There are credit cards out there at all kinds of price points — there are some fantastic no annual fee cards, there are some rewarding mid-range cards (with annual fees of under $100), and then there are premium cards (with annual fees of $300+).
For many consumers, premium credit cards can be the hardest to justify, since many people just don’t think it’s worth spending hundreds of dollars per year on a single credit card. That’s fair enough, but I also think it’s worth discussing how we’ve seen a fundamental shift in the value of premium credit cards.
Going back a decade, premium credit cards had a pretty niche value proposition, and many people got these cards primarily for the prestige. However, the premium credit card space has become much more competitive in recent years, and this has caused the value proposition on these cards to improve considerably.
While premium credit cards aren’t for everyone, nowadays I’d say they’re pretty easy to justify for many people who like to travel. Yes, you’ll pay a high fee upfront, but the perks typically more than justify that. In this post I wanted to look at that in more detail for those who might be skeptics.
In this post:
Why premium credit cards are worth having
Let’s take a closer look at some of the most popular premium cards on the market. We’ll cover the annual fees, and then how I go about justifying the ongoing cost of holding onto these cards. I won’t even discuss the welcome offers, which can get you a ton of value upfront, and are all the more reason to consider these cards.
Capital One Venture X Credit Card
The Capital One Venture X Rewards Credit Card (review) has a $395 annual fee, and it’s also the premium card with the easiest to justify annual fee, in my opinion.
How do I justify the annual fee? The card offers a $300 annual travel credit (good as cash through the Capital One Travel portal) plus 10,000 anniversary bonus miles (I value Capital One miles at 1.7 cents each, so that’s $170 worth of value right there). By my math, you’re getting $470 worth of value on a $395 annual fee card with those two benefits alone.
But that’s only the tip of the iceberg:
- The card offers 2x miles per dollar spent, making it one of the most rewarding cards for everyday spending
- The card offers a Priority Pass membership and access to the Capital One Lounges
- The card offers perks like primary rental car coverage and cell phone protection
- The card offers incredible authorized user perks, as you can add up to four authorized users to the card at no cost, and they each get the same lounge access perks
As you can see, it’s really easy to make the math on the Capital One Venture X work, even if you’re not someone who would usually consider a premium credit card.
If you’re looking for a business card instead, the Capital One Venture X Business (review) has a lot of similarities, and can absolutely be worth it.
Chase Sapphire Reserve Card
The Chase Sapphire Reserve® Card (review) has a $550 annual fee, and is probably the most popular premium card with younger generations.
On the most basic level, the card offers a $300 annual travel credit, which is automatically applied to any travel purchase. That should be good as cash to anyone who has this card, meaning this card should really only be costing you $250 per year.
What do you get for that $250 investment?
- The card offers excellent bonus categories for spending, including 3x points on all dining and travel purchases
- The card gives you the ability to redeem all of your Ultimate Rewards points for 1.5 cents each toward travel purchases through the Chase Travel portal (in addition to the ability to transfer them to airline and hotel partners)
- The card offers a Priority Pass membership, giving you access to 1,300+ lounges around the globe, on top of unlimited access to Chase Sapphire Lounges, plus access to select Air Canada Maple Leaf Lounges
- The card offers excellent travel and rental car coverage, which can come in handy if you travel a lot
Independently I wouldn’t say the Chase Sapphire Reserve is quite as easy to justify as the Capital One Venture X, but the major benefit of this card is all the other cards you can maximize in the Ultimate Rewards ecosystem by having the Sapphire Reserve.
Amex Platinum Card
The Platinum Card® from American Express (review) has a $695 annual fee (Rates & Fees), so it’s the highest annual fee personal card of the bunch. Arguably the card set the standard for premium cards, though nowadays its value proposition can be pretty polarizing.
The card’s annual fee can potentially be more than justified by the incredible number of credits offered, including the following (Enrollment is required for select benefits):
- Up to $300 in statement credits each year on a digital or club membership at Equinox
- Up to $300 in SoulCycle credits
- Up to $240 in annual digital entertainment credits
- Up to $200 in annual hotel credits (minimum two night stay required for Amex Hotel Collection, and one night stay for Amex Fine Hotels & Resorts)
- Up to $200 in annual airline fee credits
- Up to $200 in annual Uber credits
- Up to $199 in annual CLEAR Plus credits
- Up to $155 in annual Walmart+ credits
- Up to $100 in annual Saks credits
As you can see, that’s potentially $1,800+ worth of annual credits. What’s the catch? These credits aren’t nearly as straightforward as the ones on Capital One and Chase cards. These credits are largely broken down by month, and come with lots of restrictions on what they can be redeemed for.
Some cardmembers will roughly breakeven on the annual fee with how they actually use these credits. Others may come out way ahead. Before you get the Amex Platinum Card, definitely do research on the terms associated with the credits, and how much value you’d get from them.
This is only one aspect of the card, though. The Amex Platinum Card also offers the most comprehensive airport lounge access of any card. You get a Priority Pass membership, access to Delta Sky Clubs (when flying Delta same day), Amex Centurion Lounge access, and much more.
If you’re looking for a business card instead, The Business Platinum Card® from American Express (review) is worth considering, though note that there are some differences between the two versions of the card.
Citi AAdvantage Executive Mastercard
While the above are all bank-branded cards, I thought it would be interesting to look at a premium airline card as well. The Citi® / AAdvantage® Executive World Elite Mastercard® (review) has a $595 annual fee. What do you get for that?
Well, the card offers an American Admirals Club membership for the primary cardmember, making this the best card for Admirals Club access. You’re already coming out ahead there compared to the cost of outright buying a membership.
What makes this card even better is that you can pay a total of $175 to add up to three authorized users to the card, meaning you’re potentially paying under $60 per authorized user. Those authorized users then also get Admirals Club access when traveling on American or a partner same day, and they can even bring guests.
The card offers several other great perks, like up to 20,000 bonus Loyalty Points per year, up to $120 in annual credits with Avis and Budget, up to $120 back annually with Grubhub, and more. If you fly American frequently, then I think this card is absolutely worth it.
Hilton Aspire Card
In addition to a premium airline credit card, let’s also take a look at a premium hotel credit card. The Hilton Honors American Express Aspire Card (review) has a $550 annual fee. While that’s no doubt steep, the card should be very easy to justify for anyone who stays at Hiltons with any frequency.
What are you getting for that annual fee?
- Hilton Honors Diamond status for as long as you have the card, which is Hilton’s top-tier status
- An anniversary free night award annually, which can be redeemed at a property costing up to 150,000 Hilton Honors points
- Up to $400 in annual Hilton resort credits, in the form of a $200 Hilton resort credit every six months
- Up to $200 in annual airline flight credits, in the form of a $50 airline credit every quarter
- Up to $199 in annual CLEAR Plus credits
Personally I think the Hilton Honors Diamond status and anniversary free night award alone justify the annual fee. Then if you add in the Hilton resort credits and airline flight credits, you can potentially come out way ahead with this card.
The information and associated card details on this page for the Hilton Honors American Express Aspire Card has been collected independently by OMAAT and has not been reviewed or provided by the card issuer.
Bottom line
There are credit cards at just about all price points. While many people have no issue picking up a no annual fee or sub-$100 annual fee card, premium credit cards with high annual fees are a different story.
I’m not saying everyone should pick up a credit card with a $300+ annual fee, though I do think the cards are easier to justify than most would assume. That’s especially true with a card like the Capital One Venture X, which offers annual credits and perks that more than justify the annual fee.
Cards like the Chase Sapphire Reserve aren’t slam dunks in quite the same way, but make a lot of sense for those who want to earn travel rewards, value lounge access, and appreciate travel protection when things go wrong.
The Amex Platinum Card has the potential to be the most rewarding of the bunch, despite the high annual fee. However, maximizing it requires a lot more research and effort than with the other cards.
What’s your take on the value proposition of premium credit cards? Which do you find to be worthwhile?
The following links will direct you to the rates and fees for mentioned American Express Cards. These include: The Platinum Card® from American Express (Rates & Fees).
For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.
For me, one of the best perk for Amex plat is car rental 4 hrs grace period.
What you did not cover is travel insurance. Not sure what all these cards offer, but the Chase Infinite Mileage Plus (United) Club Card offers travel inusrance. I recetly received 19k reunded when I fell ill just before my spouse and I were scheduled for a Viking Cruise. That 19k will cover years and years of the annual fee … which I believe is now $595.
Ben, I don't get why this blog sleeps on the US Bank Altitude Reserve. $400 AF, $325 credit (used similar to CSR), 8 PP visits which include restaurants (at least for now) and *most importantly* mobile wallet purchase give a 3x return on everything, redeemable for 1.5X on travel. And it's Visa Infinite so you have some decent protections.
If someone has found better than 4.5% return on unbonused spend, I'd love to know what that is.
It’s decent if you use the 1.5 cents per point perk. Here are the reasons why it’s not mentioned as much:
1. Many folks does not like booking travel over an OTA. Thus the 1.5 cents per point is hard to justify.
2. Doesn’t have any (currently ) transfer partners for the points, arguably the most valuable way to use points these days. Maybe this will change.
3. 3x on mobile wallet is fine, but...
It’s decent if you use the 1.5 cents per point perk. Here are the reasons why it’s not mentioned as much:
1. Many folks does not like booking travel over an OTA. Thus the 1.5 cents per point is hard to justify.
2. Doesn’t have any (currently ) transfer partners for the points, arguably the most valuable way to use points these days. Maybe this will change.
3. 3x on mobile wallet is fine, but many folks here carry multiple cards and tend to know how to use specific cards for specific purchases and usually will do just as good 3x earn with transferable points.
4. PP restaurant access is good but it’s not unlimited and if you really want that perk as your main, you’d go with Bank of America visa instead especially if you have platinum level or higher with them.
Ultimately, it also might be because bloggers don’t get as much kick back as the rest of the cards. Good luck
@Davisson
You obviously don't carry this card.
However, you are right US Bank and BofA doesn't get much love from any bloggers.
@Davisson - not sure about you, but the glory days of transferrable or airline miles seem to be behind us. Between slivers of inventory, rampant devaluation and the scourge of "dynamic pricing" (which is a devaluation on steroids), cash seems to becoming king again.
Agreed OTAs aren't fun, but all the 1.5 cpp redemptions (like CSR) work that same way, so I don't see this as hugely problematic.
What about the united infinite card for united club access since you included the aadvantage executive for admirals club?
The Citi AA Executive gives 10X on hotels and rental cars booked via the AA travel portal. To me, that pulls the card into the "premium" category. United's club card and Delta's club card are not there. Another travel blog includes any card affording lounge access in the "premium" category even though a card has a weak rewards structure. Not in my book.
High value customers don’t get charged the fees.
I have never paid an annual fee and I have 2 Amex cards including Centurion.
And, you use the Centurion card for exactly what type of spending?
Fred, that is exactly the thing. If the model for high-fee cards is to get you to spend more, then the model for waiving that high fee is to get you to spend orders of magnitude more again.
And nurturing a sense of "importance" and "status" is part of that subtle manipulation.
Personally I think that $99 annual fee cards with simple benefits is the sweet spot.
Tom, based on Paul's prior comments, he understands the points game. And, Paul is a retired senior executive of a major publicly traded company and doesn't need a Centurion card for a sense of importance. So, my point is this: If Paul is the points-savvy guy I think he is, why in the world is he putting spend on a 1X for everything card? I'm very familiar with the benefits of both the personal Centurion...
Tom, based on Paul's prior comments, he understands the points game. And, Paul is a retired senior executive of a major publicly traded company and doesn't need a Centurion card for a sense of importance. So, my point is this: If Paul is the points-savvy guy I think he is, why in the world is he putting spend on a 1X for everything card? I'm very familiar with the benefits of both the personal Centurion and the business Centurion. The opportunity cost lost on points is significantly greater than the dollar value of the benefits. (No matter what anyone at TPG says.) I have advised others to downgrade to the Platinum . . . and let Amex waive the annual fee on it.
PS - Tom, along your line, I think the Citi Strata Premier and Wells Fargo Autograph (Journey) are great cards. WF is adding transfer partners and I think it will give other card issuers something to ponder.
Ben, you may consider the CSR’s travel credit to be “as good as cash” but you’re still handing over a big lump sum annual payment to Chase.
I do wonder at what point you’d step back and think “wait a minute.” For example, if the CSR had an annual fee of $800 albeit with $550 travel credit would that be fine? How about $1k fee with $750 fee?
In other words, a lower annual...
Ben, you may consider the CSR’s travel credit to be “as good as cash” but you’re still handing over a big lump sum annual payment to Chase.
I do wonder at what point you’d step back and think “wait a minute.” For example, if the CSR had an annual fee of $800 albeit with $550 travel credit would that be fine? How about $1k fee with $750 fee?
In other words, a lower annual fee would always be more consumer-friendly than a travel credit, assuming a similar degree of perks.
But, there are different perks. The CSR gives access to 10X on hotels and rental cars in some cases -- what's that worth? The CSR gives access to 1.5cpp redemption value in some cases -- what's that worth? If it's your only Priority Pass cards, what's that worth? Each person can assess these values for oneself. A good deal for some but not for others.
They can be worth signing up for because of the initial perks. But not necessarily worth keeping longer-term.
For example I used to have Chase Sapphire Reserve but now consider the Preferred to be better value. Likewise I migrated from Hilton Aspire to Surpass.
The problem is that the high-end cards suck you into spending more than you otherwise would, e.g. with all those credits. And of course more generally that is the point of...
They can be worth signing up for because of the initial perks. But not necessarily worth keeping longer-term.
For example I used to have Chase Sapphire Reserve but now consider the Preferred to be better value. Likewise I migrated from Hilton Aspire to Surpass.
The problem is that the high-end cards suck you into spending more than you otherwise would, e.g. with all those credits. And of course more generally that is the point of all these loyalty programs - to get you to spend more!
Agreed. I downgraded from CSR to CSP and haven’t looked back. 90% of the sapphires benefits are contained within CSP, unless you really really love Chase’s travel portal.
The case against the expensive cards...
Capital One Venture X Credit Card, $395, 1st card reviewed in the article and strongest case.
$300 travel credit-ok, I value that.
10,000 miles-I value that at $70 or 0.7 cents per mile in the era of devaluation
2 mile earnings....not any different from 2% cash back
Lounge access....like a prison full of greedy people. Some lounges lack scenic views. Just as easy to find a quiet...
The case against the expensive cards...
Capital One Venture X Credit Card, $395, 1st card reviewed in the article and strongest case.
$300 travel credit-ok, I value that.
10,000 miles-I value that at $70 or 0.7 cents per mile in the era of devaluation
2 mile earnings....not any different from 2% cash back
Lounge access....like a prison full of greedy people. Some lounges lack scenic views. Just as easy to find a quiet gate and work. We are not dogs or horses that rejoice at free food.
You can redeem the points for 1 cent each for travel... so $400 value for $395 plus you get priority pass and the capital one lounges for free. Also, if you like points, you can get outsized value. Capital One X is the only true keeper card for me other than free ones.
I agree that in general, Priority Pass is no longer a perk. If they took it away and didn't devalue airline miles values, that's a trade I'd happily make.