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New Contributor
nishant1
Posts: 108
Registered: ‎12-23-2012
0

Re: Annual Fees on cards!!

My pass/ fail criteria for whether to continue a card with Annual fee after sign up promotional year is over is very simple.

 

The incremental rewards  from Annual fee credit card should atleast be equal to 133% annual fee. If  I get $80 incremental rewards from a credit card for $75 AF, I would not continue it for a mere $5 per year benefit.

 

For example, Amex BCP gives additional 3% compared to BCE on groceries. I spend $500 on groceries so  I get additional $15 per month over BCE out of which I pay $6.25 for AF. Still a net additional reward of over $100 per year. I will continue with BCP then.

Valued Contributor
bs6054
Posts: 1,673
Registered: ‎11-11-2012
0

Re: Annual Fees on cards!!


nishant1 wrote:

My pass/ fail criteria for whether to continue a card with Annual fee after sign up promotional year is over is very simple.

 

The incremental rewards  from Annual fee credit card should atleast be equal to 133% annual fee. If  I get $80 incremental rewards from a credit card for $75 AF, I would not continue it for a mere $5 per year benefit.

 

For example, Amex BCP gives additional 3% compared to BCE on groceries. I spend $500 on groceries so  I get additional $15 per month over BCE out of which I pay $6.25 for AF. Still a net additional reward of over $100 per year. I will continue with BCP then.


Interesting!  How did you arrive at that?

 

I can see such a rule about APPLYING for new cards, where there is a time factor, plus any concerns about HPs impacting future credit.  A renewal though usually takes no effort, less than cancelling the card, and certainly has the same or less impact on score.   So I guess my rule would be two parts:

 

1) Are benefits > AF?

2) Is this the best use of the money that makes up the AF

 

1.33 seems a high factor to me!

Contributor
BearOSO
Posts: 96
Registered: ‎10-03-2012
0

Re: Annual Fees on cards!!

I do not think to hard on AF; too stingy, this is how I justify AF.

 

I spend money on a lot of stupid things on a weekly or monthly basis therefore AF is justified. 


Starting Score: 656 12/2012
Current Score: FICO (USAA pulled) EXP:678 | myFICO EQ:676 | myFICO TU:685 | App free since 2/1/2013

Valued Contributor
bs6054
Posts: 1,673
Registered: ‎11-11-2012
0

Re: Annual Fees on cards!!


BearOSO wrote:

I do not think to hard on AF; too stingy, this is how I justify AF.

 

I spend money on a lot of stupid things on a weekly or monthly basis therefore AF is justified. 


Great!

 

Dear BearOSO,

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Thanks

Senior Contributor
Open123
Posts: 4,089
Registered: ‎02-23-2011
0

Re: Annual Fees on cards!!


bs6054 wrote:
 For an additional fee of just $50, we can expedite this!

 

For me, this is a deal breaker.

 

Amex overnight cards to me free or charge!

Valued Contributor
bs6054
Posts: 1,673
Registered: ‎11-11-2012
0

Re: Annual Fees on cards!!


Open123 wrote:

bs6054 wrote:
 For an additional fee of just $50, we can expedite this!

 

For me, this is a deal breaker.

 

Amex overnight cards to me free or charge!


Well, I wish we could, but the expenses involved in rushing "not sending a card" are much greater than simply overnighting a card


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