Are premium credit cards worth the annual fee?

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Premium credit cards have quite the allure. Not only do they look fancy, they come with exclusive perks and rewards that lead to free flights, hotel stays, and more. But, in exchange, you’ll often pay a steep annual fee.

Despite this, premium cards can be worth it depending on your spending habits and lifestyle. Some may consider it the price you pay for access to elite rewards. For others, the cost may outweigh the benefits. The answer depends on which benefits you want and if you use those benefits enough to justify the high cost.

What are premium credit cards? 

Premium credit cards are high-end rewards cards that come with enhanced rewards and benefits like airport lounge access. These cards often come with high annual fees, usually hundreds of dollars. Many view premium credit cards as status symbols because they come with luxury perks not available with other cards.

Generally, you need a very good — or excellent — credit score to qualify for a premium credit card.

The best premium credit cards

Here are some top premium credit cards to consider.

The Platinum Card® from American Express

Rewards:

• 5X points on up to $500,000 per calendar year spent on directly booked airfare, flights, and prepaid hotels through American Express Travel
• 2X points on prepaid car rentals through American Express Travel
• 1X points on all other purchases

Annual fee: $695

With this card, you can enjoy benefits like airport lounge access, concierge services, travel credits, and elite status with hotel loyalty programs. This card also offers a Membership Rewards program with flexible redemption options and bonus points on travel and dining purchases. Plus, you’ll get over $1,500 in credits to help offset the $695 annual fee. See rates and fees.

Chase Sapphire Reserve® 

Rewards:

• 10X points on hotel stays, car rentals and Chase Dining purchases through Chase Travel℠, plus on Lyft purchases (through March, 2025)
• 5X points on air travel through Chase Travel℠ (after earning your $300 travel credit)
• 3X points on restaurant and general travel purchases (after earning your $300 travel credit)
• 1X points on all other purchases

Annual fee: $550 

The Chase Sapphire Reserve card also comes with a $300 annual travel credit, airport lounge access, travel insurance, and a Global Entry or TSA PreCheck fee credit. 

Capital One Venture X Rewards Credit Card 

Rewards:

• 10X miles on hotel and rental cars booked through Capital One Travel
• 5X miles on flights through Capital One Travel
• 2X miles on all other purchases

Annual fee: $395

With the Capital One Venture X Rewards Credit Card, you can earn unlimited miles on every purchase, making it ideal for those who love to travel. You’ll also get TSA PreCheck or Global Entry fee credits and travel insurance.

Compare these options to other top travel rewards cards to determine which suits you best.

Benefits to premium credit cards 

Premium credit cards come with a range of exclusive perks that can enhance your lifestyle. These can include perks you probably won't find elsewhere, or must pay for separately.

Elite travel cards offer benefits like airport lounge access, travel credits, hotel upgrades, and complimentary concierge services. If you frequently travel, these benefits can make your trips more enjoyable and convenient.

Premium credit cards also come with robust rewards programs that earn high rates of points or cash back on your spending. You can redeem your rewards for travel or statement credits, potentially offsetting the cost of the annual fee. If you spend a significant amount on your credit card and can maximize the rewards, a premium credit card can be a great way to earn valuable perks.

Here are some other benefits, discounts, and extras you may receive with a premium credit card:

• Lucrative sign-up bonus offers
• Competitive bonus reward rates
• Airport lounge access
• Elite status
• Priority airport benefits
• Travel credits
• Rideshare credits
• Hotel credits
• Entertainment credits
• Wholesale club membership credits
• Gym membership credits
• TSA Precheck, Clear, or Global Entry membership credits
• 24/7 concierge service
• Hotel and/or airline status
• Discounted car rental
• Premium travel and consumer protections
• Travel insurance
• Dedicated concierge for reservations
• Exclusive access to events
• Partner discounts and perks
• No foreign transaction fees

Premium credit cards also come with higher credit limits, allowing you to make larger purchases or carry a higher balance if needed. This can help you manage your cash flow or take advantage of special offers or opportunities.

Is a premium card's annual fee actually worth it?

A premium credit card can unlock access to elite perks, but there's a cost for entry. Card issuers charge hundreds of dollars annually for access to their luxury benefits. Fees can range anywhere from $250 to $695.

Any time you pay for a credit card, you should consider its benefits and if it offers enough value to justify the fee. Value is critical with premium cards because of the high price tag.

Calculate how much you spend on your credit card and estimate the value of the rewards you can earn. If the rewards outweigh the cost of the annual fee, it may be worth it.

Premium cards often come with features, like annual credits, which can help offset the fee. For example, the Platinum Card® from American Express features several travel and brand credits valued at over $1,500 annually. See rates and fees. The Chase Sapphire Reserve® and the Capital One Venture X Rewards Credit Card offer $300 in travel credits, among other credits, each year.

Alternatives to premium credit cards

Elite credit cards are elite for a reason. They feature high annual fees and higher eligibility requirements than other cards. Card issuers are often more selective about whom they allow to open luxury card accounts.

If you don't meet the requirements for a premium card or don't think you'll get enough value out of one, there are other rewards credit cards that offer great benefits, but at a much lower cost.

Blue Cash Preferred® Card from American Express: This card offers generous cash back rewards on everyday purchases, including 6% cash back at U.S. supermarkets (up to $6,000, then 1%), 6% cash back on select U.S. streaming services, 3% cash back at U.S. gas stations and on transit, and 1% cash back on other purchases. This card has an introductory annual fee of $0 in the first year and costs $95 annually afterward. See rates and fees.

Chase Sapphire Preferred® Card

This travel card comes with lower rewards earning rates than the Reserve, but only has a $95 annual fee. Earn 5X points on travel booked via Chase Ultimate Rewards and on Lyft purchases through March 2025. You’ll also earn 3X points on dining, streaming services, and online grocery purchases, and 1X points on all other purchases.

Citi® Double Cash Card

This card offers a simple cash back program, providing 2% cash back on all purchases – 1% when you make the purchase and an additional 1% when you pay it off. It has no annual fee and is a great option for those who prefer simplicity and consistent rewards.

Capital One Venture Rewards Credit Card

With a $95 annual fee, the Venture Rewards Card is much more affordable than Venture X, but with lower rewards. You’ll get 5X miles on travel booked through Capital One Travel and 2X miles on all other purchases. 

How to find the right  credit card for you

Whether you're looking for a premium credit card or a basic one, it's important to choose a card that aligns with your spending habits, financial goals, and lifestyle. Here's a step-by-step guide to help you find the perfect credit card. 

1. Assess your credit score 

Before applying for a credit card, check your credit score to understand where you stand. If your credit score is good to excellent (670 or higher), you'll have a better chance of qualifying for premium credit cards with attractive rewards and perks.

2. Review your spending habits 

Analyze your spending patterns to determine which categories you spend the most on, such as dining, travel, groceries, or gas. Look for credit cards that offer higher rewards or cash back in your top spending categories. 

This will help you maximize your earnings and get the most value from your credit card.

3. Consider your goals 

Think about your financial goals, both short-term and long-term. Are you looking to save money on interest by transferring a balance from a high-interest credit card? Do you want to earn rewards points for a specific redemption, like travel? Or are you focused on building or improving your credit score? Identifying your financial goals will help you narrow down your credit card options.

4. Compare rewards and benefits 

Once you've identified your spending habits and financial goals, compare the rewards and benefits offered by different credit cards. Some cards offer cash back, while others provide points or miles that can be redeemed for travel, merchandise, or gift cards. 

Premium credit cards often come with additional perks, such as airport lounge access, travel credits, or concierge services. Consider which rewards and benefits are most valuable to you.

5. Evaluate the fees 

While rewards and benefits are important, don't forget to consider the costs associated with a credit card. Some premium credit cards come with high annual fees, which may be worth it if you can take full advantage of the card's benefits. 

However, if you carry a balance, a low-interest credit card may be a better choice. Be sure to compare interest rates, annual fees, balance transfer fees, and foreign transaction fees before making a decision.

The bottom line

You can offset the high annual fee of a premium credit card by taking advantage of its benefits, credits, and other perks. If you enjoy living in luxury or spend considerable time traveling, a good premium card can come in handy and improve the quality of your travel.

A premium credit card is only worth what you get out of it. Weigh the card's benefits versus the cost. Consider your financial goals and lifestyle to find the best card option.

[Disclaimer]: *Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by Amex Assurance Company

Editorial disclaimer: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.