When It Pays to Get a Credit Card With a Big Annual Fee

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Don’t be turned off by a card with an eye popping annual fee, especially if you travel often. Cards with the highest fees often come with the cushiest returns, potentially well above what you pay annually to own them. For example, some cards that charge up to $400 or more a year offer sign-up bonuses worth almost twice the card’s annual fee. Other cards offer a wide range of valuable freebies that help you shave down expenses or make travel more convenient.

Here are some of the most common super premium credit card benefits that can make a high annual fee worth the big expense:

Supersized Sign-Up Bonuses

You may have to pay hundreds of dollars upfront, but if you use your card regularly, you’ll almost certainly recoup all or most of the first year’s fee—and maybe some of the second year’s fee, too. Most super premium cards, for example, offer sign up bonuses worth hundreds of dollars in free travel. For example, the American Express Platinum card, which charges a $550 annual fee, offers 60,000 bonus points—worth at least $600 in travel—when you spend $5,000 in the card’s first three months. Meanwhile, the Chase Sapphire Reserve card ($450 a year) and the U.S. Bank Altitude Reserve Infinite Visa card ($400 a year) offer 50,000 bonus points that are worth up to $750 in free travel.

More Generous Rewards

Cards with high annual fees also typically offer stronger rewards programs, so if you’re a heavy spender, you should have an easier time recouping the cost of your annual fee. How much value you get out of a card’s idiosyncratic rewards program will depend, though, on your particular spending habits, so you’ll have think carefully about your spending before you settle on a card. For example, the U.S. Altitude Reserve Visa Infinite card offers three points for every dollar you spend on mobile purchases—a potentially game changing benefit for cardholders who use their phones for most of their purchases—and another three points for every dollar you spend on travel.

But if you don’t travel often or use your mobile wallet, you won’t get nearly as much out of it. Similarly, the Citi Prestige card (which charges a $450 annual fee) offers three points for every dollar spent on flights and hotels and two points for every dollar spent on dining out and entertainment. But if you’re a homebody, you could have a hard time earning enough points after the card’s first year to make up for the annual fee. 

Substantial Travel Credits

Most high fee credit cards also offer annual travel credits you can use to pay for air travel expenses, taxi trips or train tickets, depending on the card. The U.S. Bank Altitude Reserve card, for example, offers a $325 travel credit you can use on airfare, hotel and cruise bookings, car rental purchases, taxi trips, train fare and more. It also offers credits for complimentary inflight Wi-Fi. The Chase Sapphire Reserve card offers a similar travel credit worth $300. Meanwhile, the Citi Prestige card offers a $250 travel credit you can use toward any air travel expenses, included airfare and baggage fees, while the American Express Platinum card offers $200 to pay for incidental air travel fees, such as checked bags or inflight meals.

The Platinum card also offers up to $200 worth of Uber credits each year so you don’t have to pay for additional transportation once you land. In addition, most cards with a three-figure annual fee also cover the cost of applying for Global Entry, which otherwise costs $100, or TSA Precheck, which costs $85, so you can zip through airport security lines.

Exclusive Promotions

With most high fee credit cards, you’ll also get access to exclusive discounts and promotions, which can add up to hundreds of dollars a year if you regularly use them. For example, the Citi Prestige card rewards frequent travelers with a free fourth night stay each time you book three consecutive nights worth of hotel stays on your card. Meanwhile, the American Express Platinum card offers exclusive discounts and premium perks at participating luxury hotels and resorts. According to American Express, the value of these luxury hotel perks—including complimentary room upgrades, free breakfasts and $100 credits for spa services or other hotel amenities—can add up to $550, on average.

To get the most value out of these freebies, though, you need to already be a heavy spender.

Additional Travel Perks

In addition to travel credits and discounts, high fee cards typically offer additional travel luxuries that make traveling comfier and more convenient. For example, premium cards often come with free access to airport lounges where you can relax away from the hustle and bustle of a busy airport and enjoy complimentary food and beverages. Some cards, such as the United MileagePlus Club card ($450 annual fee) and the Delta Reserve credit card ($450) also offer priority boarding so you don’t have to wait so long in line to get on your flight.

If you travel a lot and regularly take advantage of (and pay for) such travel perks, then the annual fee pays for itself.

High fee cards also tend to offer stronger travel protections, such as trip cancellation insurance, baggage insurance and trip delay protection. That means that common hiccups, such as missed or canceled flights, aren’t nearly as stressful—or expensive.