How to Determine If a High-Annual-Fee Card Is Worth It

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Credit cards with high annual fees are becoming more common nowadays. It seems like every issuer — from big bank rewards programs to hotel loyalty programs — has introduced a premium credit card with an annual fee of $450 and up. These cards come loaded with perks like travel credits, Global Entry or TSA Precheck application credits, elite status benefits and more.

At first sight, the value of these benefits seems to exceed the annual fee. But are you actually getting your money’s worth from these high-annual-fee credit cards? Here are some questions to ask yourself.

Are you using the elite benefits?

Several high-annual-fee credit cards come with complimentary elite status, like the Hilton Honors American Express Aspire Card, which grants instant top-tier Hilton Diamond status. The Marriott Bonvoy Brilliant™ American Express® Card offers Gold elite status and the IHG® Rewards Club Premier Credit Card comes with Platinum elite status.

Earning mid- and top-tier status just from having a credit card is definitely faster than earning it more traditionally, especially considering a program like Hilton requires 60 nights to earn top-tier status.

Hotel elite members get incredible perks like bonus points on paid stays, complimentary breakfast, room upgrades and more. It’s easy to say a high-annual fee credit card is worth it because of these elite perks, but are you actually using them? After all, there’s no sense in having top-tier Hilton Diamond status if you frequently find yourself staying at Hyatts or Airbnbs.

More importantly, are you choosing more expensive hotels because the affiliated chain offers you status through a credit card? In this situation, it’s important not to see your status as a “free” card benefit, but something you’re actually paying for through the annual fee. So it’s equally important to make sure you’re getting a return on your money and that your loyalty to that chain due to the status you’re been granted isn’t costing you extra.

Are you taking advantage of annual travel credits?

High-annual-fee credit cards typically include at least one type of travel credit. For example, the Hilton Honors American Express Aspire Card offers a whopping three different types of travel credits (terms apply):

If you want to get your money’s worth, it’s important to make use of these credits every year. Otherwise, you’re paying $450 for a card you’re not maximizing to its full potential.

Are these credits saving you money?

On paper, all of the aforementioned travel credits can far outweigh the annual fees on these cards. You might use the $300 Marriott property credit and think, “Well that knocks $300 off my $450 annual fee!” But it’s important to remember that those benefits are only offsetting the annual fee if you were going to spend that money anyway.

If you’re running up a $400 hotel tab specifically to take advantage of the Marriott property credit, you’re not really coming out ahead. Or perhaps you’re just checking in bags and taking Uber to use up the $200 airline and Uber fee credits on The Platinum Card® from American Express. Terms apply.

Think about expenses you were going to pay for out of pocket anyway and whether your high annual fee credit card helps you cover them. If these credits are just encouraging you to spend money on things you wouldn’t otherwise spend, then you’re not getting your money’s worth from the card’s high annual fee.

Are you earning enough points?

The concept of earning points can get lost when you’re dealing with high-annual-fee credit cards because the perks of the card often outweigh the value of the points you’ll earn in a given year. But earning points is still just as important as the flashy card perks.

After all, if you’re not earning enough points for travel, then those statement credits, elite status upgrades and trusted traveler programs aren’t going to be put to use as often. If you’re not earning enough points every year to offset the cost of travel through an airline ticket, hotel night, or anything in between, you may not be getting your money’s worth from a high-annual-fee credit card.

The bottom line

High-annual-fee credit cards can significantly improve your travel experience, but it’s important to keep in mind whether the perks you’re using are actually offsetting the annual fee. A crucial part of determining this is to be honest with yourself about whether the various statement credits and elite status perks are things you would normally pay for. If the answer is “yes,” then you’re set. If it’s a “no” then you may want to consider getting a credit card with a lower annual fee that better meets your budget and travel habits.

To view rates and fees of the Marriott Bonvoy Brilliant™ American Express® Card, see this page.

All information about the Hilton Honors American Express Aspire Card has been collected independently by NerdWallet. The Hilton Honors American Express Aspire Card is no longer available through NerdWallet.

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