It Can Be Worth it to Pay An Annual Fee


One of the things we hear a lot is people’s reluctance to pay an annual fee on a credit card. Obviously, we’d love there to be no annual fees or at least to have them all waived the first year. Sadly, that is not usually the case. The key to this post is a reminder to not let annual fees keep you from getting credit cards. There are several reasons that it can be worth it to pay an annual fee.


Signup Bonus

It is always worth paying an annual fee for the signup bonus. Let’s say I get a signup bonus of 60,000 points for the Chase Sapphire Preferred Card. I can do multiple things with those points.  My sister just used 70,000 points to book a one-way business seat to Greece. She transferred Ultimate Rewards to United to book them. That seat would normally cost $5,586. She got it after signing up herself for that card and referring her husband for it.  I think that the $95 annual fee is worth that signup bonus, don’t you?

Maybe you just plan to use points for domestic travel, you could get at least 3-4 domestic roundtrip tickets for those points. In this example, if I wanted to take 3 family members from Denver -San Diego, we could go for about 63,000 points and under $50 in taxes and fees. I feel like that $95 annual fee is totally worth it here too! I would normally have had to pay over $1,000 for these tickets.


screenshot of United award price of ticket

Consider the Benefits of the Credit Cards

There are many times that paying that annual fee is totally worth the benefits you get from the card. I have kept my United Explorer card for years, even without the signup bonus. I pay $95 a year and this is what I get:

  • Free first checked baggage
  • Priority boarding
  • 2 United Club passes a year


I travel United a lot for a couple of reasons. One, I live near a United Airlines hub and so I get a lot of direct flights. Two, because I fly one airline, consistently, I have silver elite status on that airline and will have gold elite soon which means I get upgraded to Economy Plus on every flight. This is worth it to me.

If I had to pay for checked baggage every time I flew it would cost me hundreds of dollars a year. I like priority boarding so I can get settled in for a flight and the 2 club passes are worth $50 each. My annual fee of $95 is totally worth it for me.


United Explorer Credit Card

My benefits with this card are worth the annual fee!


Hotel Credit Cards

As we’ve said before we keep our hotel cards year after year. The benefits of a hotel card totally outweigh the approximately $100 annual fee we pay on them. Some of my benefits include:

  • Free annual night certificate – I always use for a stay that cost more than my annual fee
  • Enhanced wi-fi
  • Late check-in
  • Upgraded room, if available
  • Hotel status

Hotel room

I can use a 35K certificate at this Westin in San Diego!

High Annual Fees

I even find it worthwhile to keep credit cards with high annual fees. For instance, my American Express Gold Card has an annual fee of $250. With that card I get:

  • $10 dining credit good at select restaurants and – $120 yearly value
  • $10 credit for Uber rides or Uber Eats – $120 yearly value
  • 4x points on grocery stores and restaurants – I get a ton of points this way


My $250 annual fee with this card is totally made up by the benefits I get. Don’t be afraid of annual fees. Even high annual fees.


Bottom Line

Initially, an annual fee for a credit card sounds horrible. Don’t forget that most credit cards offer benefits to you for paying those annual fees. Those benefits make it worth paying a credit card annual fee. Do not write off a card because of an annual fee, even a high one. Do your homework and see which ones are worth paying even after the year you get the signup bonus. Honestly, it can be worth it to pay an annual fee and we do on several of our cards.



Beach and sand

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