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Credit card annual fees are a necessary evil in the travel space. Sure, there are plenty of cards with no annual fees or annual fees that are waived for the first year, but there is a rising number of cards that have high annual fees from the start.


And with so many great premium cards on the market, we can’t help but ask ourselves: how many annual fees are too many?

In this article, we’ll attempt to answer that question. First, we’ll run through why these cards have such high fees, and we’ll round out the article with the answer.

Sounds good? Let’s check it out.

So, why are these cards so expensive, anyway?

There’s no doubt that premium cards can be worth it, especially for frequent travelers. They come with excellent benefits like lounge access, priority boarding, and security lanes, as well as reimbursements for Global Entry access fees.

Other cards offer other annual benefits like points bonuses, free hotel nights, and more.

Each of these benefits has a real cost to the credit card issuer, and they need to make the cost back somehow—by assessing a hefty annual fee.

Determining the real cost of credit card annual fees

Like discussed earlier, premium credit card annual fees are high for a reason. But it’s important to analyze benefits-to-cost when looking at the annual fee.

Doing this is pretty simple. Just take the total value of the cash-value benefits that you’ll use, and subtract it from the annual fee.

Additionally, assess how much you’ll use the card’s other benefits like lounge access, hotel status, and airline benefits are to you. Someone using lounge benefits weekly will get far greater value than someone that only travels twice annually.

Make sure to overlook benefits you won’t use at all, too. For example, if you already have Global Entry, don’t take the benefit into account. Do the same for benefits that you have from multiple cards. After all, two Priority Pass memberships aren’t better than one.

For your first year, you may also want to take the welcome bonus into account. If a $400 annual fee gives you $1,000 worth of points, the card may be well worth getting even if you’re not sure that it will continue to be worth it beyond the first year.

So how many annual fees are too many?

It’s tough to assign a number to this, largely because a budget varies from person to person. However, we look at annual fees like this: if you’re using the card’s benefits enough to justify the cost, it’s worth paying.

Further, if annual fees are throwing off your budget, it’s time to reduce the number of cards in your portfolio. Even if the benefits outweigh the annual fee, you’re still spending real money when you pay your annual fee, regardless if there’s a travel credit.

We want to hear from you. How many annual fee credit cards do you have in your portfolio? How do you choose which to keep and which to cancel? Let us know in the comments.

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