Premium Credit Cards With High Annual Fees: Are They Worth It?

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 $200), and then there are premium cards (with annual fees of $300+).

Perhaps the three most well known premium cards include the American Express Platinum Card® (learn more), Chase Sapphire Reserve® Card (learn more), and Capital One Venture X Rewards Credit Card (learn more). However, we’re also increasingly seeing co-branded airline and hotel premium cards, like the Citi® / AAdvantage® Executive World Legend Mastercard® (learn more) and Hilton Honors American Express Aspire Card (learn more).

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’d like to take a closer look at the value proposition of premium cards. What kind of perks do they offer, who do they make sense for, who shouldn’t consider these premium cards, and what are the best alternatives?

The basic value proposition of premium credit cards

While each premium credit card has its own unique perks and costs, the general value proposition of premium cards is mostly the same. The idea is that the cards have steep annual fees, and then cardmembers can offset them through a combination of perks, including credits, airport lounge access, and other privileges, ranging from elite status, to free night awards, to exclusive access to things.

Every single premium credit card offers some number of credits, and in a vast majority of cases, those credits have a retail value of more than the annual fee. The catch is that these credits are generally intended to create some amount of breakage, and they’re not all equally easy to use. That’s because some are issued monthly, or quarterly, or semi-annually, and there’s nuance to maximizing them.

These perks also almost never cost the card issuers as much as the retail value may suggest, for one of two reasons:

• The credits are merchant funded, and are intended to make it attractive for cardmembers to switch some business to that merchant
• The credits are for travel portals of the credit card company, so the credit card company earns a commission on bookings, and hopes that they come out ahead that way

On top of that, airport lounge access has become an increasingly common perk of premium credit cards. This often includes a Priority Pass membership, but it also sometimes consists of bank branded lounges, or even lounge access through airline partnerships.

So the way to think through the value of these cards is that you take the annual fee, you subtract the value of the credits you get, and then you decide how much you value the other perks offered, including lounge access.

The argument in favor of premium credit cards

With the basic value proposition of premium cards out of the way, let me talk a bit about the argument in favor of premium credit cards, and who should consider applying. As I see it, it’s worth getting a premium card if you meet some of the following criteria…

You’re willing to put effort into maximizing card credits

For the most part, I tend to think that really making the math on premium credit cards work requires using some number of the credits to help offset the annual fee. You don’t always have to use all the credits, but do try to be realistic about which credits you’ll actually use, and which you won’t.

It could even be that a credit sounds valuable, but if you have to use it monthly, you have to be honest with yourself about whether you’ll find value in that, or will even remember to do that. Again, don’t think you have to use every credit, but just make sure that you’re offsetting enough of the annual fee with credits so that the cost of holding onto the card is otherwise justifiable.

You value airport lounge access perks

Arguably the single most consistent perk of premium cards is that they offer some sort of airport lounge access. That’s not necessarily true for all premium hotel cards, but there is commonly an airport lounge access element to these cards.

If you do value airport lounge access, getting a premium credit card can be the best value way to access those experiences. While different premium cards get you access to different lounge networks, there is also a lot of overlap, so also try to be realistic about that. Having one Priority Pass membership is useful. Having six Priority Pass memberships doesn’t get you much incremental value. 😉

You value travel rewards, airline & hotel elite status

One other thing that most premium cards have in common is that they accrue points that can most efficiently be redeemed for travel rewards, so be sure that’s something you actually value. There’s no point in getting an Amex Platinum and spending money on it, only to redeem your points for gift cards, where you’re losing a massive amount of value.

Along the same lines, lots of premium credit cards offer some sort of airline or hotel elite status. In some situations that’s just entry level status, while in other situations, it’s potentially high tier status. If you stay with a hotel group with some frequency, there’s potentially quite a bit of upside there, and a card’s annual fee could be more than covered by the incremental perks after just one trip.

The argument against premium credit cards

As I see it, there’s also a pretty strong argument to be made against premium credit cards. I think that’s especially true when the realistic and practical side of our brain kicks in, rather than the side of our brain that gets excited by big headline numbers. As I see it, it’s maybe not worth getting a premium card if one or both of the following things applies to you…

You suffer from credit card fatigue

I think in general we’ve seen the increasing trend of credit card fatigue, whereby people are just growing tired of putting endless mental energy into maximizing credit card perks in order to justify card annual fees.

Can you come out ahead on these cards individually? Absolutely, quite easily, even! However, at some point these products go from feeling like exclusive luxury cards, to being more along the lines of coupon clipping. I have to be honest, I have almost every premium card, and while I do make the math work, sometimes it sure feels like a chore.

Every year I have to remember to use a countless number of credits, sometimes I need to pay with three different cards when I check out of a hotel, etc. You don’t want miles & points to go from something that’s a funny hobby, to something that just feels like a pain.

You are kind of over “normal” airport lounges

Airport lounges can greatly elevate the airport experience, and in particular, there are some amazing first class lounges and business class lounges around the globe. While credit card lounges can also be high quality on the surface, the issue has become the crowding.

There’s an irony to this entire transformation we’ve seen to the lounge situation over the years, and how monetization has changed. Airport lounges used to be a place to get away from the hustle and bustle of the terminal.

Nowadays airport lounges are sometimes the busiest part of a terminal, full of people looking to eat “for free” in order to justify their credit card annual fees. Look, I’m as guilty as anyone, I’m just trying to be realistic, though! At some point, the true luxury becomes just picking up that $20 sandwich in the terminal, and sitting in an empty gate area, where you actually have space to yourself.

Doing the math on some popular premium credit cards

Often I think it’s worth explaining the value of credit cards in the form of examples. So let’s take a look at some of the most popular premium credit cards, and work our way through the math. What annual fees do these cards have, and how hard is it to justify the cost of holding onto them?

I won’t even discuss the welcome offers on these cards, which can get you a ton of value upfront, and are all the more reason to consider at least giving one of these cards a shot. I’m also just trying to provide some examples across a wide variety of cards, but I’m certainly not including all cards.

Just to be thorough, let me mention some of the other cards that I won’t be addressing in more detail, like the Atmos™ Rewards Summit Visa Infinite^® Credit Card (learn more), Bilt Palladium Card (learn more), Citi Strata Elite℠ Card (learn more), Delta SkyMiles® Reserve American Express Card (learn more), Marriott Bonvoy Brilliant® American Express® Card (learn more), United Club℠ Card (learn more), etc. After all, the intent is to demonstrate the overall value of the cards, rather than go over every single card detail.

Capital One Venture X Credit Card value proposition

The Capital One Venture X Rewards Credit Card (learn more) has a $395 annual fee, and it’s also the premium card that might be easiest to justify, 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 those 10,000 miles are worth $170 to me — but even if you redeem them for one cent each, that’s $100 in value. So by my math you’re getting $470 worth of value with those two perks, but at a minimum you’re getting $400 in value, more than the annual fee.

But that’s only the tip of the iceberg when it comes to Venture X benefits, as you’re basically getting a bunch of other things thrown in. The Venture X offers 2x miles per dollar spent, making it one of the most rewarding cards for everyday spending. The Venture X also offers a Priority Pass™ membership and access to Capital One Lounges and Capital One Landings. Then the card offers perks like primary rental car coverage and cell phone protection.

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 (learn more) has a lot of similarities, and can absolutely be worth it.

Chase Sapphire Reserve Card value proposition

The Chase Sapphire Reserve® Card (learn more) has a $795 annual fee, and is probably the most popular premium card with younger generations, given how well rounded it is.

How do I justify the annual fee? Well, the Sapphire Reserve offers a $300 annual travel credit, a $300 annual dining credit, and $500 annual hotel credit. Obviously those perks alone can more than cover the annual fee, though there is some nuance to maximizing them. The travel credit is straightforward and the dining credit is relatively easy to use, while the hotel credit requires booking a certain way.

But the Chase Sapphire Reserve offers many benefits beyond that. For example, the Sapphire Reserve offers excellent bonus categories for spending, including 4x points on direct airfare and hotel purchases, plus 3x points on all dining purchases. The Sapphire Reserve also gives you the ability to redeem all of your Ultimate Rewards points at the best rate possible, including when moving points to transfer partners, like World of Hyatt.

Next, the Sapphire Reserve 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 Sapphire Reserve also 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.

If you’re looking for a business card instead, the Sapphire Reserve for Business℠ (learn more) could be worth it, though just keep in mind the benefits do differ somewhat.

American Express Platinum Card®

The American Express Platinum Card® (learn more) has a  annual fee (Rates & Fees), so it’s among the most expensive premium cards out there. Arguably the card set the standard for premium cards, though nowadays its value proposition can be pretty polarizing.

Fortunately I find the Amex Platinum’s annual fee to be quite easy to justify, thanks to the potentially thousands of dollars in credits it offers. The Amex Platinum offers up to $600 in annual hotel credits, up to $400 in annual Resy credits, up to $200 in annual Uber credits, up to $200 in annual airline fee credits, and more. To me, this card is really about the credits. (Enrollment is required for select benefits)

Beyond that, the Amex Platinum offers a variety of perks, including the most comprehensive airport lounge access of any card. You get a Priority Pass™ membership, limited access to Delta Sky Clubs® (when flying Delta same day), access to Amex Centurion Lounge access, and much more.

The one downside to the Amex Platinum is that it’s not actually very rewarding for everyday spending, and doesn’t have many bonus categories. The only thing that gets me excited is to earn 5x points on direct airfare purchases, up to $500,000 per calendar year, and then 1x points.

If you’re looking for a business card instead, The Business Platinum Card® from American Express (learn more) 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 Legend Mastercard® (learn more) has a $695 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 the Citi AAdvantage Executive 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 40,000 bonus Loyalty Points per year, up to $120 in annual credits with Avis and Budget, 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 (learn more) has a $550 annual fee (Rates & Fees). 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 the Hilton Aspire Card annual fee? Benefits include Hilton Honors™ Diamond Status for as long as you have the card, an anniversary free night award annually, which can be redeemed at a property costing up to 250,000 Hilton Honors points, up to $400 in annual Hilton resort credits (get up to $200 in statement credits semi-annually for eligible purchases made directly with participating Hilton resorts), up to $200 in annual airline flight credits (get up to $50 in statement credits each quarter, for a total of up to $200 back each year, on flight purchases made directly with an airline or through AmexTravel.com), and more.

Personally I think the Hilton Diamond elite status and anniversary free night award alone justify the annual fee on the Hilton Aspire. Then if you add in the Hilton resort credits and airline flight credits, you can potentially come out way ahead with this card.

What’s the best alternative to premium credit cards?

Many people assume that high annual fee cards must also be rewarding for actual spending. While that’s sometimes the case, it’s by no means consistently the reality. Some premium cards are more lucrative for spending, while others aren’t.

So while premium cards may be needed to unlock certain perks, like some kinds of airport lounge access, it’s absolutely not needed to get a great return on spending. As a matter of fact, many of the best cards for actually spending have lower or even no annual fees.

Some of the most lucrative cards for spending include the American Express® Gold Card (learn more), Capital One Venture Rewards Credit Card (learn more), Chase Sapphire Preferred® Card (learn more), and Citi Double Cash® Card (learn more).

Premium credit card value FAQs

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 Amex Platinum and Chase Sapphire Reserve might take a little more work to maximize, but it’s still not too hard to make the math work, assuming you value airport lounge access, and are willing to put the effort into maximizing the credits.

Meanwhile if you’re loyal to a specific airline or hotel group, there’s also a lot of value to picking up the most premium card in the collection, whether it’s the Citi AAdvantage Executive or Hilton Aspire.

The one caution I’d add is that actually getting good value from premium cards requires putting in a lot of effort, and understandably, that’s not something everyone wants to do. Shocking as it might be, not everyone’s life revolves around maximizing credit card perks. 😉 Also, airport lounges sure have changed over the years, and while the quality is often great, crowding has really made these lounges lose some of their luster.

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: American Express Platinum Card® (Rates & Fees), and Hilton Honors American Express Aspire Card (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.