High Annual Fee Credit Cards Are Worth It: I Made My Money Back in 1 Month

Even if you can’t stand the idea of paying to use a credit card, some high annual fee credit cards are well worth their cost.
Last updated July 29, 2022 | By Stephanie Colestock
High Annual Fee Credit Cards Are Worth It

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Many years ago, I struggled to understand why people paid annual fees on credit cards. It seemed ridiculous to pay an issuer for the right to spend my own money, so I only applied for and carried credit cards with no annual fee.

As I began exploring the world of travel rewards and cashback, I started to find value in some annual fee cards. But I still couldn’t wrap my head around those who were willing to pay hundreds of dollars a year on a premium credit card annual fee. It felt absurd!

Luckily, my mindset changed a couple of years ago, and I began to understand why high annual fee credit cards maintain such popularity: they are simply worth the expense when you do the math. After recouping my own high annual fee in only a month’s time, I am now a lifelong believer in high annual fee credit cards.

With the right spending strategy, you can make a premium card worthwhile, too. So let’s take a look at what a high annual fee is, and how to pencil out whether a premium credit card is “worth it” for you.

In this article

What is a high annual fee for credit cards?

According to a recent US News study, around 68% of credit cards today are free, meaning that they do not charge an annual fee. Of those cards that do charge a fee, the average annual cost is just under $110. There is no defined threshold for annual fee categories. However, I think most of us could agree that an annual fee that is three, four, or even five times the national average could be defined as “high.”

For the sake of this article, let’s say that a high annual fee credit card is one that charges more than $350 a year. Many of these cards are frequently referred to as “premium” credit card products, due to the value of benefits the card provides for consumers.

A few examples would be the Chase Sapphire Reserve® ($550 annual fee), the American Express® Gold Card ($250 (See rates and fees) a year), and The Platinum Card® from American Express (with a hefty $695 (See rates and fees) annual fee — terms apply).

Are high annual fee credit cards worth it?

The short answer is that yes, high annual fee credit cards are worth it. The caveat, of course, is that this is only the case if you know how to use the benefits you’re offered.

If you never travel, a $300 annual travel credit won’t do you much good. Neither will benefits like 5X points on travel purchases or a card with no foreign transaction fees.

It doesn’t matter whether a credit card charges $5 a year or $550 — if you can squeeze at least that amount out of the card’s benefits, it can be a worthwhile product to carry.

My experience with a $550 annual fee

When it came to earning travel rewards, I started out with cards like the Chase Sapphire Preferred® Card. While this card charges a $95 annual fee, it felt worthwhile to me because of all the points I was able to earn.

Over time, my eyes started opening to the value of those so-called premium credit cards, too — the ones charging hundreds of dollars in annual fees. I had once thought of them as predatory, but maybe those happy consumers and travel rewards gurus knew something I didn’t?

So a couple of years ago, I bit the bullet and applied for one of the highest-annual fee products around, the Amex Platinum Card. With some focused spending efforts, I was able to offset that first annual fee (and then some) just a few short months later, much to my delight.

But as my card anniversary approached the following year — and I was set to pay that high annual fee once again – I wondered just how quickly someone could recoup the fee on a card like this. So I gave myself a challenge and was surprised by the result.

One month.

Yep, in only 31 days, I was able to earn more in benefits from my Platinum Card than it had cost me in annual fees for that entire upcoming year. For the remaining 11 months, I was simply earning rewards and enjoying free benefits.

How I made my annual fee back in 1 month

My Platinum Card anniversary is in November, which is when I am charged that hefty $695 fee each year. So in late 2018 (when the annual fee was $550), I set out to make that money back as quickly as possible after the fee hit my statement.

I did it with a multi-tiered approach:

  1. I bought a Christmas present for my mom from Saks Fifth Avenue, using part of the Platinum Card’s $100 annual credit. (You get $50 in the first half of the year, and $50 in the second half of the year.) This not only crossed one gift off of my list, but saved me $50 in the process. Benefit: $50
  2. I decided to finally enroll in Global Entry and scheduled the required in-person interview for the day of our flight home for Christmas, while I was at the airport anyway. American Express gave me a statement credit for my $100 application fee, my interview took all of 15 minutes, and I was on my way. Benefit: $100
  3. I made sure to utilize the $200 annual airline credit during our trip home for the holidays. To do this, I chose United as my designated airline with American Express, and I booked United flights from DC to Texas. My family traveled with three suitcases to Texas and four checked bags on the way back (lots of gifts). We used the Platinum Card to pay for the $210 in baggage fees round-trip, and American Express credited our account for $200 of that. Benefit: $200
  4. Rather than pay for long-term parking on that holiday trip, we took an Uber XL to the airport. This trip cost us around $45, but American Express had already credited our linked Uber account for $35 that month. With the Platinum Card, you’ll get $15 in Uber credits per month, plus an extra $20 in December. Winning! Benefit: $35
  5. American Express offers complimentary Priority Pass Select membership for Platinum Card customers, which we took advantage of three total times on just that one trip: waiting to board our first flight in DC, during our two-hour layover in Atlanta, and again during our layover at Dallas/Fort Worth International Airport on the way home. The four of us enjoyed three full meals each, plus multiple snacks and a couple of drinks for my husband and me: 12 full meals, ~16 snacks, and 5 alcoholic beverages, which would have easily cost us upwards of $175-200 in the main terminal. Benefit: at least $175

Note: Enrollment or activation is required for select benefits.

So, let’s add all those individual numbers up:

$50 + $100 + $200 + $35 + $175 = $560 in total savings

These savings don’t even take into account benefits like my rental car upgrade in Texas (thanks to my included Hertz Gold status) or the Membership Rewards points I earned on my everyday spending. But it’s still easy to see how you can quickly recoup an annual fee — even if you aren’t able to do it in one month.

Benefits that can come with high annual fee cards

Each high annual fee credit card is unique, as are the benefits offered to cardholders. However, you can typically expect that premium cards will come with perks such as:

  • Annual travel credits
  • Premium lounge access
  • Upgraded hotel and/or rental car status
  • Purchase protection
  • Rental car coverage
  • No foreign transaction fees
  • Great introductory bonus offers

Some cards, like the Amex Gold, reward loyal cardholders: you can receive up to $240 in annual credits (dining and Uber) every year. Select benefits require enrollment.

With the Chase Sapphire Reserve, you’ll enjoy built-in trip protections each time you travel. If your trip is delayed or canceled for a covered reason, you’ll be protected for up to $20,000 per trip in non-refundable expenses. They’ll even reimburse you for up to $500 per day per person if your luggage is delayed. And you’ll get primary rental car coverage at no additional cost.

Some of the best high annual fee credit cards

Card Annual fee Benefits
The Platinum Card® from American Express $695 (Terms apply)
  • Up to $200 in annual Uber credit

  • Up to $200 in annual hotel credit through American Express Travel
  • Up to $200 in annual airline fee credit
  • Up to $240 in annual digital entertainment credit
  • Up to $300 in annual Equinox membership credit for eligible Equinox+ digital fitness app or Equinox club memberships
  • Up to $100 in annual Saks Fifth Avenue credit
  • Up to $100 in Global Entry or TSA PreCheck credit every four years
  • Up to $189 in annual CLEAR® credit
  • VIP airport lounge access and upgraded rental car/hotel loyalty status
  • Note that certain benefits require enrollment or activation.

Chase Sapphire Reserve® $550
  • $300 annual travel credit
  • Complimentary enrollment in Priority Pass Select
  • 50% bonus on points redemptions toward Ultimate Rewards-booked travel
  • Trip delay/cancellation coverage and lost/delayed baggage protection
American Express® Gold Card $250 (Terms apply)
  • $120 annual dining credit
  • $120 annual Uber credit
  • Car rental insurane and lost/delayed baggage protection
  • Note that certain benefits require enrollment or activation.

The Platinum Card® from American Express

Don’t let this card’s hefty annual fee fool you: it offers valuable benefits that far outweigh its cost. With the Platinum Card from American Express, you’ll enjoy perks such as $200 in Uber credits each year and up to $100 at Saks Fifth Avenue.

Additionally, you’ll enjoy a host of premium benefits such as:

  • Global Lounge Collection access
  • Upgraded status with multiple hotel and car rental chains
  • Fee credit for either Global Entry ($100) or TSA PreCheck ($85) enrollment
  • Fine Hotels & Resorts program

Select benefits require enrollment or activation. 

This card offers an excellent welcome bonus offer: Earn 100,000 Membership Rewards points after spending $6,000 in the first 6 months. Once you've earned your bonus points, you can then redeem those rewards for travel, statement credits, and more.

Best Luxury Travel Benefits

Intro Offer

Earn 100,000 Membership Rewards points after spending $6,000 in the first 6 months

Annual Fee

$695

Rewards Rate

5X points per dollar spent on eligible airfare (on up to $500,000 per calendar year, after that 1X) and eligible hotel purchases, and 1X points per dollar on all other eligible purchases

Benefits and Drawbacks

Benefits

  • Earn 100,000 Membership Rewards points after spending $6,000 in the first 6 months
  • Select your metal card design: classic Platinum Card, Platinum x Kehinde Wiley, or Platinum x Julie Mehretu
  • 5X points on flights booked directly with airlines or on Amextravel.com (on up to $500,000 per calendar year, after that 1X) and prepaid hotels booked on Amextravel.com
  • $200 hotel credit (minimum two-night stay required), $240 digital entertainment credit, $200 in Uber Cash, $300 Equinox credit, $200 airline fee credit
  • Access to Centurion and Priority Pass airport lounges
  • Select benefits require enrollment.
  • $695 annual fee. Terms apply.

Drawbacks

  • High annual fee
Card Details
  • Earn 100,000 Membership Rewards points after spending $6,000 in the first 6 months
  • 5X points per dollar spent on eligible airfare (on up to $500,000 per calendar year, after that 1X) and eligible hotel purchases, and 1X points per dollar on all other eligible purchases
  • Terms apply

Chase Sapphire Reserve®

With a $550 annual fee, the Chase Sapphire Reserve card definitely has a sizable yearly cost. However, the Chase Sapphire Reserve is worth the annual fee if you know how to utilize the perks, which include an annual $300 travel credit, Priority Pass Select membership, and up to $100 toward Global Entry or TSA PreCheck enrollment.

You’ll also enjoy:

  • Trip delay and cancellation coverage of up to $20,000 per trip
  • Lost luggage protection and luggage delay reimbursement
  • 50% bonus when redeeming rewards toward travel through the Ultimate Rewards portal
  • Special privileges through various rental car and hotel chains

#1 Premium Travel Credit Card

Intro Offer

Earn 60,000 points after spending $4,000 on purchases in the first 3 months

Annual Fee

$550

Rewards Rate

10X points on Lyft rides, Chase Dining purchases, hotels and cars booked via Ultimate Rewards; 5X points on air travel booked via Ultimate Rewards; 3X points on travel and dining; and 1X points on everything else

Benefits and Drawbacks

Benefits

  • 60,000 point sign-up bonus
  • 10X points on Lyft rides, Chase Dining purchases, hotels and cars booked through Ultimate Rewards
  • Priority Pass airport lounge access

Drawbacks

  • High annual fee
  • Excellent credit required
Card Details
  • Earn 60,000 points after spending $4,000 on purchases in the first 3 months
  • 10X points on Lyft rides, Chase Dining purchases, hotels and cars booked via Ultimate Rewards; 5X points on air travel booked via Ultimate Rewards; 3X points on travel and dining; and 1X points on everything else

American Express® Gold Card

At “only” $250 a year, the Amex Gold is the most affordable of the cards shown here. (I know, that’s not saying much.) However, it still offers excellent benefits for cardholders and easy ways to recoup that fee.

The Amex Gold offers up to $240 in annual credits, which is a combination of $120 dining credit and $120 Uber credit (good for Uber rides or Uber Eats orders). These credits alone can just about offset the $250 annual fee, which means you get additional benefits at almost no cost. Select benefits require enrollment.

Other benefits include:

  • Car rental loss and damage insurance
  • Protection for lost, damaged, or stolen baggage
  • 4X Membership Rewards points at U.S. supermarkets (up to $25,000 per year, after that 1X) and at restaurants, plus takeout and delivery in the U.S., 3X on flights booked directly with airlines or on Amextravel.com, and 1X on all other eligible purchases

Big Rewards for Dining Out

Intro Offer

Earn 60,000 Membership Rewards points after you make $4,000 in purchases within the first 6 months of card membership

Annual Fee

$250

Rewards Rate

4X Membership Rewards points at U.S. supermarkets (up to $25,000 per year, after that 1X) and at restaurants, plus takeout and delivery in the U.S., 3X on flights booked directly with airlines or on Amextravel.com, and 1X on all other eligible purchases

Benefits and Drawbacks

Benefits

  • Earn 60,000 Membership Rewards Points after you spend $4,000 in the first 6 months of card membership
  • Rose gold is back! Choose your color.
  • $120 in dining credits
  • $120 in Uber Cash
  • Select benefits require enrollment.
  • No foreign transaction fee
  • $250 annual fee. Terms apply.

Drawbacks

  • No lounge access benefit
  • Has annual fee
Card Details
  • Earn 60,000 Membership Rewards points after you make $4,000 in purchases within the first 6 months of card membership
  • 4X Membership Rewards points at U.S. supermarkets (up to $25,000 per year, after that 1X) and at restaurants, plus takeout and delivery in the U.S., 3X on flights booked directly with airlines or on Amextravel.com, and 1X on all other eligible purchases
  • Terms apply

How do you know if a high annual fee credit card is right for you?

The best way to tell if a credit card is right for you is to do the math. That’s the case whether you’re considering a card with a $45 annual fee or one of the high annual fee credit cards we’ve mentioned here.

To do this, you first need to look at your typical habits. Do you travel often? Rent cars and/or stay in hotels frequently? Then a card that offers annual credits, upgraded status, no foreign transaction fees, and travel protection is probably very valuable to you. Conversely, if you never leave your town, these benefits won’t do you much good and probably aren’t worth the cost.

Consider a specific card, the benefits it offers, and their value to you personally. Take my own example above: I knew if I got the Amex Platinum, I would be willing and able to take advantage of nearly every perk offered, from shopping at Saks Fifth Avenue to hailing Uber rides and upgrading rental cars when I travel. These could (and do) save me hundreds of dollars a year.

Also carefully look at the card’s introductory bonus offer. If you cannot meet the minimum spending requirement in the designated time, you’ll miss out on those points — and lose some of the value of that card. In that case, consider opting for a card with a lower spending threshold, even if it means a smaller bonus offer.

You should also analyze your everyday spending to see which rewards card would serve you best. For instance, if 90% of your credit card spending is on groceries and gas, calculate whether a card like the Blue Cash Preferred® Card from American Express would be a good fit, as it offers 6% cash back at U.S. supermarkets (for first $6,000 per year, after that 1X) and on U.S. streaming services, 3% at U.S. gas stations and on eligible transit, and 1% on other purchases.

What if your credit card stops being a good fit for you?

For better or worse, credit card products change all the time. Annual fees go up, benefits are eliminated or reduced, and points are devalued. If this happens, you may decide that what was once the best rewards credit card in your wallet is no longer right for you. Whether you’re paying a high annual fee or nothing at all, you should always be re-evaluating your credit card usage and spending. Find ways to optimize the rewards you earn and maximize the benefits offered, while reducing your expenses along the way.

Sometimes, a card stops being right for you because you change. Maybe you traveled weekly for work but have changed jobs or retired, and you no longer need a product with travel rewards. Or maybe a student card is great while you’re in school or you picked out a great credit card for studying abroad, but now your financial habits have shifted.

Once a year or so, sit down to look at the annual fees you’re paying, the benefits you’re receiving, and how you’re spending money. If you need to downgrade a credit card to save on an annual fee or close an account altogether, give your credit card issuer a call and do it.

Bottom line on high annual fee credit cards

Annual fees aren’t inherently bad. Even high annual fee credit cards can be an incredible value, as long as they are used properly (and thoroughly). But finding the right card for you is a very personal process — don’t take somebody else’s word on a card’s value.

Be sure to look at not only your budget and spending habits, but also your future plans. Then, pick the credit card — or credit cards — that can help you along the way.

Best Luxury Travel Benefits

Intro Offer

Earn 100,000 Membership Rewards points after spending $6,000 in the first 6 months

Annual Fee

$695

Rewards Rate

5X points per dollar spent on eligible airfare (on up to $500,000 per calendar year, after that 1X) and eligible hotel purchases, and 1X points per dollar on all other eligible purchases

Benefits and Drawbacks

Benefits

  • Earn 100,000 Membership Rewards points after spending $6,000 in the first 6 months
  • Select your metal card design: classic Platinum Card, Platinum x Kehinde Wiley, or Platinum x Julie Mehretu
  • 5X points on flights booked directly with airlines or on Amextravel.com (on up to $500,000 per calendar year, after that 1X) and prepaid hotels booked on Amextravel.com
  • $200 hotel credit (minimum two-night stay required), $240 digital entertainment credit, $200 in Uber Cash, $300 Equinox credit, $200 airline fee credit
  • Access to Centurion and Priority Pass airport lounges
  • Select benefits require enrollment.
  • $695 annual fee. Terms apply.

Drawbacks

  • High annual fee
Card Details
  • Earn 100,000 Membership Rewards points after spending $6,000 in the first 6 months
  • 5X points per dollar spent on eligible airfare (on up to $500,000 per calendar year, after that 1X) and eligible hotel purchases, and 1X points per dollar on all other eligible purchases
  • Terms apply

Author Details

Stephanie Colestock Stephanie Colestock is a credit card expert, travel rewards aficionado, and writer who enjoys teaching people how to be financially independent and confident about their money choices. If it has to do with credit, credit cards, or traveling the world on points, you'll find Stephanie writing about it. She also enjoys teaching people how to reach financial independence, regardless of obstacles in their path (such as the crippling student loan debt she once held). Stephanie graduated from Baylor University, and is currently working toward her CFP certification. Her work can be seen on sites such as Forbes, Dough Roller, and Johnny Jet, among many others.