towards the minimum spend?

While it can be confusing, the annual fee on a card doesn’t count towards the minimum spend required to earn a credit card sign-up bonus. In other words, if a card has a $3,000 minimum spend requirement and a $450 annual fee, make sure you spend at least $3,000 not including the annual fee (meaning your statement balance will be at least $3,450).

In reality I always try to over-spend a bit on the minimum spend, because you never know when you might need to make a return on an item you purchased. If that’s the case and the refund puts you under the minimum spend requirement, you may not get the points, or may even have them clawed back if they’re already been issued to your account.

Do travel credits count towards the minimum spend?

Another common question is whether travel/airline credit benefits count towards the minimum spend requirements. In other words, the Chase Sapphire Reserve Card has a $300 annual airline travel credit, so if you get reimbursed $300 within the first couple of billing cycles, does that mean you need to spend an extra $300 to earn the bonus?

For most cards the answer is no, though you’ll want to check the exact offer details to be sure. Each card’s terms will explain what counts towards the spend requirement. If the terms indicate that “qualifying spend” includes whatever you spend minus any credits, then you’d need to spend the extra amount. If not, you generally don’t have to.

For example, here are the terms on the Sapphire Reserve:

To qualify and receive your bonus, you must make Purchases totaling $4,000 or more during the first 3 months from account opening. (“Purchases” do not include balance transfers, cash advances, cash-like charges such as travelers checks, foreign currency, and money orders, any checks that access your account, overdraft advances, interest, unauthorized or fraudulent charges, or fees of any kind, including an annual fee, if applicable.) After qualifying, please allow 6 to 8 weeks for bonus points to post to your account. To be eligible for this bonus offer, account must be open and not in default at the time of fulfillment.

As you can see, there are many things that don’t count as “purchases,” though in theory the amount you spend on travel (even if reimbursed) should count.

Bottom line

It’s not worth risking a sign-up bonus over a few hundred dollars of spend. If you’re in the position to do so, always over-spend on the minimum spend, even if you’re forgoing bonus points on another card that might offer a better return per dollar spent.

I always try to exceed the minimum spend requirement to be sure I’m accounting for the annual fee, any credits I’m being issued, and the possibility of needing to return something.

I realize this is probably obvious to many of you, though I’ve heard so many stories from readers who were denied a bonus because they didn’t realize the annual fee didn’t count towards the spend requirement. So I figured a reminder was in order.

  1. Hi Ben, here is a wrinkle I just though about to increase miles. I read Tiffany report about Plastiq and have used iy yo pay rent, mortgage etc when they don’t accept sards.

    However, now I wonder if you can use Plastiq to pay your credit card?? For example, pay your Citi Prestige card bill through Plastiq using Amex SPG and vice versa

  2. Amex looks at purchases minus credits/returns, at least that’s what they told me. So it doesn’t matter what the T&Cs say, at least to Amex.

  3. Amex subtracts out (most) credits and returns but there’s a nasty problem that can still occur with returns. I can’t find the flyertalk post that explains it in detail, however here’s the gist: The Amex automated signup bonus system is programmed to deny the bonus if the specific threshold-clearing purchase is returned- even if susequent spend well exceeds the minimum spend.

    For example, if you have spent $2995 of $3000, and you make a $10 purchase that is later returned, you will be denied the bonus even if you make a $100 purchase immediately afterwards and you’re still within the minimum spend deadline. If this happens to you, it will require a lot of time-consuming follow-up and manual intervention to get fixed.

  4. @Red


    That explains why I didn’t get it automatically. When I called, that’s when they told me the airline charges that received credits didn’t count. BSo I made more charges, still nothing . What an big pain. It doesn’t seem like anyone at Amex understands it. And they say I have to give it 8 weeks to post.

  5. If the Chase Sapphire Reserved automatically credits my account when I make a travel purchase then wouldn’t your balance only need to be $4,150?

    I made $4000 in Point of Sale transactions, only $300 were already credited back into my account leaving the annual fee.

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