Is your annual fee card actually paying for itself?

CardWise Compass / A clearer path to free travel.

Hi {{first name | friend}}!

It’s been so hot in the UK! We actually stayed at a hotel here in London on Weds night just to have A/C. Our stay was totally free, thanks to the sign-up bonus from this card! :)

Last issue, we talked about a two-card strategy: how pairing the Sapphire Preferred with a Freedom Unlimited earns 38% more points from the same spending. This week: annual fees, and how to tell whether a card is working for you or against you.

Estimated read time: 4 minutes

Today's Issue at a Glance:

The Chase Sapphire Preferred is still offering 100K Ultimate Rewards points after spending $5K in the first 3 months, its highest bonus ever. The $95 annual fee can instantly be offset with a $100 annual hotel credit. The card earns 3x on Airbnb, dining, and online groceries, 2x on travel, and 1x on everything else. With 100K Chase points, you can easily fund a business class flight (or two!) to Europe, just as an example.

Also, if you have a small business / side hustle, the Chase Ink Business cards have no annual fee and also have the highest sign-up bonuses ever (100K points!) right now.

Some links I share are referral links, which are a free way to support my work. But I'll always prioritize you getting the best offer, whether or not I benefit.

If you remember one point from this week's newsletter, let it be this simple idea:

The goal of any card with an annual fee is always that you get more out of the annual benefits than the cost of the fee each year. This makes it a “keeper card.”

The math is what matters. Every card with an annual fee comes with credits, perks, or earning multipliers designed to offset it. The question is, “are you coming out ahead?”

The Chase Sapphire Preferred is a good example at the starter level: a $95 annual fee, a $100 hotel credit that covers it, and a sign-up bonus worth $1,250+ in travel value in year one. Note that the sign-up bonus is only offered in the first year, not every year. Higher-tier cards work the same way at a larger scale — more credits, more perks, higher fee.

Here's my own card as a case study.

I carry the Amex Platinum and have gotten serious value from it over the years. (Full transparency: I'm considering downgrading it to make room for other premium cards in my lineup; not a formal recommendation, as everyone’s situation is different!)

The annual fee is $895, but it comes with lots of annual credits. In some ways, you can think of these cards like glorified coupon books: you pay upfront and the card slowly pays for itself with specific credits throughout the year.

Here's the list of (only some of) the credits, from most to least valuable on paper:

On paper, that's almost $2,500 in potential annual credit value against an $895 annual fee!

Here's a real screenshot from my AmEx Platinum statement of the nearly $700 I have gotten in credits just from the past month:

As you can see, you can get great value in these premium cards, so don’t let annual fees automatically scare you away. The trick is to make sure your lifestyle already overlaps with these credits. Don’t let the “credit card perk” tail wag the dog.

This week: look at whatever annual fee card you carry and ask whether you're actually using the benefits. You can also check out my new calculator for the AmEx Platinum, as an example, to see if you can get value from it. Plug in your value for the credits you’d use and it'll show you whether the card is covering its own cost, year-over-year.

If these tips or the calculator tools are helpful, would you forward it to a friend or business owner who travels? It would mean so much. Please also share any feedback so I can keep improving the newsletter for you!

Next issue, we'll cover mistake #6: letting interest erase your points, and why carrying a balance can undo everything we've talked about so far.

Blessings, and I hope to hear from you soon!
Ross
CardWiseTravel.com