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I love: Fantastic travel credit card benefits that save me a load of money, give me access to fancy travel extras (like airport lounges and priority boarding), and cover me with free travel insurance.
I don’t love: Travel credit card annual fees.
I pay about $1,300 in credit card annual fees each year. That sounds RIDICULOUS when I say it out loud. But I do the math to estimate whether my credit card benefits are worth the money, and my answer is yes.
However, I’ve been guilty of paying annual fees needlessly by failing to weed out redundant card benefits. I’ll show you what I mean! And you can sign-up for our newsletter for more credit card advice and tricks.
Beware of Redundant Travel Credit Card Perks
Our golden rule at MMS is “DO THE MATH.” Credit card annual fees might sound scary, but if the card benefits save you more than the cost of the annual fee, what’s the problem?
For example, if you open the Chase Sapphire Preferred Card, you get a bunch of cool benefits, like:
- Trip delay insurance
- Rental car insurance
- Baggage delay insurance
- No foreign transaction fees
These perks TOTALLY make the card a keeper forever. They’ve saved me lots and lots of money throughout the years. The trip delay benefit just reimbursed me ~$270 for a recent flight delay.
But guess what? The United℠ Explorer Card has these same travel benefits.
Both of these cards have a $95 annual fee (waived the first year). So if I’ve opened both cards, I need to make a decision. Is it worth keeping BOTH cards?
Each card has other unique benefits, but when you’re deciding whether to pay the annual fee, DON’T ACCOUNT FOR THE BENEFITS THESE CARDS HAVE IN COMMON. If each card’s unique benefits are valuable enough to warrant the $95 annual fees, you should keep them both.
Example: The United Explorer Card gives you:
- A free checked bag for you and a travel buddy on United Airlines flights when you pay for the flight with your card (potential $120 value per round-trip flight)
- Priority boarding
- 2 United Club lounge one-time passes annually
- Access to extra award seats on United Airlines
Will you save more than the $95 annual fee with those benefits alone? If so, the card is a no-brainer.
- Earns the most valuable (and flexible) points in the miles & points world
- Makes the rewards you earn with other no-annual fee Chase cards MUCH more valuable
- Earns double points in some of the most common categories
Will you save more than the $95 annual fee with those benefits? Keep the card.
But if you answer NO to either of those, it’s not worth paying the annual fee! Cancel or downgrade one of them to a no annual fee card.
This Is Especially True for Premium Travel Credit Cards With Much Higher Annual Fees
Premium travel cards have all KINDS of fantastic perks. Read through their list of benefits and it’s not difficult to realize how quickly you’ll negate an annual fee.
Example: The Chase Sapphire Reserve charges a $550 annual fee. The card comes with benefits like:
- $300 credit for travel purchases each account anniversary year
- Up to $100 statement credit for Global Entry or TSA PreCheck
- Priority Pass Select airport lounge access (HUNDREDS of dollars in value)
- Amazing top-notch travel insurance (the best in the business)
Add-in a fat welcome bonus and generous earning rates, and this card is at least worth a test-drive for a year or two.
But hark! You now want to open the super valuable U.S. Bank Altitude™ Reserve Visa Infinite® Card. It’s got a $400 annual fee, but comes with perks like:
- Annual $325 travel credit
- Priority Pass airport lounge membership (REDUNDANT)
- Up to $100 statement credit for Global Entry or TSA PreCheck fee (REDUNDANT, though you can use the credit to pay for someone else’s fee)
- Amazing top-notch travel insurance (REDUNDANT)
As you open more travel credit cards, some of your other cards may drop in value. That’s because you’re almost guaranteed to have overlapping benefits.
When you’re doing the math to decide if a card is worth the annual fee, don’t just run down the card benefits. Examine ALL of your cards, and decide if that one specific card has benefits unique enough to justify the annual fee. Otherwise, you’re needlessly paying money to the banks!
Let me know if you’ve had issues like this in the past. And subscribe to our newsletter for more credit card strategies and travel tips: