Credit Card Annual Fee:
Why it’s silly to allow the annual fee associated with a credit card keep you from applying. Don’t let emotion blind you from logic.
Currently, my wife and I “owe” $4,225 in credit card annual fees over the next twelve months. See the spreadsheet below for details:
You callin’ me crazy? I’ll have you know that American Express offers their Centurion credit card which carries a whopping $7,500 initiation fee and a $2,500 annual fee thereafter. You don’t see me with that card in my portfolio (yet) do you???
Knowledge: A credit card annual fee typically ranges from $0 to $550. At the time of this post, the American Express Platinum card carries a $550 annual fee. There are some ultra premium credit cards that have higher annual fees, all the way up to the aforementioned Centurion card, but for purposes of Traveling More for Less, we won’t discuss cards that don’t help us maximize opportunities to do just that.
My question to you: Have you ever considered applying for a new credit card and ultimately decided not to, in part because you didn’t want to pay the credit card annual fee? Be honest. Now, I know what you’re thinking… “I didn’t even get to considering the credit card annual fee because I was too scared that applying for a new credit card would lower my credit score!” If this is you, I recommend you stop reading right now, back up, and read my very frank and statistically valid post on how opening a new credit card does NOT lower your credit score.
Okay, now that you’re back with me: I want you to consider why I, a financially conservative individual with a financial blueprint that goes from Protect –> Save –> Grow, in that specific order, is EXCITED to have over $4,000 annually in credit card annual fees. Furthermore, why am I writing a blog post trying to convince you that it’s silly to balk at carrying a credit card in your wallet that has a $550 annual fee?
Let me tell you why: Simply put, if the spreadsheet above was yours and I glanced at it, I would smile. I would be smiling because I would know that along with your $4,125 in credit card annual fees over the next twelve months, you will have five + times that dollar amount in benefits that allow you to travel more for less.
Here’s an example: And I’ll start with the card that carries the highest fee (yes, I do carry this card, see above) – The American Express Platinum Card has a $550 credit card annual fee. So, let’s test my theory of ten times that amount in added value which would be $5,500 toward the vision of “traveling more for less.”
- + $1,600 | Sign-up bonus of 100,000 points (historical highest) = $1,600 on average. I can advise you on how to make the 100k points be worth more, over $2,000.
- + $400 | Annual airline fee credit of $200 per calendar year for incidental charges such as checked bags, airline gift cards, upgrades, etc etc. Ask me how to make sure you get this twice in the first year and how to best allocate the dollars based on your travel goals.
- + $200 | Uber credits allocated at $15/month and $35 in December. Note – these expire each month at end of month, so use them up. Ask me how to set this up.
- + $100 | Global entry or TSA Precheck application fee reimbursement
- + $??? | complimentary access to ALL OF THIS: the following airport lounges and all that come with them: Priority Pass Select, Centurion, Delta Sky Clubs, Airspace Lounges. SPG Gold status, Hilton Gold Status, and the following car rental companies: Avis, Hertz, National. Boingo (free airport WiFi) membership. A travel concierge service. A service called “Amex Offers” which offers great discounts at big name stores such as Walmart and Amazon. This is a start – do your own research on all the details with these, or ask me.
$2,300 + ??? – $550 credit card annual fee = SIGN ME UP! I was able to stretch this to be about $5,000 in “travel more for less” value in my first year. Not the ten times I wanted, but in any case, it’s certainly more valuable than the $550 credit card annual fee.
Don’t be silly: and automatically shut down emotionally when you see a credit card annual fee. Similarly, don’t shut down emotionally on the idea of applying for a new credit card (or many) because someone told you it will lower your credit score.
Educate yourself and read my blog post on why opening a new credit card does NOT lower your credit score. Or, alternatively, treat it like your taxes, and simply trust your CPA, or in this case, your CTA (Certified Travel Advisor), to know what’s best for you.
Now, I know I’m not a “Certified Travel Advisor” and I’m not comparing apples to apples with my analogy to a Certified Public Accountant, but I do lead by example and put it all out there for the world to see. Does your CPA show you there tax returns? What do you really know about their finances? I LIVE this lifestyle every day.
I am @BenTheTravelCoach and I’m an open book travel advisor and coach. I encourage you to consider hiring a Travel Advisor just as you might a CPA.
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Learn how in just six simple steps you can make your travel dreams come true: How To Travel More For Less