I always am blown away when folks tell me they have canceled some card due to the annual fee. Now I am not saying anyone should willy nilly just pay a fee, but you really need to run the numbers before you simply cancel a high end card due to the hefty annual fee. I am happy, no I take that back, thrilled, to shell out $1,750 (yes one thousand seven hundred and fifty) bucks each year for the four cards above. Let me break it down why and look at the real NET numbers out of pocket.
The first one, my Chase BANK Sapphire Reserve card is clearly the new “ultimate travel card” in my wallet, but as long as they don’t go messing this card up I will pay the $450 forever. Why? First off since I get $300 travel credit that I will and do use, my real card cost is only $150. That is not a crazy price at all for all the other perks the card gives me and I will get more value than that back sending all my Ultimate Rewards points to this card for redemption.
Then we have the non-Delta Business AMEX Platinum card. Keep in mind year after year it gives me $200 back and I simply buy Delta $50 eGift cards at the start of each year. So my real out of pocket cost is $250 for this card. Still not cheap but I love the Centurion Lounges and I USE THEM! I could also use the card to get into Sky Clubs if I were not a Diamond already with free membership. But also I really value not having to pay $28 each for international Gogo wifi. The 10 passes I get each year alone wipe out the fee for this card.
Then we have The Delta AMEX Reserve card. Well in my case especially, The Business Delta AMEX Reserve card but they are basically the same. This card, unlike the ones above as well as the one below, does not offer any kind of travel credit back. I am stuck paying $450. Now I do work the AMEX “Offers to You” and that does help offset a bit, but not fully. But I have to have some kind of Delta AMEX card to be MQD exempt via $25,000+ spending each year and it might as well be one that gives me the chance to earn 30,000 MQMs each year and a bunch of SkyMiles as well. The fee on this one hurts at full price, but I am still getting real value for the fee.
Lastly we have a card that everyone went WILD over last year about this time because CNB offered 100,000 points for their Crystal card worth at least $1000 in VISA gift cards and about $1200 if redeemed for flights that would then EARN you points as well. I have not paid the fee yet but will soon and will be keeping this card. Here is why. The card gives you $250 back per user in travel credits (I just buy AA gift cards) and you can have four of them for the one flat annual fee. Yep, they will net pay me $600 to keep the card. Oh and they give me $100 off if I use the card to book flights for my wife and I traveling together. Not really a hard choice to keep this one right?
So let’s run the numbers for these four cards.
- CSR $450-300=$150
- AX Plat $450-200=$250
- AX DL $450-0=$450
- CNB $400-1000=(-$600)
So all in net I am NOT really paying $1750 at all but only net $250 out of pocket and that is before any other perks of these four cards of which there are clearly many and have real, tangible cash value that I would have to shell out if I did not have the perks.
What is the lesson from this? Please don’t just cancel a card due to the fee. Look at the real cost to you and if keeping and paying it is actually worthwhile to you! – René
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