topic Re: How much Spending warrants an Annual Fee Card? in Credit Cards

How much Spending warrants an Annual Fee Card?

Anonymous — Sat, 02 Jul 2016 18:40:04 GMT

Going off the other thread asking how much people pay in AF's, how much in total spending do you think is recommended/required to have a card that has an AF?

Take my situation for example. In total, I spend approximately $13K a year. I have been kicking around the idea of getting an Amex PRG or Platinum card. But do I even spend enough to make up for the Annual Fees?

What say you MyFico? How much do you need to spend a year to truly make up for the AF and still come out ahead?

Re: How much Spending warrants an Annual Fee Card?

Open123 — Sat, 02 Jul 2016 18:47:28 GMT

In my view, at $13K annual spend, you shouldn't focus on rewards/dollar spent, but rather on bonus and benefits.

For instance, $13K is enough for about 5 large sign-up bonuses.

Or, an does an Amex Plat/Prestige's benefits exceed the cost? $400/$500 in airfare, 50K/100K MR/TY Points, global entry and louge access worth the $450 fee? If yes, then get the card. If no, then pass.

In either case, all things equal, with $13K annual spend, focus on sign-up bonuses.

Re: How much Spending warrants an Annual Fee Card?

Anonymous — Sat, 02 Jul 2016 19:24:23 GMT

All things being equal I just dont believe in having cards that have an annual fee because honestly there are too many great cards with no AF. Although I do know someone who pays an annual fee on their travel rewards cc because she says she gets more out of it in rewards than that small 49 af that she pays. Personally I dont want to pay it. My spend is similar to yours though so maybe people who use cc's for business or on a larger scale it would make sense.

Re: How much Spending warrants an Annual Fee Card?

Anonymous — Sat, 02 Jul 2016 19:45:59 GMT

Also depends on what you spend your money on. Amex Blue Cash Preferred gets 6% cash back on groceries, up to $6k spent. So if you spend $6k on groceries, you'd get $360 back, which is well over the $95 AF.

Re: How much Spending warrants an Annual Fee Card?

Anonymous — Sat, 02 Jul 2016 19:46:21 GMT

I probably put close to $40k to 50k on myour cards so I would say yes it's worth it. In your case I would probably stick to Freedom or QS.

Re: How much Spending warrants an Annual Fee Card?

kdm31091 — Sat, 02 Jul 2016 20:03:34 GMT

Your spend is fairly low and generally speaking that kind of spend is suited better to no AF cash back type of cards.

Re: How much Spending warrants an Annual Fee Card?

Anonymous — Sat, 02 Jul 2016 20:14:39 GMT

I don't believe in telling people what to do with their money. I agree with the poster who said look at the benefits and decide what works for you. When I first got on this site, I read a post from somebody who app'd for a card, and then closed it because when they got it they thought it was ugly. There are plenty of cards to choose from. I personally wouldn't have a "hotel" card if I didn't stay in a hotel but there are certain people who want those things and who are we to say "you can't justify an AF card because you don't spend enough." Only you know what works for you.

Re: How much Spending warrants an Annual Fee Card?

UncleB — Sat, 02 Jul 2016 20:36:19 GMT

@Anonymous wrote:
Going off the other thread asking how much people pay in AF's, how much in total spending do you think is recommended/required to have a card that has an AF?

Take my situation for example. In total, I spend approximately $13K a year. I have been kicking around the idea of getting an Amex PRG or Platinum card. But do I even spend enough to make up for the Annual Fees?

What say you MyFico? How much do you need to spend a year to truly make up for the AF and still come out ahead?

This is a really open-ended question... there are many more variables than simply your total yearly spend. My answer to your question would depend greatly on your own personal goals, spending habits, and even preferences.

To give you a 'thumbs up' or 'thumbs down' now would be like pulling an answer out of a hat, and wouldn't be very meaningful.

Re: How much Spending warrants an Annual Fee Card?

Anonymous — Sat, 02 Jul 2016 21:43:49 GMT

@kdm31091 wrote:
Your spend is fairly low and generally speaking that kind of spend is suited better to no AF cash back type of cards.

Re: How much Spending warrants an Annual Fee Card?

Anonymous — Sat, 02 Jul 2016 21:49:37 GMT

Good discussion. I know the question is open ended. It just gets people to post their opinions on the matter

Re: How much Spending warrants an Annual Fee Card?

Anonymous — Sat, 02 Jul 2016 21:53:03 GMT

@Anonymous wrote:
All things being equal I just dont believe in having cards that have an annual fee because honestly there are too many great cards with no AF. Although I do know someone who pays an annual fee on their travel rewards cc because she says she gets more out of it in rewards than that small 49 af that she pays. Personally I dont want to pay it. My spend is similar to yours though so maybe people who use cc's for business or on a larger scale it would make sense.

As others have said, in can make sense at much lower levels of spend ($6K on groceries means the BCP AF is well worth it over the BCE). I think some people focus too much on the annual fee as a gating factor, you should look at the whole value proposition of a card (rewards+sign up + perks - AF).

Now lowish spend means it is unlikely that you will build up worthwhile rewards in one of the "real" mile programs (such as UR/MR/SPG/TYP or airline/hotel specific programs). I think this is what Open means whne suggesting focussing on bonuses instead.

Re: How much Spending warrants an Annual Fee Card?

Anonymous — Sat, 02 Jul 2016 22:00:05 GMT

I've also read some posts on here that allude to members having their families give them cash to buy things for them and they use the rewards. In those cases I'm assuming that way they can "justify" the AF. Like I said before, I don't believe in telling people "you don't have enough of a income for a CSP (for example)". If I make 10,000 a year (which I don't, lol) and I get approved for PRG, that's my business. Might not make much sense but only I know what's best for me. I think you should focus on what you spend the most on and go from there.

Re: How much Spending warrants an Annual Fee Card?

Anonymous — Sat, 02 Jul 2016 22:31:24 GMT

it also depends on the card.

Beyond meeting the sign-up bonus spend, I do not expect to be using my Amex Platinum much, but I will certainly be keeping it indefinitely for the perks.

CSP, on the other hand, I will be using for dining and travel probably for the long run. Even if the points earned by itself are not enough to offset the AF, the additional points I will be able to transfer from Freedom Unlimited through CSP to travel partners make it a no-brainer.

As usual with credit situations, every situation is different which is why it's so important for each of us to learn as much as we can, because ultimately you are going to become the best resource for deciding whether or not something is "worth it" to you.

To some, no AF is "worth it" because they either won't utilize the perks, or would rather pay the direct cash-cost for them. Some feel that sub-100-dollar AFs are fine, but the $195 of Amex PRG, $450 of Amex Platinum and Citi Prestige etc are 'outlandish' (even though some of these people pay well over $500 per year spread across smaller AF cards).

So really it all boils down to you. What overall value warrants an AF for you? I'll be honest that CSP's value is not entirely monetary to me - it was my first dream card, I love how it looks and feels, and love the compliments people give it/me. That kind of value is not easily quantified, so again you really have to decide for yourself.

Re: How much Spending warrants an Annual Fee Card?

Anonymous — Sat, 02 Jul 2016 22:33:21 GMT

^ Good point regarding the CSP. My buddy got that card ONLY because of it being Metal.

Re: How much Spending warrants an Annual Fee Card?

RonM21 — Sun, 03 Jul 2016 00:44:30 GMT

For me, I can honestly say I don't know how much when it comes to myself. I'm sure it would be more a matter of how much I can get out of it. It would also depend on how much the fee is also. This is a good question and one I haven't put much thought to, as far as adding a value to it.

Re: How much Spending warrants an Annual Fee Card?

Closingracer99 — Sun, 03 Jul 2016 01:27:47 GMT

You have cards which you don't necessarily get for the points but more for the perks that come with it which is quite true with the Amex Plat, Citi Prestige and etc. The Citi AAdvantage plat card has a $95 AF which offers free luggage for you and up to 4 other people i believe? That alone makes the cards AF worth it if you fly on American Airlines a lot and carry luggage with you for more than 4 times or so. Same goes with a lot of the other Airline cards basic teirs. The Amex plat and Citi Prestige offer perks thta might be worth it alone which makes up the $450 AF on those cards.

Re: How much Spending warrants an Annual Fee Card?

Closingracer99 — Sun, 03 Jul 2016 01:29:38 GMT

Also some people might feel it's worth spending $450 a year to just be able to carry the Amex plat in their pockets and show it out and if they think it's worth the AF than its not my place to tell them they are wrong or anything....

Re: How much Spending warrants an Annual Fee Card?

kdm31091 — Sun, 03 Jul 2016 01:42:20 GMT

@Closingracer99 wrote:
Also some people might feel it's worth spending $450 a year to just be able to carry the Amex plat in their pockets and show it out and if they think it's worth the AF than its not my place to tell them they are wrong or anything....

Right. Ultimately, these are personal decisions, and no matter what, you aren't hurting anyone if you want to carry a Platinum just because it's a Platinum. Whatever floats one's boat.

That said, strictly on a math basis, if you are only spending 1k a month, you are going to have trouble building up meaningful amounts of miles in "real" travel programs as noted above. It's not impossible, but generally, the programs like that require higher spending (after you've gotten the sign up bonus) to make sense. Again, if someone wants to go for it anyway, that's fine -- but they may not get much mileage out of it, pun intended.

Re: How much Spending warrants an Annual Fee Card?

Anonymous — Sun, 03 Jul 2016 01:43:18 GMT

Is the prestige of the Platinum card worth the hefty $450 AF? I don't know. It's a constant battle I have in my head lol

Re: How much Spending warrants an Annual Fee Card?

Anonymous — Sun, 03 Jul 2016 01:47:34 GMT

@Anonymous wrote:
Is the prestige of the Platinum card worth the hefty $450 AF? I don't know. It's a constant battle I have in my head lol

About a month ago, i got an offer in the mail for the Platinum Card, thought about it for about 2 weeks, but decided the AF was too high. But decided yesterday to apply for the PRG instead, $195 was a little better to handle, especially with more MR points for things like dining and gas.