Credit Cards

Would You Sacrifice Bonus Miles if a Credit Card Waived Its Annual Fee?

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Rene’s Points For Better Travel, a division of Chatterbox Entertainment, Inc. has partnered with CardRatings for our coverage of credit card products. Rene’s Points For Better Travel and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. As an Amazon Associate I earn from qualifying purchases.


When it Chase relaunched the United Club Infinite Visa credit card on Tuesday, it did something rather interesting, given the current, pressing economic times: it waived the first year of the card’s hefty $525 annual fee.

But there was a catch: there was no welcome bonus mile offer.

For example, the Delta SkyMiles Reserve Business American Express currently offers 45,000 bonus SkyMiles and 10,000 MQM when a new cardholder spends $4,000 in purchases within three months of being approved. Its $550 annual fee is not waived.

In general, would you rather forego a miles bonus in lieu of a waived annual fee?

Waived Annual Fees: Nothing New

As I mentioned on Tuesday, it’s not uncommon for some credit cards to waive the first year of an annual fee — while still including bonus miles or points.

 

Delta Gold American Express Card

The United Explorer Card waives the $95 annual fee during the first year and offers new applicants 40,000 bonus miles after spending $2,000 in purchases within three months.

Similarly, Delta SkyMiles Gold Amex gives you 35,000 bonus SkyMiles after you spend just a grand within three months of being approved — and the $99 annual fee is gratis the first year.

So Why Am I Surprised About the United Club Infinite Comping the First Year?

What raised my eyebrows about the United Club Infinite Visa offer was such a large annual fee ($525) being waived the first year.

What About the Bonus Miles?

I believe the previous offer for this card was something like 100,000 bonus miles after spending $5,000 within the first three months of approval.

100,000 miles is a lot.

And if you value United MileagePlus points at 1.3 cents per, that’s $1300 in travel. So now the waived annual fee deal doesn’t look so great.

A large stack of credit cards.

But right now, many people are cutting their budgets — and not traveling. They don’t know when they’ll be able to use their miles. So, tempting folks with the waived first year for a decent benefits card (Club lounge access, Global Entry credit, 25% statement credit on onboard purchases) is an interesting approach.

Pick Your Own Welcome Bonus?

What if credit card companies gave new members a choice to select when applying for their card: waived annual fee the first year or bonus miles?

I’ve said it before and I’ll say it again: everyone’s budgets and travel preferences are different. So what works for one person isn’t always best for someone else.

This kind of versatility could make for even happier customers.

What Do You Think?

Would you prefer a waived annual fee for the first year? Should credit card companies give customers a choice? I’d love to hear your thoughts in the below Comments section.

— Chris

Rene’s Points For Better Travel, a division of Chatterbox Entertainment, Inc. has partnered with CardRatings for our coverage of credit card products. Rene’s Points For Better Travel and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. As an Amazon Associate I earn from qualifying purchases.


Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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