Are premium credit cards worth it?
October 30, 2017
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Would you ever consider paying a $450 annual fee for a credit card? Perhaps you should, as premium credit cards can offer exceptional value, even when compared to their soaring annual fees. In fact, the market for premium credit cards is extremely hot, with many of the major credit card issuers scrambling to introduce new products, and upgrade their old ones to remain competitive.
Let’s take a look at some of the premium credit cards on the market, and see if they really are worth their annual fees.
Chase Sapphire Reserve.
This card offers new applicants 50,000 Ultimate Rewards points after spending $4,000 within three months of account opening. It also includes a $300 annual travel credit towards any travel purchases. You earn 3x points on all travel and dining charges, and one point per dollar spent elsewhere. Points can be redeemed for 1.5 cents each towards travel reservations made through Chase, or transferred to points and miles with airline and hotel partners. You also get a Priority Pass Select membership that’s good for unlimited airport lounge access for you and all of your guests. There’s a $450 annual fee for this card.
Is it worth it? When you factor the $300 annual travel credit, the net cost of this card is just $150 per year. For most people, this will be worth it for the 3x points on travel and dining, the Priority Pass Select membership, and the additional value when redeeming points towards travel reservations.
The Platinum Card® from American Express.
With this premium rewards card, new applicants earn 60,000 Membership Rewards points after spending $5,000 in new purchases in the first three months of their account. Benefits include a $200 annual air travel fee credit, $200 of credit each year towards Uber rides, and a $100 credit towards the application fee for Global Entry or TSA Precheck. Other perks include cardholder access to the Delta SkyClubs, Priority Pass Select membership, and access to the American Express Centurion airport lounges.
You earn 5x points for flights and hotels booked with American Express travel, and one point per dollar spent elsewhere. Points are worth about one cent each towards gift cards or travel reservations, but potentially more when transferred to airline miles with. There’s a $550 annual fee for this card.
Is it worth it? If you can utilize both the $200 annual air travel fee credit and $200 of credit each year towards Uber rides, then the net cost of this card comes down to $150. For that amount, you get access to three different lounge programs and 5x rewards on air and hotel reservations booked through Amex, which will be worth it for frequent travelers.
Delta SkyMiles Reserve card from American Express.
This top-of-the-line Delta card offers new customers 10,000 Medallion Qualifying Miles (MQMs) and 40,000 bonus miles after spending $3,000 on new purchases within three months of account opening. And each year, you can earn another 15,000 MQMs and 15,000 bonus miles after you spend $30,000 on purchases, and an additional 15,000 MQMs and an additional 15,000 bonus miles after you reach $60,000 of purchases in a calendar year. Other perks include a SkyClub membership, an annual companion certificate, and upgrade priority over other travelers in the same level in the Medallion program. There’s a $450 annual fee for this card.
Is it worth it? The opportunity to earn up to 30,000 MQMs each year can mean the chance to reach the next level of Medallion status. When you combine that with upgrade priority within your status level, this card can be your ticket to numerous first class upgrades throughout the year. The Delta SkyClub membership alone costs more than $450 per year, and you can receive that much value from the companion certificate alone.
Mastercard Black Card.
This card offers 1.5% value from your purchases when redeemed for cash back, and double value when redeemed for airfare. Other benefits include a $100 annual airline credit toward qualifying airline purchases and a $100 Global Entry application fee credit. You also get a subscription to their Luxury Magazine and luxury gifts sent to you throughout the year. There’s a $495 annual fee for this card.
Is it worth it? Just based on the rewards alone, this card doesn’t appear to be worth the $495 annual fee. But this card is not about rewards, it’s about image. It includes a stainless steel and carbon card, and customers expect to be surprised by luxury gifts being sent to them throughout the year. If you value these kind of benefits over more tangible rewards, then this card can be worth it to you.