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Feb 10

Are annual fees on Credit Cards worth it?

Is It Worth Paying Annual Fees on Credit Cards?

This is an often asked question and no doubt something that you’ve probably considered whilst you make your selection on which credit card to chose. There are variety of cards out there, all with their own benefits, and while some may be free some cost $49, $89, 175$ or even upwards of 500$ per year. A cynic in you may say that’s a lot of money out-of pocket to have the privilege of spending your own hard money. And while on the surface that may be true, let’s look — in a better detail — the benefits that you can extract from one of these cards, and just to make it entertaining let’s go for one has a $450 annual fee.

American Express Platinum Card

Are annual fees on Credit Cards worth it?

The Platinum card is the second highest tier card you can get from American Express, the top of the tear lies with the Centurion Card, which the rumor is you have to have a consistent monthly spend of $200,000 to even be considered for an invite — you can’t publicly apply for it.

On the surface, a card that doesn’t earn you any category bonus, comes with fairly low sign-up bonuses and has a $450 annual fee that’s not waived seems not only extravagant but also like a complete rip-off.

Benefits & Value

This is not a card that I recommend that you use as your daily card, simply because you can earn more points, or even cash back with [other cards] (http://travelsavvydad.com/shopping-portals/) out there. But, this card does come with a few awesome benefits that we as a family regularly use

  • Lounge Access to Delta and other around-the-world lounges
  • $200 airline credit
  • TSA Pre Reimbursement

Lounge Access

Many times I’ve written about having Lounge Access when you’re traveling with a toddler, and to put it simply: It’s WORTH IT!. The cost of Delta Lounge Access is $29 per person alone, so if you’re traveling 3 times a year you can knock off $100 your annual fee cost. Considering how much food and drinks (both alcoholic and not) cost in an airport the price and convenience of private space to us is completely justifiable. Perhaps the best benefit is that you don’t even have to fly with Delta, you can be flying any airline and utilize the lounge anyways.

$200 Airline Credit

This is also an excellent benefit that many people underestimate, or even worse don’t use. Anytime you exceed your allowed check-in baggage, pay for it with your Amex Platinum card, the fees will be reimbursed, anytime you have to purchase anything on the airplane it will also get reimbursed, and while you can’t purchase tickets and get them reimbursed directly, there are ways that you can purchase airline gift cards in denominations of $50 and these will be reimbursed. These gift cards can then be applied towards a cost of airplane ticket, up to $150 per ticket per person, so you can apply $150 for one person’s ticket and $50 towards your spouse’s.

TSA Pre

Are annual fees on Credit Cards worth it?

While this is not something that you may consider, especially since it costs $85, on your own, the Amex Platinum card reimburses you the application fee. Where we fly out of, MSP, it seems like if you don’t have Pre access you’re stranded in completely unreasonably long lines, so the Pre access is a blessing to have. And considering that you don’t have to take off your shoes — that alone is worth it!

Final Thoughts

Yes, paying annual fees for credit cards can seem excessive and not worth it, especially when the sum is $450. But, when you start to consider how much you spend out of pocket on yearly travel while you’re in an airport, for checked bags, having a credit card that grants you these privileges for a fee all of a sudden will start to make sense. In the examples above you can redeem, almost immediately, $385 of those annual fees. Considering that we try to travel more than 3 times a year the card completely pays for itself, and then some.

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