Cards with Annual Fees

I have a few friends who are enticed by the huge sign up bonus of these cards (which is exactly the point) who carry a balance every month.  I feel like I can only warn someone so many times about this.  CARRYING A BALANCE FOR REWARDS IS LUDICROUS.  If you think of it, most “miles” or ‘points” will equal about one cent in value (if converted to cash).  True, converting points to cash back is the least lucrative method of point redemption but it’s a starting point.  Carrying any type of balance would negate every award point you earn.  

Although I own multiple cards with fees, I understand that it could be very difficult for the consumer who isn’t used to owning a credit card with a fee vs. a free card.  My only response to this is that you get what you pay for.  Sure, we all like free but you can’t expect to receive 5 star accommodations for nothing.  Basically, premium cards (those with high annual fees) justify their cost in many ways and they’re worth it for the avid traveller because the perks far outweigh the annual fee.  In many ways, you could argue that the value of these perks is worth more than the annual fee.  

But if spending a few hundred dollars a year in a fee seems steep, try starting off with a no annual fee card that earns rewards points.  At least you’ll be able to dangle your feet in the water to see if your spending and travel habits warrant paying a fee.  

Also, be honest with the amount of travel you actually do, not the amount you MIGHT do.  You can always graduate up to higher fee cards (let’s be honest, these credit card companies will always want your business) but it makes no sense to pay these fees if you’re only travelling sporadically.  Sure, the rewards can be great but nothing is free.  Is it worth paying $100+/year to earn points faster if you only travel once a year?  Or would it be better to have a no fee card that earns points at a slightly slower rate but have $100 to spend as you wish?  

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