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Are high cost credit cards worth it? Well, that’s a tricky answer. It really depends on what you are looking to get out of them. If you don’t enjoy travel and prefer to stay at home, then the answer is probably not.

However, if you love to travel, you want to experience more luxuries when you are away from home, and you don’t mind spending a little money upfront to unlock huge benefits, then the answer is a definite YES!

Today we are going to look at 4 credit cards. Each of them has a several hundred dollar annual fee. At first glance, it seems outrageous to pay that much just to have a credit card, but wait until you see our analysis to make that judgement. You might just be surprised.

For each card, we will show you the main benefits that make paying these fees worth it. More importantly, we will show you how having these cards can help you to upgrade your travel with increased comfort, better service, and an overall easier experience.

All of these cards come with far more benefits than what we have listed below. If you think one of them might work for you, be sure to read the benefits in detail to see all of the other smaller perks you get. Although the fees seem high, you can get incredible value out of these cards, especially in the first year you have them.

Now let’s take a look at some of the top benefits for 4 examples that I think easily answer the question: Are high cost credit cards worth it? When possible, we will include the value of each benefit so you can compare the total value you would get from each card to the annual fee for that card.

The Top 4 High Annual Fee Credit Cards

High Annual Fee Credit Cards

High-end credit cards can have annual fees upwards of $500 a year. Are those high fees worth paying?

Chase Sapphire Reserve

Annual Fee: $450          

Current Bonus: 50,000 points after $4000 in 3 months ($625)

  • 3x points on travel and dining purchases (4.5% back in points value)
  • 1.5 cents per point when redeeming for travel directly through Chase
  • $300 Annual Travel Credit ($300)
  • $100/$85 Global Entry or TSA Pre-Check Application Credit ($100)
  • Priority Pass Select Lounge Membership ($28-$32 per visit)
  • Primary Rental Car Insurance
  • Trip Cancellation, Trip Delay, Baggage Delay, and Lost Luggage Coverages

Since you can easily get 1.5 cents per point in value for Ultimate Rewards points when redeeming for travel with this card, that is the minimum value we used when calculating the value of the benefits listed above. Ultimate Rewards points can also be transferred directly to many airline and hotel loyalty programs. By doing this, you open up the potential for up to 10 times more value for your points.

As you can see, the signup bonus alone eclipses the annual fee for the Chase Sapphire Reserve in the first year. In addition, you can get another $400 in value from the Annual Travel Credit and Global Entry Credit. Other benefits like the Priority Pass Membership and insurance and delay coverages when you travel just add to the value of the card.

Compare this card with other similar cards here.

Citi Prestige Card

Annual Fee: $450          

Current Bonus: 40,000 points after $4000 in 3 months ($500)

  • 3x points on air travel and hotel purchases (3.75% back in points value)
  • 2x points on dining and entertainment purchases (2.5% back in points value)
  • 1.25 cents per point when redeeming for airfare directly through Citi
  • $250 Airline Travel Credit ($250)
  • $100/$85 Global Entry or TSA Pre-Check Application Credit ($100)
  • 4th night free on hotel bookings of at least 4 nights
  • Priority Pass Select Lounge Membership ($28-$32 per visit)
  • Primary Rental Car Insurance (when outside of the US)
  • Trip Cancellation, Trip Delay, and Lost Luggage Coverages

When redeeming your ThankYou points for airfare through Citi, you get a 1.25 cent per point value, so that is what we used for calculating the values shown above. Citi ThankYou points can also be transferred to multiple airline loyalty programs. When redeeming through airline programs for premium travel, the value of your points can be significantly higher.

Again, with this card, the signup bonus is worth more than the first year annual fee. Going forward, you can easily get more value than the annual fee if you take advantage of the Priority Pass Membership, the 4th Night Free benefit, or even use a few of the miscellaneous travel benefits.

Platinum Card from American Express

Annual Fee: $550          

Current Bonus: 60,000 points for $5000 in 3 months ($600)

  • 5x points on airfare and pre-paid hotel purchases (5% back in points value)
  • $200 Airline Incidentals Travel Credit ($200) (calendar year)
  • $200 in Uber Credits ($200)
  • $100/$85 Global Entry or TSA Pre-Check Application Credit ($100)
  • Lounge Membership including Centurion, Priority Pass, Escape, Airspace, and Delta SkyClub Lounges ($28++ per visit)
  • Elite Status with Hilton, Starwood, and National Rental Car
  • Boingo Preferred Wireless Internet Plan ($468)

Although for our values above we have just used the base value of 1 cent per point for Membership Rewards points, it is possible (and recommended) to transfer your points directly to airline loyalty programs to greatly increase the value of the points.

You can see that the first year case for this card is quite strong. Since the Airline Incidentals Credit is awarded per calendar year instead of per cardmember year, you can actually get this twice in your first year with the card. That $400 plus the $600 minimum value for the signup bonus points quickly surpasses the high annual fee of $550. Add in the Uber credit, Global Entry Credit, and a few lounge visits and you can quickly see how this card is worth getting.

Find this and other American Express cards here.

Business Platinum Card from American Express

Annual Fee: $450          

Current Bonus: 50,000 points for $10,000 + 25,000 points for an additional $10,000 in 3 months ($1125)

  • 5x points on airfare and pre-paid hotel purchases booked through Amex Travel (5% back in points value)
  • 1.5 points per dollar on $5000+ transactions (1.5% back in points value)
  • $200 Airline Incidentals Travel Credit ($200) (calendar year)
  • $100/$85 Global Entry or TSA Pre-Check Application Credit ($100)
  • Lounge Membership including Centurion, Priority Pass, Escape, Airspace, and Delta SkyClub Lounges ($28++ per visit)
  • Elite Status with Hilton, Starwood, and National Rental Car
  • 10 Complimentary GoGo Wireless passes ($160+)
  • Boingo Preferred Wireless Internet Plan ($468)

When redeeming your points with the 35% rebate through Amex Travel, your points become worth a little over 1.5 cents per point, so that is the value we used above. Again, as with the personal Platinum Card, your Membership Rewards points can be transferred to a variety of airline loyalty programs to get even higher values.

With the highest signup bonus value of any of our example cards and a lower annual fee than the personal Platinum Card, the Business Platinum Card is a great value if you have a qualifying business so that you can get one. The airline credit is again given per calendar year so you can double that in your first year of card membership. Add that to the Global Entry Credit, a few lounge visits, and free wifi all over the world, and you get a card that is worth a serious look.

Find this and other American Express cards here.

To Sum It Up

Turkish

The Turkish Airways Lounge at IAD is a member of Priority Pass, so you can get free entry with any of the premium credit cards we have discussed above. They have delicious food, refreshing drinks, and plenty of space to relax before your next flight.

We started out to answer a seemingly simple question. Are high cost credit cards worth it? Did we provide a definitive answer? I guess not, but I think we did shift the view from “maybe” over to “probably”, as long as you like to travel and like nice things.

If even after reading about the great value you can get out of these cards, you aren’t quite ready for a huge annual fee, check out our post about the best low annual fee points and miles cards. That may be a better place for you to get started.

However, if you are ready to jump in on one of these premium cards, make sure you know what you’re getting into. From the perks like lounge access and hotel elite status to the big signup bonuses you will get, the way you travel is about to take a serious step up. You may never want to go back.

Whatever card you choose, read through the benefits in detail and think through how you will take advantage of them. Having a card with great benefits is one thing, but if you don’t use them to their full extent, you may be wasting your money on that high annual fee.

Personally, I currently have all of these cards except for the one Chase won’t let me get. I maximize the benefits and get far more value out of these cards than I pay in annual fees.

For now, look at your travel situation. Decide if you are happy with the way things are or if you want an upgrade. If one of these cards seems right for you, take that first step and apply for a points earning credit card. Or you can check out some of Traveling Dad’s favorite offers here. Maybe I’ll see you in the Centurion Lounge on your next trip.

Happy Travels!

 

RESPONSIBLE USE OF CREDIT WARNING: Points and miles from credit card spending are amazing if you never carry a balance on your card and never pay interest. This “hobby” — though it can quickly become a way of life — is for those who can use and pay off credit cards in full each month. Understand the FICO credit score equation, how opening and closing cards affects your score, and how you are most likely to be approved for the specific card you want.

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