topic How much do you pay in anuual fees? in General Credit Topics

How much do you pay in anuual fees?

Anonymous — Mon, 19 Mar 2018 13:54:51 GMT

How much do you pay in annual fees?

It appears a lot of posters have a lot of premium CC that have an AF. I know this question was asked a few years ago, but it no longer accepts new postings.

I pay nothing.

Re: How much do you pay in anuual fees?

Anonymous — Mon, 19 Mar 2018 15:02:21 GMT

Nothing. And I would never take any card with an annual fee. Had some for a while because limited credit, but now no way.

Re: How much do you pay in anuual fees?

LionLaw — Mon, 19 Mar 2018 15:20:19 GMT

I have two cards with annual fees:

1. Amex PRG - $195. Benefits: $100 annual airline fee credit (though I don't always use the full amount); MR Points (I put enough spending through this card to get one or two free flights a year).

2. CSP - $95. Benefits: Chase UR points (the bonus categories don't overlap with Amex, which is nice); lots of travel benefits (primary car rental insurance; trip delay/cancelation insurance; no forex fees; etc.).

The annual fees are really only worth it if you travel somewhat regularly, since a) travel and airfare are the most lucrative bonus point categories, b) most of the other benefits of these cards are travel-focused, and c) the rewards points you earn are most valuable when transferred to frequent flyer programs (or otherwise redeemed for travel). I've cashed in my MR points for a bunch of free flights and hotel nights over the years, so I have definitely gotten my money's worth.

Re: How much do you pay in anuual fees?

Anonymous — Mon, 19 Mar 2018 16:25:58 GMT

$95 + $450 for ThankYou Premier and CSR right now, would expect to be a lot more in the future when I get new cards.

Both of these offer some sort of ways to offset the fee, though. Only "actually" paying $150 this year.

Re: How much do you pay in anuual fees?

MakingProgress — Mon, 19 Mar 2018 16:55:16 GMT

Zero now. I did have a $39 AF on QS1 but I got it PC to a QS and no longer have the fee.

I use cash back cards which are less likely to have an AF than points cards. I doubt I will ever go for the premium cards as I don't travel much and thats where you usually get the most bank for your buck with AF cards.

Re: How much do you pay in anuual fees?

Anonymous — Mon, 19 Mar 2018 17:01:06 GMT

AMEX BCP - $95 - After the AF, I get abouyt $300/year on cash back.

AMEX Delta Platinum - $195 - Have it only for the annual companion certificate

CSP - $95

Hilton Honors Ascend - $75 - Only because i was upgraded 3/2018 with an offer...will be downgrading at the year mark

I've seen some users here with like 2 AMEX Platinu, CSR, AMEX Platinum Busines, Citi Prestrige etc...maybe lying about their signature...well over $2000 in AFs.

Re: How much do you pay in anuual fees?

Anonymous — Mon, 19 Mar 2018 19:10:33 GMT

Bear in mind that the right way to calculate the true cost of an annual fee is not to look at simply at how many points or cash back you get, since you can also get points and cash back with no annual fee cards.

I'll use the Amex Blue Cash Preferred as an example, though the same kind of analysis can be applied the two Chase Sapphire cards and many others.

The Amex BCP gives you 6% on groceries, 3% on gas, and 1% on everything else.

* Ignore the everything else category, since you can get 2% in this category with many no annual fee cards.

* Likewise ignore the 3% gas category, since several cards give you 3% on gas (my freedom currently gives me 5%).

* For the grocery category, the no annual fee version of the Blue Cash gives you 3%. Therefore you should ignore the first 3% on groceries -- only the remaining 3% should count.

Thus the math should be something like this: do I spend an average of $1000 per quarter on groceries? If so, the BCP is giving me $120 extra per year. The annual fee is $95. So I am netting $25 by having the Blue Cash Preferred over the ordinary Blue Cash.

Even still, if I have a Freedom or a Discover or both, I may have no annual fee solutions for getting 5% on groceries. Now I have to be spending very close to the $1500 max per quarter in order for the BCP to be worth it.

The same kind of analysis may show a person that one or more of his fee cards (Chase, Citi Prestige, whatever) either costs him more than a NAF alternative, or that the benefit is extremely small. That's a maybe. If a person has a large family and knows she'll be spending at least $1500 every quarter on groceries, then it is certainly the right choice to have an Amex BCP.

One hidden risk in AF cards is that they can lock you into a costly spending pattern. You pay for the Chase Sapphrise Reserved because you travel a lot -- which justifies in your mind the high AF. But if you were to go on fewer vacations, you'd save a ton more money than you get with the points that the CSP generates.

Re: How much do you pay in anuual fees?

LionLaw — Mon, 19 Mar 2018 19:50:38 GMT

@Anonymouswrote:
Bear in mind that the right way to calculate the true cost of an annual fee is not to look at simply at how many points or cash back you get, since you can also get points and cash back with no annual fee cards.

I'll use the Amex Blue Cash Preferred as an example, though the same kind of analysis can be applied the two Chase Sapphire cards and many others.

The Amex BCP gives you 6% on groceries, 3% on gas, and 1% on everything else.
     * Ignore the everything else category, since you can get 2% in this category with many no annual fee cards.
     * Likewise ignore the 3% gas category, since several cards give you 3% on gas (my freedom currently gives me 5%).
     * For the grocery category, the no annual fee version of the Blue Cash gives you 3%. Therefore you should ignore the first 3% on groceries -- only the remaining 3% should count.

Thus the math should be something like this: do I spend an average of $1000 per quarter on groceries? If so, the BCP is giving me $120 extra per year. The annual fee is $95. So I am netting $25 by having the Blue Cash Preferred over the ordinary Blue Cash.

Even still, if I have a Freedom or a Discover or both, I may have no annual fee solutions for getting 5% on groceries. Now I have to be spending very close to the $1500 max per quarter in order for the BCP to be worth it.

The same kind of analysis may show a person that one or more of his fee cards (Chase, Citi Prestige, whatever) either costs him more than a NAF alternative, or that the benefit is extremely small. That's a maybe. If a person has a large family and knows she'll be spending at least $1500 every quarter on groceries, then it is certainly the right choice to have an Amex BCP.

One hidden risk in AF cards is that they can lock you into a costly spending pattern. You pay for the Chase Sapphrise Reserved because you travel a lot -- which justifies in your mind the high AF. But if you were to go on fewer vacations, you'd save a ton more money than you get with the points that the CSP generates.

This is all very solid advice. There are so many competitive rewards cards out there now, many with $0 AF, that it is very hard to justify higher annual fees for bonus points/cash alone. The 3 major high AF cards (Amex Platinum, CSR, Citi Prestige) all offer benefits that can make their fees worthwhile to heavy travelers, and while all 3 offer very lucrative bonus point categories, those aren't enough on their own to justify the annual fees.

Re: How much do you pay in anuual fees?

OmarR — Tue, 20 Mar 2018 00:45:04 GMT

BCP is my only AF card, as I spend just over the required amount (normal, not manufactured) to beat out the BCE.

Also, keep in mind any SUB that a card may offer you.

BCP gave me $200, so that offsets the AF for 2 years. After that, I will re-visit the situation. By then, there will be new players & cards on the table to choose from.

Re: How much do you pay in anuual fees?

Anonymous — Tue, 20 Mar 2018 01:15:51 GMT

@OmarRwrote:
BCP is my only AF card, as I spend just over the required amount (normal, not manufactured) to beat out the BCE.

Also, keep in mind any SUB that a card may offer you.

BCP gave me $200, so that offsets the AF for 2 years. After that, I will re-visit the situation. By then, there will be new players & cards on the table to choose from.

I agree that the Sign Up Bonus can matter a lot when you are trying to decide whether to apply for the card at all. But once you have gotten the bonus (typically 90-120 days after you opened the card) then the SUB shouldn't factor into your decision about what to do with the card for the future. The bonus at that point is history. You already have it. The fact that you got the bonus in the past won't cause the annual fee in 2019 to be any more or less than it is.

As far as the BCP goes, are you buying over $1000 worth of groceries per quarter? If not, I'd rethink the appropriateness of the BCP. (And if you have a Freedom and/or Discover, you need to be buying closer to $1500, since that makes 3 or 6 months when you can get 5% of groceries with no fee.)

Re: How much do you pay in anuual fees?

OmarR — Tue, 20 Mar 2018 02:04:37 GMT

@Anonymous wrote:
@OmarRwrote:
BCP is my only AF card, as I spend just over the required amount (normal, not manufactured) to beat out the BCE.

Also, keep in mind any SUB that a card may offer you.

BCP gave me $200, so that offsets the AF for 2 years. After that, I will re-visit the situation. By then, there will be new players & cards on the table to choose from.
I agree that the Sign Up Bonus can matter a lot when you are trying to decide whether to apply for the card at all. But once you have gotten the bonus (typically 90-120 days after you opened the card) then the SUB shouldn't factor into your decision about what to do with the card for the future. The bonus at that point is history. You already have it. The fact that you got the bonus in the past won't cause the annual fee in 2019 to be any more or less than it is.

Yes, it will be more. Because they just paid it for me for 2 years. They arent giving me $200 again in 2019. Unless they waive the AF.

@CreditGuyInDixie wrote:
As far as the BCP goes, are you buying over $1000 worth of groceries per quarter? If not, I'd rethink the appropriateness of the BCP. (And if you have a Freedom and/or Discover, you need to be buying closer to $1500, since that makes 3 or 6 months when you can get 5% of groceries with no fee.)

I average about $720-$960 per quarter. After 2 years, that's when I re-evaluate going to BCE.

Re: How much do you pay in anuual fees?

Anonymous — Tue, 20 Mar 2018 03:24:11 GMT

$0 in AFs here.

I never travel, so I'll likely never see value in an AF card. The only time I've ever taken one on (CSP) it was for the SUB and I did a PC on the card before the AF hit to avoid having to pay it.

Re: How much do you pay in anuual fees?

trusty — Tue, 20 Mar 2018 03:46:49 GMT

@Anonymouswrote:

One hidden risk in AF cards is that they can lock you into a costly spending pattern. You pay for the Chase Sapphrise Reserved because you travel a lot -- which justifies in your mind the high AF. But if you were to go on fewer vacations, you'd save a ton more money than you get with the points that the CSP generates.

I think this is a major point, that often goes unconsidered. Oftentimes, I feel like I'm less shrewd with my spending... when, I figure I'm getting points back.

But, you will always save more money - that you don't spend in the first place. These rewards cards are quite adept at making us spend money that we wouldn't have spent without the card.

That said, vacationing is good for your overall health and well being. Unless, of course, you go on cruises... whereby, you can get really sick.

The other thing not mentioned, on the fee side; is that, there can be enormous insurance benefits, not to mention all of the high level personalized service, and many other tangible benefits... attached to being a part of such an exclusive club. So, many of these card memberships can be worth their weight in gold, regardless of any cash back. You'll only ever discover this immense value, if you don't have it when you need it.

I personally like the possibility of being treated with kit gloves, and reminded of various benefits that I had forgotten all about, on the spot... just for slapping down an exclusive card. It oftentimes only takes a single vacation to realize the depth and breadth of difference.

So, continue to use your free credit card, or your debit card - if you don't like being treated like your family secretly owns the whole dang resort.

Re: How much do you pay in anuual fees?

Anonymous — Tue, 20 Mar 2018 03:44:34 GMT

Hi Omar. I didn't realize that the Amex BCP bonus worked that way -- that the bonus consisted of them paying the fee for the next two years. My understanding was that they gave you $200, once you meet the minimum spending requirements.

Re: How much do you pay in anuual fees?

Anonymous — Tue, 20 Mar 2018 12:45:41 GMT

Completely agree. I did the calculations before I posted. For my spending an AF doesn't make sense.

Re: How much do you pay in anuual fees?

LionLaw — Tue, 20 Mar 2018 15:03:48 GMT

@trustywrote:
@Anonymouswrote:

One hidden risk in AF cards is that they can lock you into a costly spending pattern. You pay for the Chase Sapphrise Reserved because you travel a lot -- which justifies in your mind the high AF. But if you were to go on fewer vacations, you'd save a ton more money than you get with the points that the CSP generates.
I think this is a major point, that often goes unconsidered. Oftentimes, I feel like I'm less shrewd with my spending... when, I figure I'm getting points back.

But, you will always save more money - that you don't spend in the first place. These rewards cards are quite adept at making us spend money that we wouldn't have spent without the card.

That said, vacationing is good for your overall health and well being. Unless, of course, you go on cruises... whereby, you can get really sick.

The other thing not mentioned, on the fee side; is that, there can be enormous insurance benefits, not to mention all of the high level personalized service, and many other tangible benefits... attached to being a part of such an exclusive club. So, many of these card memberships can be worth their weight in gold, regardless of any cash back. You'll only ever discover this immense value, if you don't have it when you need it.

I personally like the possibility of being treated with kit gloves, and reminded of various benefits that I had forgotten all about, on the spot... just for slapping down an exclusive card. It oftentimes only takes a single vacation to realize the depth and breadth of difference.

So, continue to use your free credit card, or your debit card - if you don't like being treated like your family secretly owns the whole dang resort.

Lots of good points here. You're always better off saving your money and putting it into savings than spending it and getting a few percent back in rewards points.

That being said, there's a big psychological benefit in planning and anticipating an upcoming vacation; in some ways, the planning and anticipation can be more beneficial than the vacation itself. Saving up for a vacation, whether it's setting aside cash or earning rewards points, is a part of that process.

And yes, for frequent travelers, the high AF cards offer some great benefits. Getting automatic status with airlines and hotel chains can make a big difference. Some of them even give you VIP status with car rental companies, which is an underrated perk.

Re: How much do you pay in anuual fees?

iced — Tue, 20 Mar 2018 17:26:44 GMT

@Anonymouswrote:
@OmarRwrote:
BCP is my only AF card, as I spend just over the required amount (normal, not manufactured) to beat out the BCE.

Also, keep in mind any SUB that a card may offer you.

BCP gave me $200, so that offsets the AF for 2 years. After that, I will re-visit the situation. By then, there will be new players & cards on the table to choose from.
I agree that the Sign Up Bonus can matter a lot when you are trying to decide whether to apply for the card at all. But once you have gotten the bonus (typically 90-120 days after you opened the card) then the SUB shouldn't factor into your decision about what to do with the card for the future. The bonus at that point is history. You already have it. The fact that you got the bonus in the past won't cause the annual fee in 2019 to be any more or less than it is.

As far as the BCP goes, are you buying over $1000 worth of groceries per quarter? If not, I'd rethink the appropriateness of the BCP. (And if you have a Freedom and/or Discover, you need to be buying closer to $1500, since that makes 3 or 6 months when you can get 5% of groceries with no fee.)

I would go even further to say that the SUB should not be a determining factor in getting a card simply because it is a one-time thing that will quickly be diluted in terms of value compared to regular use of said card. It should be the recurring value that drives the decision. A 50,000 point or $500 SUB stops moving the needle much after a few years if spend on the card has generated 500,000 points or $5000 in cash back.

Where the SUB comes into play is when to get a card, not whether or not to get it at all. That is, one should have already decided they want the card and then try to get a maximum SUB rather than letting the SUB talk them into getting a card they would not have otherwise wanted.

If someone is a churner, then the SUB is the only thing that factors in since they are just basically doing pump-and-dump on cards for the SUB.

Re: How much do you pay in anuual fees?

iced — Tue, 20 Mar 2018 17:45:30 GMT

@trustywrote:
@Anonymouswrote:

One hidden risk in AF cards is that they can lock you into a costly spending pattern. You pay for the Chase Sapphrise Reserved because you travel a lot -- which justifies in your mind the high AF. But if you were to go on fewer vacations, you'd save a ton more money than you get with the points that the CSP generates.
I think this is a major point, that often goes unconsidered. Oftentimes, I feel like I'm less shrewd with my spending... when, I figure I'm getting points back.

But, you will always save more money - that you don't spend in the first place. These rewards cards are quite adept at making us spend money that we wouldn't have spent without the card.

That said, vacationing is good for your overall health and well being. Unless, of course, you go on cruises... whereby, you can get really sick.

This is true if someone is only taking vacations to generate spend on a CC, but nobody I know is going on more vacations simply because of the card rewards they can earn, and they aren't changing any spending patterns or being locked into new ones. If someone budgets $25,000/year for vacations, they're going to spend that money on vacations whether it's on a CSR or a basic CU card. They'll get much more than $450 in rewards back, even at cash-back redemption levels, with the CSR than they would the CU card this way.

As for spending in general, it's really about moderation. I am one of the most conservative savers I know and I'm always open to new ways to save, but if I'm already putting away $60,000/year into savings, do I really need to slash another $10,000 out of my annual travel budget so I can save even more? My friends and family would be telling me the opposite: take more vacations and quit being such a miser!

Re: How much do you pay in anuual fees?

OmarR — Tue, 20 Mar 2018 20:29:07 GMT

@Anonymous wrote:
Hi Omar. I didn't realize that the Amex BCP bonus worked that way -- that the bonus consisted of them paying the fee for the next two years. My understanding was that they gave you $200, once you meet the minimum spending requirements.

I am simply doing the math, same as you are.

@$200-($95 x 2years) = No annual fee for 2 years @ 6% groceries. Switching to a ROTATING card(s) that is LESS than 6% is just silly, unless I were to cap out ($6,000). Only than would I pursue other options.

iced
wrote:
Where the SUB comes into play is when to get a card, not whether or not to get it at all. That is, one should have already decided they want the card and then try to get a maximum SUB rather than letting the SUB talk them into getting a card they would not have otherwise wanted.

I completely agree with you.

I had a $1,000 expense coming up, so when I app'ed for the BCP, I knew I would qualify for the SUB within one hour of activating it. It was the "timing" of this expense that solidified by decision to get the BCP that I had already been contemplating about.

I am, by far, NOT a SUB chaser or churner. I have no problems dumping a card every 2-3 years if they no longer serve my purpose. Especially if there are better cards on the market by than.

FTR, the oldest card in my file is only 10 months old.

Re: How much do you pay in anuual fees?

Anonymous — Tue, 20 Mar 2018 20:27:49 GMT

@iced
I would go even further to say that the SUB should not be a determining factor in getting a card simply because it is a one-time thing that will quickly be diluted in terms of value compared to regular use of said card. It should be the recurring value that drives the decision.

I disagree with the above statement, as it won't apply to everyone. I got the CSP just for the $500 bonus. Had I continued using the card, it would have taken me a good 4-5 years to ever achieve $500 CB and it would be at the expense of greater rewards from other cards.