A couple of weeks ago I wrote a post about the 21 credit cards that I have right now. When people who aren’t miles & points enthusiasts find out how many cards I have they’re often shocked, though I’d like to think my card portfolio is easy to justify, given the benefits I get. Yes, I actually pay a lot in credit card annual fees, but I’d like to think that I get more back in value.
Reader Andrew H left the following comment on that post:
I count a total of $3,187 in annual fees on those 21 cards on a yearly basis. That’s wild. Only 4 of your cards have no annual fee. You travel all the time so most of these make sense but I have to think that you got some of these just for the bonus and will cancel.
It’s an interesting point, so in this post I wanted to do an analysis of my card portfolio, and in particular how I can justify the card annual fees. How much of those annual fees do I allocate to helping me maximize the points I earn for my credit card spend, and how much of those annual fees do I allocate to the long-term perks offered by the cards, which have nothing to do with how much I spend on the cards?
My ~$2,800 in credit card annual fees
First, here’s a chart with some of the cards that I’ve had for at least 12 months, along with the annual fees, starting with the most expensive:
As you can see, this includes many cards, and doesn’t include a few of the cards that I’ve acquired within the past year, which I haven’t necessarily decided what to do with yet.
It goes without saying that this is a lot of money to spend on annual fees. I also realize I travel a lot more than most, and that I’m fortunate to be in a position where I can pay this much in credit card annual fees (even if the numbers check out). In addition to helping me maximize the points I earn for credit card spend, these cards offer all kinds of additional perks, including the following (Enrollment is required for select benefits):
- A fourth night free hotel benefit, that saves me thousands of dollars per year
- Annual travel credits — a $300 annual travel credit, a $250 annual airline credit, a $200 annual airline fee credit, up to $199 back on a CLEAR Plus membership every year
- Anniversary free night certificates — two with Marriott, one with IHG, and one with Hyatt
- Other annual credits — an up to $200 annual Uber credit and up to $100 annual Saks credit
- Access to Amex Centurion Lounges, Delta SkyClubs, American Admirals Clubs, and Priority Pass lounges
I’d rather allocate annual fees to perks than bonus categories
When doing this numbers exercise, I’d always rather allocate annual fees to perks rather than the bonus categories offered by cards. Furthermore, my goal isn’t to put an exact dollar value on perks, but rather to look at whether or not they cover the annual fee.
There are a couple of reasons for this. First of all, the reason I don’t provide an exact number value for what I think the perks are worth is because that can vary year-to-year. When I use a hotel free night certificate on a card with a $75 annual fee, I might have redeemed that two years ago for a night that would have cost $400, while I redeem it last year for a night that would have cost $200. For me the key detail in doing the math is to acknowledge that I’m getting more value than what I spent, which is the case in both years. This is an ongoing analysis that needs to check out every year, or else I’ll cancel a card.
I also prefer allocating the fees to perks whenever possible because I find that makes the math easier. That’s because the value of bonus categories is highly relative. In other words, I would value a card differently that earns 5x points in a specific category based on whether the alternative is a card that earns 3x points or a card that earns 1x points.
Annual fees I allocate to perks
As I explain my justification for having a card, I’ll share the amount of the annual fee I allocate to the perks. Then in the next section we’ll look at what cards that leaves, and how I allocate that to the cards’ rewards for spend.
So here we go…
The Platinum Card from American Express has a $695 annual fee, and I’d say I value the $200 annual airline fee credit, $200 annual Uber credit, and $100 Saks credit at a total of about $400. Then I easily get another $150 of value from the lounge access offered by the card, including Centurion Lounge access, Delta SkyClub access, and a Priority Pass membership. And don’t forget up to $199 back on a CLEAR Plus membership every year. On top of that, I get 5x points on airfare purchased directly from airlines, which is the icing on the cake. (Enrollment is required for select benefits)
The Amex Platinum Card comes with Amex Centurion Lounge access
The Citi Prestige Card has a $450 annual fee, and offers a $250 annual airline credit, so the real out of pocket on the card is $200 per year. I save literally thousands of dollars per year on the card using the fourth night free hotel benefit, though obviously I spend more on hotels than most. So that covers the annual fee.
I’ve saved a lot of money with the Citi Prestige fourth night free benefit
The Chase Sapphire Reserve is a card I have primarily for spend, but it does offer a $300 annual travel credit that’s more or less worth face value, since it can be applied towards any travel coded purchase. Since the card has a $550 annual fee, I view the real cost of having this card as being $250 per year.
The Citi® / AAdvantage® Executive World Elite Mastercard® is a card that I have primarily for lounge access but don’t actually spend much money on. The card has a $595 annual fee and offers an Admirals Club membership for the primary cardmember.
The Citi AAdvantage Executive Card offers Admirals Club access
The Marriott Bonvoy American Express Card and Marriott Bonvoy Business® American Express® Card ($125 annual fee (Rates & Fees)), and each offer an anniversary free night certificate valid at a property retailing for up to 35,000 points per night. I value that more than the annual fee.
The World of Hyatt Credit Card (which has a $95 annual fee) offers an anniversary free night certificate valid at a Category 1-4 property, which I value at more than the annual fee.
The information and associated card details on this page for the Marriott Bonvoy American Express Card has been collected independently by OMAAT and has not been reviewed or provided by the card issuer.
Last year I used my certificate at the Park Hyatt Saigon
The IHG Rewards Club Select Credit Card and IHG Rewards Premier Credit Card (which have annual fees of $49 and $99, respectively) offer an anniversary-free night certificate valid at a property retailing for up to 40,000 points per night. I value that at way more than the annual fee.
Redeem your certificate at the Crowne Plaza Changi Airport
The Radisson Rewards Premier Signature Visa Card offers an annual bonus of 40,000 Radisson Rewards points, which I value at more than the $75 annual fee. I am just building up a balance at this point, but I imagine at some point I’ll find a good use for them.
The JetBlue Plus Card has a $99 annual fee, and offers 5,000 point bonus on the account anniversary every year, plus a 10% refund on redemptions, and I think that more or less makes it breakeven with the annual fee. On top of that you can get free bags when flying JetBlue, which is how the value of this card quickly adds up.
Annual fees I allocate to credit card spend
This brings me to the cards that I have for actually maximizing my credit card spend. First, to cover the cards mentioned in the previous section, The Platinum Card from American Express is hugely valuable to me, given that it offers 5x points on airfare purchased directly with airlines, though fortunately, I don’t even have to account for that benefit with the annual fee due to the other perks.
The Chase Sapphire Reserve offers triple points on dining and travel and allows me to maximize the points I earn on three other Chase no annual fee cards (covered below), so I find that to be worth the $250 annual “out of pocket.”
The AAdvantage Aviator Silver Mastercard is a tricky one. While I don’t really want to spend money on an American Airlines card, spending $50,000 on the card per year earns me 6,000 elite qualifying dollars, 10,000 elite qualifying miles, and a companion certificate. I’m still not sure I should be doing this, but for I used the card last year and this year, and it has a $195 annual fee.
Then the Amex EveryDay Preferred Card offers 3x points on the first $6,000 spent annually at US supermarkets, 2x points at US gas stations, and a 50% points bonus when you make 30 transactions per billing cycle, so in the end I find that to be worth it for the $95 annual fee.
The information and associated card details on this page for the Amex EveryDay Preferred Credit Card has been collected independently by OMAAT and has not been reviewed or provided by the card issuer.
Then there are the following four no annual fee cards that I have to help me maximize spend:
- The Blue Business® Plus Credit Card from American Express — 2x Membership Rewards points per dollar on the first $50,000 spent annually (1x after that)
- Ink Business Cash Credit Card — 5x points on the first $25,000 spent annually at office supply stores, and on cellular phone, landline, internet, and cable TV services, and 2x points on the first $25,000 spent annually at gas stations and restaurants; points can be combined with Ultimate Rewards points earned on other cards
- Chase Freedom FlexSM — 5x points in rotating quarterly categories, and these points can be combined with Ultimate Rewards points earned on other cards
- Chase Freedom Unlimited — 1.5x points in non-bonused categories, and these points can be combined with Ultimate Rewards points earned on other cards
And that’s it!
Bottom line
Yes, I pay a lot in annual fees, but I also get a ton of value out of the cards I have. This includes some pretty awesome perks, from free hotel nights to access to all kinds of lounges. For the most part that covers the annual fees on my cards.
The way I view it, the only two cards where I’m really paying directly for maximizing my spend are the Chase Sapphire Reserve and Amex EveryDay Preferred Card, for a total of $345 “out of pocket” per year. I’d like to think I get a disproportionate amount of value from those cards too.
Obviously, all of this math is a bit fuzzy, since there are different ways to go about calculating the value you get from cards. Hopefully, this is at least an interesting look at how I approach things.
The information and associated card details on this page for the Amex EveryDay Preferred Credit Card has been collected independently by OMAAT and has not been reviewed or provided by the card issuer.
The following links will direct you to the rates and fees for mentioned American Express Cards. These include: The Blue Business® Plus Credit Card from American Express (Rates & Fees), The Platinum Card® from American Express (Rates & Fees), and Marriott Bonvoy Business® American Express® Card (Rates & Fees).
I think I might have Ben beat on the annual fees and maximizing bonus categories and travel benefits. And let's not forget the other fees we incur to play the points and miles game. And, Ben might be eligible to deduct as a business expense on tax return since blogs about travel credit cards and earns credit card sign up click thru fee bonuses, assuming One Mile At A Time is a business and not...
I think I might have Ben beat on the annual fees and maximizing bonus categories and travel benefits. And let's not forget the other fees we incur to play the points and miles game. And, Ben might be eligible to deduct as a business expense on tax return since blogs about travel credit cards and earns credit card sign up click thru fee bonuses, assuming One Mile At A Time is a business and not a spare time hobby project.
- AX Platinum
- AX Gold
- AX Business Gold
- JP Morgan Reserve
- Chase ink Plus (no longer available to new applicants)
- Capital One Venture X
- BMO Harris Diners Club Carte Blanche MasterCard (no longer available to new applicants, excellent transaction consolidation on BMO website replacing now-deprecated Intuit Mint)
- RBC Visa Signature Black Plus (now the only AA 1 to 1 points transfer partner)
- AX Blue for Business (no annual fee)
- Chase Freedom Unlimited (no annual fee)
- Chase United Gateway Visa (no annual fee-unlocks elite-only United award capacity and somehow gets me occasional invites to the United invite-only restaurant in Newark Terminal C and nearly constant bonus point offers)
- Bank of America Free Spirit Airlines Mastercard (no annual fee-occasional use resets expiration on Free Spirit points and Group 1 priority boarding)
- Wells Fargo BILT Rewards Mastercard (no annual fee)
- AwardWallet (password manager keeps track of any associated points and elite statuses)
- MightyTravels (search for best cash airfare and premium hotel rates by region)
- AwardLogic
- Point.me
- PointsYeah
- FirstClassFlyer
- Microsoft 365 (to keep track of airline and hotel alliances and other points and miles earning and travel information in a structured way in Microsoft Excel)
- IRS Estimated Tax Payments (processing fees so 2X points and so amounts included on my credit card expenses not just checking accounts)
- Certain business expenses have credit card processing fees so all my business expenses earn credit card transferrable travel points. Even businesses that only break even still rack up tons of travel points on their expenses (and have tax synergies to the businesses that actually make money)!
- AwardNexus (lifetime prepaid, sort of)
- Dollar Flight Club and Concierge (lifetime prepaid)
- CardPointers (lifetime prepaid - alerts for bonus points offers on shopping)
- SimpleMind and BigHairy Goal (lifetime prepaid - mind mapping software for Mac and iPhone - to restructure and reorganize points and miles Excel spreadsheets when the info no longer fits on a single page as alliances and award programs and travel resources change)
- various free flight alert services and points/fare search services and blog mailing lists and airline loyalty programs/promo lists and free software useful for travel
You would not do well in Australia as your new employee would advise. Amex Platinum Card I have just been advised will now be A$1450.00 p.a.(US$1071.00on today’s exchange rate) and it has less than half the benefits of its US counterpart . You cannot even transfer points to American or United , BA etc but you can to Virgin Atlantic who do not fly to Australia no 5 points per dollar on airfares but 2 only. We are being right royally screwed in Australia.
That is because Australia passed a law capping credit card transaction processing fees that merchants pay when consumers use the card for those purchases. USA frequent flyers will also be screwed if our government caps credit card processing fees.
I pay a lot on annual fees and I'm definitely not Lucky nor in the airport nearly as often as him. I have Amex Plat for the lounge access. Plus authorized users for my kids' access.... I recently needed to cancel an award booking with my airline of the year. Instead of losing $300.00 to put back the miles, I recouped $150.00 from the cc. (I had already used some of the funds for bags...
I pay a lot on annual fees and I'm definitely not Lucky nor in the airport nearly as often as him. I have Amex Plat for the lounge access. Plus authorized users for my kids' access.... I recently needed to cancel an award booking with my airline of the year. Instead of losing $300.00 to put back the miles, I recouped $150.00 from the cc. (I had already used some of the funds for bags for the year.) I don't have all the cards he does cause some of them don't work for me. For example, I rarely stay in the same hotel for 4 nights so I don't need Citi Prestige. Many hate the Marriott card, but I love the free night with them since I'm not really a city dweller and they have awesome hotels in some places. (College football for example!!)
Forgetting the links and ads for the credit cards that you provided, it is a simple calculation, does the value of the card and rewards equal more than the annual fee. That's about it.
Tax.
An article like this is pretth meaningless without mentioning tax. Many people - and you are probably an extreme example - use personal credit cards for business expenses. That can be very tax effective. My guess is that if you showed the situation after tax, the financial benefit of the various cards for you would be much, much more obvious?
Just scale down what Lucky does Lots of Affordable trips for me. Few Retired BC workers have traveled to Far Away places like me .It's all in the Blogs Read and Learn..
CHEERs
I was so caught up in the CSR mania last year that I've been waiting terribly impatiently to get under 5/24. Then, I finally make it, and now I don't think I would really benefit from it. I have most of your cards, plus a few others. I do travel a fair amount, but I already get 3x air with Amex gold (and am considering the plat for the 5x--but I have plat biz, so...
I was so caught up in the CSR mania last year that I've been waiting terribly impatiently to get under 5/24. Then, I finally make it, and now I don't think I would really benefit from it. I have most of your cards, plus a few others. I do travel a fair amount, but I already get 3x air with Amex gold (and am considering the plat for the 5x--but I have plat biz, so not sure). For hotels, if not using points or Citi prestige for free night, I'm using the chain card since they usually pay more per night.
So, as I see it, the only q is: is the difference in 3x on food vs. 2x on food (from CSP, among others) worth $150? Obviously, a new bonus remotely close to the original 100k would make all the difference, but I don't see that happening any time soon.
So, now what to seek with my new, virginal, 3(!)/24 status?! Any suggestions?
@vijay read the disclosures at the bottom of the page.
My husband and I aren't as bad, but definitely spend more on AF than I ever thought I would. But it pays back many times over. You can't just look at the total amount of fees, you have to look at the value of each card independently. For example, my 3 Delta Platinum's more than pay for themselves with the companion tickets. And even though we already have Priority Pass through the CSR, the Hilton...
My husband and I aren't as bad, but definitely spend more on AF than I ever thought I would. But it pays back many times over. You can't just look at the total amount of fees, you have to look at the value of each card independently. For example, my 3 Delta Platinum's more than pay for themselves with the companion tickets. And even though we already have Priority Pass through the CSR, the Hilton Aspire card still saves us money by not requiring us to pay extra for rooms with lounge access. CSR isn't much after the travel credit, and my first year I had a rental car flat tire claim reimbursed which covered the rest of the fee. But I am constantly reevaluating each card that has AF's. For example we are dropping the SPG's now that the return on spend is terrible. In general I find I am dropping more cheaper cards and adding more premium cards, because the payoff can be much greater with the premium ones (ie I've been considering the Citi Prestige for the 4th night free.)
Lucky, I guess you're under 5/24 if you were able to just easily grab the new IHG and WoH cards..
@ Justin -- Neither of those cards are subjected to 5/24, but I don't have either of them. I have the older versions of them, as shown in the chart.
@Lucky can you add me as an AU to your Citi® / AAdvantage Executive World Elite Mastercard? I’m tired of slumming it in Priority Pass lounges and there aren’t enough Centurion lounges. Thanks in advance.
Love all the comments complaining from the perspective of "Most of us do ____" which of course reflects that one commenter's tendencies and not "most of" anyone.
Read the posts and apply the logic to your own situation. Or don't.
I'd be interested to know what kind of spending you put on these cards (in aggregate) per month. Most of us that aren't using it for a business or traveling 365 days a year or paying and then getting reimbursed by corporate probably average 3-6k per month for normal household/travel spending.
Understanding what percent of your total spend is credit card fees would give us an idea what might be reasonable for us (fees as a percent of spending).
You didn't justify the CSP ... though I find that if you have it, product converting it to a second Freedom card to double-dip on the quarterly bonuses is a nice way to go.
Why do you have CSP? Makes no sense!!!!
@ Zara @ madgoat @ Drew -- I'm sorry, that was a typo on my part. Updated now.
Jesus Christ, how many credit card posts do you need to hawk?!
My wife and I have several cards in common and we got 2 AA cards for the bonus. I'm thinking we should cancel one of the AA's and maybe some of the duplication, though it could be good to have a lot of credit.
We do have problems with AX Platinum's airline credit as we don't often have these tangential fees and UA stopped the Travel Bank which was a quick way to store money...
My wife and I have several cards in common and we got 2 AA cards for the bonus. I'm thinking we should cancel one of the AA's and maybe some of the duplication, though it could be good to have a lot of credit.
We do have problems with AX Platinum's airline credit as we don't often have these tangential fees and UA stopped the Travel Bank which was a quick way to store money for the odd trip as they do fly from our local airport.
I like your article because it encourages us to examine our portfolio of cards every year and see what is working.
I have also heard that there may be incentives to reup so may try that.
Several days ago, you promised to share, in a future post, your strategy for Marriott travel packages as the Aug. 1 possible decision deadline approaches. Can you update on when we might expect to see that post?
@ David Cameron Beckwith -- I hope to have that published by tomorrow, I'm working on a post about it as we speak.
No reason to have the CSP with the CSR unless you app'd it for the bonus, in which case dump it after the first year. Mine became a CFU.
Interesting post!
Just out of curiosity, is this website your fulltime job and main source of income? Do you collect your referral bonuses as points or cash or both?
I am surprised because I see zero advertisements on the website and am amazed by how much travel you do (while often on points but still requiring significant cash).
@ Vijay -- Yes, this is my full time job. :)
Don't forget about calling in an receiving retention bonuses. So far for me, 2 for 2. Both on Amex surprisingly.
I really like this post. I never put as much effort into it, but we are always looking at which cards represent value vs which do not. Everyone is different but with some cards, work reimbursement of the charges more than covers certain fees along with a free night on certain hotel cards. One benefit that seems to help you, but not me and my wife is the 4th night free option. I guess we...
I really like this post. I never put as much effort into it, but we are always looking at which cards represent value vs which do not. Everyone is different but with some cards, work reimbursement of the charges more than covers certain fees along with a free night on certain hotel cards. One benefit that seems to help you, but not me and my wife is the 4th night free option. I guess we tend to move around a lot when traveling and stay 3 nights many times and when we do stay 4 nights, most times its on points. Cool exercises and seeing what represents value and where you derive it from.
Not sure, but could you earn on referrals without actually having some of these cards? Isnt that more of the reason?
@ John -- That's not a factor in me having any of these cards. As you can see (hopefully), the math checks out based on my usage of the cards.
One thing I try to be careful of with my analysis is what I'll call "forced spend" in order to maximize value. This is particularly the case with the free hotel nights.
So for example, I have the SPG Amex and now the Marriott Rewards Plus Visa, both of which offer a free night that I agree can easily cover the annual fee. However, given my life circumstances between work and family, I have...
One thing I try to be careful of with my analysis is what I'll call "forced spend" in order to maximize value. This is particularly the case with the free hotel nights.
So for example, I have the SPG Amex and now the Marriott Rewards Plus Visa, both of which offer a free night that I agree can easily cover the annual fee. However, given my life circumstances between work and family, I have trouble traveling on a weekend to use even one free night so forget about taking two nights off just to make sure I use both free nights (that's the forced spend part). That's why I'm going to cancel my SPG Amex before the next fee is due because I don't want to force myself to go hunting for a weekend trip that includes an SPG property up to 35k points just so I use that free night.
I also take a look back at my Amex Offers spend when weighing my cards. Obviously some of them incentivize a bit of net new spend I wouldn't have already made, but then there are others (like $60 back on SPG properties I'd already stay with for work travel) that I mentally deduct 100% from the annual fee.
Why do you have the CSP if you have the CSR?
Doesn't hurt that you can write off some, if not all, as a business expense.