Are High Annual Fee Credit Cards Worth It?


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There are credit cards out there at all kinds of price points — there are some fantastic no annual fee cards, there are some rewarding mid-range cards (with annual fees of under $100), and then there are premium cards (with annual fees of $300+).

For many consumers, premium credit cards can be the hardest to justify, since many people just don’t think it’s worth spending hundreds of dollars per year on a single credit card. That’s fair enough, but I also think it’s worth discussing how we’ve seen a fundamental shift in the value of premium credit cards.

Going back a decade, premium credit cards had a pretty niche value proposition, and many people got these cards primarily for the prestige. However, the premium credit card space has become much more competitive in recent years, and this has caused the value proposition on these cards to improve considerably.

While premium credit cards aren’t for everyone, nowadays I’d say they’re pretty easy to justify for many people who like to travel. Yes, you’ll pay a high fee upfront, but the perks typically more than justify that. In this post I wanted to look at that in more detail for those who might be skeptics.

Why premium credit cards are worth having

Let’s take a closer look at some of the most popular premium cards on the market. We’ll take a look at the annual fee, and then how I go about justifying the ongoing cost of holding onto these cards. I won’t even discuss the welcome offers, which can get you a ton of value upfront, and are all the more reason to consider these cards.

Capital One Venture X Credit Card

The Capital One Venture X Rewards Credit Card (review) (Rates & Fees) has a $395 annual fee, and it’s also the premium card with the easiest to justify annual fee, in my opinion.

How do I justify the annual fee? The card offers a $300 annual travel credit (good as cash through the Capital One Travel portal) plus 10,000 anniversary bonus miles (I value Capital One miles at 1.7 cents each, so that’s $170 worth of value right there). By my math, you’re getting $470 worth of value on a $395 annual fee card with those two benefits alone.

But that’s only the tip of the iceberg:

As you can see, it’s really easy to make the math on the Capital One Venture X work, even if you’re not someone who would usually consider a premium credit card.

If you’re looking for a business card instead, the Capital One Venture X Business (review) (Rates & Fees) has a lot of similarities, and can absolutely be worth it.

Access Priority Pass lounges with the Capital One Venture X

Chase Sapphire Reserve Card

The Chase Sapphire Reserve® Card (review) has a $550 annual fee, and is probably the most popular premium card with younger generations.

On the most basic level, the card offers a $300 annual travel credit, which is automatically applied to any travel purchase. That should be good as cash to anyone who has this card, meaning this card should really only be costing you $250 per year.

What do you get for that $250 investment?

Independently I wouldn’t say the Chase Sapphire Reserve is quite as easy to justify as the Capital One Venture X, but the major benefit of this card is all the other cards you can maximize in the Ultimate Rewards ecosystem by having the Sapphire Reserve.

Use your annual credit toward virtually any travel purchase

Amex Platinum Card

The Platinum Card® from American Express (review) has a $695 annual fee (Rates & Fees), so it’s the highest annual fee personal card of the bunch. Arguably the card set the standard for premium cards, though nowadays its value proposition can be pretty polarizing.

The card’s annual fee can potentially be more than justified by the incredible number of credits offered, including the following (Enrollment is required for select benefits):

  • Up to $300 in statement credits each year on a digital or club membership at Equinox
  • Up to $300 in SoulCycle credits
  • Up to $240 in annual digital entertainment credits
  • Up to $200 in annual hotel credits (minimum two-night stay required for Amex Hotel Collection, and one night stay for Amex Fine Hotels & Resorts)
  • Up to $200 in annual airline fee credits
  • Up to $200 in annual Uber credits
  • Up to $189 in annual CLEAR Plus credits
  • Up to $155 in annual Walmart+ credits
  • Up to $100 in annual Saks credits

As you can see, that’s potentially $1,800+ worth of annual credits. What’s the catch? These credits aren’t nearly as straightforward as the ones on Capital One and Chase cards. These credits are largely broken down by month, and come with lots of restrictions on what they can be redeemed for.

Some cardmembers will roughly breakeven on the annual fee with how they actually use these credits. Others may come out way ahead. Before you get the Amex Platinum Card, definitely do research on the terms associated with the credits, and how much value you’d get from them.

This is only one aspect of the card, though. The Amex Platinum Card also offers the most comprehensive airport lounge access of any card. You get a Priority Pass membership, access to Delta Sky Clubs (when flying Delta same day), Amex Centurion Lounge access, and much more.

If you’re looking for a business card instead, The Business Platinum Card® from American Express (review) is worth considering, though note that there are some differences between the two versions of the card.

Access Delta Sky Clubs with the Amex Platinum

Citi AAdvantage Executive Mastercard

While the above are all bank branded cards, I thought it would be interesting to look at a premium airline card as well. The Citi® / AAdvantage® Executive World Elite Mastercard® (review) has a $595 annual fee. What do you get for that?

Well, the card offers an American Admirals Club membership for the primary cardmember, making this the best card for Admirals Club access. You’re already coming out ahead there compared to the cost of outright buying a membership.

What makes this card even better is that you can pay a total of $175 to add up to three authorized users to the card, meaning you’re potentially paying under $60 per authorized user. Those authorized users then also get Admirals Club access when traveling on American or a partner same day, and they can even bring guests.

The card offers several other great perks, like up to 20,000 bonus Loyalty Points per year, up to $120 in annual credits with Avis and Budget, up to $120 back annually with Grubhub, and more. If you fly American frequently, then I think this card is absolutely worth it.

Access Admirals Clubs with the Citi AAdvantage Executive

Hilton Aspire Card

In addition to a premium airline credit card, let’s also take a look at a premium hotel credit card. The Hilton Honors American Express Aspire Card (review) has a $550 annual fee. While that’s no doubt steep, the card should be very easy to justify for anyone who stays at Hiltons with any frequency.

What are you getting for that annual fee?

  • Hilton Honors Diamond status for as long as you have the card, which is Hilton’s top-tier status
  • An anniversary free night award annually, which can be redeemed at a property costing up to 150,000 Hilton Honors points
  • Up to $400 in annual Hilton resort credits, in the form of a $200 Hilton resort credit every six months
  • Up to $200 in annual airline flight credits, in the form of a $50 airline credit every quarter
  • Up to $189 in annual CLEAR Plus credits

Personally I think the Hilton Honors Diamond status and anniversary free night award alone justify the annual fee. Then if you add in the Hilton resort credits and airline flight credits, you can potentially come out way ahead with this card.

The information and associated card details on this page for the Hilton Honors American Express Aspire Card has been collected independently by OMAAT and has not been reviewed or provided by the card issuer.

Receive an annual free night award with the Hilton Aspire

Bottom line

There are credit cards at just about all price points. While many people have no issue picking up a no annual fee or sub-$100 annual fee card, premium credit cards with high annual fees are a different story.

I’m not saying everyone should pick up a credit card with a $300+ annual fee, though I do think the cards are easier to justify than most would assume. That’s especially true with a card like the Capital One Venture X, which offers annual credits and perks that more than justify the annual fee.

Cards like the Chase Sapphire Reserve aren’t slam dunks in quite the same way, but make a lot of sense for those who want to earn travel rewards, value lounge access, and appreciate travel protection when things go wrong.

The Amex Platinum Card has the potential to be the most rewarding of the bunch, despite the high annual fee. However, maximizing it requires a lot more research and effort than with the other cards.

What’s your take on the value proposition of premium credit cards? Which do you find to be worthwhile?

The following links will direct you to the rates and fees for mentioned American Express Cards. These include: The Platinum Card® from American Express (Rates & Fees).

For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.

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