Travel Blerd

I Spend over $2000 in Annual Credit Card Fees But It’s OK

Alaska Airlines, American Express, BankAmeriDeals, Chase, Credit Cards, Membership Rewards, U.S. Bank, What's in my Wallet

This past week I was doing some reconciliation of my expenses from my recent business trips and noticed that the annual fees on my Citi Prestige and US Bank Altitude Reserve came due. This got me thinking, how much am I actually spending on annual credit card fees? I currently hold six cards with annuals fees between $75 and $550. Of those 6, 4 are considered Premium cards. After I went through all my cards and the out of pocket total came $2020. Thing is I’m ok with paying that amount and here’s why.

How did I get here?

I currently carry 6 cards with annual fees. They are the following:

  • Alaska Airlines VISA $75
  • Citi Prestige $450
  • American Express Everyday Preferred $95
  • Chase Sapphire Reserve $450
  • US Bank Altitude Reserve $400
  • American Express Platinum $550

For most people this seems like a lot of money to pay for credit fees. The thing is most of these cards offer airline or credits that effective decrease the annual fee. For instance, the American Express Platinum has the highest annual fee but includes an annual airline credit of $200, Uber credit of $200 and Saks Fifth Avenue credit of $100 (on top of the credit for Global Entry). This effectively makes the annual free $50 for this card. When you factor in all the credits for the cards I carry, the effective annual fees are the following:

  • Alaska Airlines VISA $75 (No credits)
  • Citi Prestige $200 ($250 airfare credit)
  • American Express Everyday Preferred $95 (No credits)
  • Chase Sapphire Reserve $150 ($300 airfare credit)
  • US Bank Altitude Reserve $100 ($300 airefare credit)
  • American Express Platinum $50 ($200 airline credit, $200 Uber credit, $100 Saks credit)

Once all the credits are factored in, I’m effective paying $670. $670 still seems like a lot of money to pay for credit card fees, but I end up paying no annual fees last year.

Getting to $0 in Annual Fees

My Citi Prestige is the real star here. I’m a consultant that travels. I pay for my own expenses and I’m reimbursed once I submit my expenses. The Citi Prestige has a great benefit called 4th night free. If you spend 4 straight nights or more in the same hotel, Citi will rebate the cost of 1 night based on the average of the nights stayed. If you book the stay by calling or emailing the Citi Concierge, you not only get stay credits but you can also take advantage of corporate rates. I usually travel every other week and the 4th night free rebates add up to a significant sum.

It doesn’t stop there, American Express and Bank of American offer cash back for spending at certain merchants. Bank of America’s program is called BankAmeriDeals. Over the past 4 years that I’ve held my Alaska Airlines VISA, I’ve received over $200 cash back. The DirecTV Now deal I posted earlier was from BankAmeriDeals. Number and type of deals seems to vary but I do consistently have 5% – 10% cash back at Starbucks.

American Express has AMEX offers. AMEX offers can be hit or miss depending on the card. Some offers give you cash back while others given you membership rewards. With AMEX offers, some offers are driven by actual spend on the card. Since I’ve had my American Express Everyday Preferred, the cash back I’ve received has more than covered the annual fee. I also hold 2 other AMEX cards that do know have an annual which also have AMEX offers so I have even more opportunity for cash back.

After all is said and done, I really don’t pay anything in annual fees. In fact, Citi is paying me to hold the Citi Prestige, considering how many times I use the 4th night free benefit. I know many people don’t fly or stay in hotels as much as I do, but one thing that you have to remember is these are all reward cards. There are so many benefits that go beyond cash back that you also have to factor in when deciding whether to pay an annual fee on a card.

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