Anyone pay a CC annual fee willingly because of a benefit?

[travelbug]

None of my current credit cards have an annual fee. I'm curious if anyone willingly pays an annual fee to have a certain credit card, because an incentive outweighs the cost of the fee.

For example, I just saw an offer for a Marriott credit card. Annual fee is $65 (after the first year which is free). One of the benefits offered is one free night each year. If a person were traveling anyway and would use that free night's stay each year for sure, then $65 would seem to be a fair trade. If other incentives or rewards seemed attractive enough, then maybe the annual fee would be tolerable whereas usually I refuse to pay annual fees.

Not saying that I plan to get the Marriott card. Seeing the offer just got me curious. So have any of you tolerated paying an annual fee because the incentives/rewards made it worthwhile?

 

[TinkPirateMom]

I pay a $30.00 annual fee for my BoA debit card. I had a free one for years but switched to this one and willingly pay because it is a US Airways Dividend Miles card and the benefits outweigh the costs for me personally.

 

[Gr8t Fan]

I just got the Southwest credit card from Chase which has a $99/year fee, but gave me 50,000 miles (enough for 3 RT flights from Chicago to Florida) for signing up and enough miles at renewal to make the fee a wash. It's going to be the new card that we'll use for EVERYTHING.

 

[Zerosinthecloset]

We're willing to pay the annual fee for our Southwest Visa cards because we get way more back for that fee. Under the old Rapid Rewards system, we each got 5 to 6 free flights per year, and already we have quite a few points for free flights in the future.

 

[IDoDis]

I just got the Southwest credit card from Chase which has a $99/year fee, but gave me 50,000 miles (enough for 3 RT flights from Chicago to Florida) for signing up and enough miles at renewal to make the fee a wash. It's going to be the new card that we'll use for EVERYTHING.

I got in on that deal, too. I think it expires in 2 more days so it's still not too late to sign up. After I make my first purchase (I can buy something for as low as a dollar), the 50,000 points get credited to my card (good for $800 in airfare). Then each year at renewal, 6,000 points gets added to the card which is equal to $100 in airfare so the fee is a wash. The points never expire, either. I'm going to use this card to buy groceries and pay the mortgage and then pay it off each month. Hopefully by our trip next summer, we'll have another free flight earned.

 

[bumbershoot]

We pay $25 per year to our credit union to get the rewards on the CC. Since we've recently cashed out for $150 worth of amazon.com giftcards, it's working for us.


We *were* even paying that same amount to Chase to have a Disney Debit Card, because again the rewards worked out for us, but now that's gone and we will not be using Chase in the future (shot themselves in the foot with that one IMO).

 

[scootch]

What I usually do is call before the year is up, I call to cancel it.... and when they ask why, I say because of the annual fee and most times they will say, ok, we will drop the annual fee. Worth a try!

 

[IDoDis]

What I usually do is call before the year is up, I call to cancel it.... and when they ask why, I say because of the annual fee and most times they will say, ok, we will drop the annual fee. Worth a try!

That used to work quite easily years ago when many cc companies charged an annual fee. Then all of the fees went away and most cards (aside from cards like southwest or Amex) were free.

Now that people are using debit cards more and trying to pay down their credit, banks and cc companies are offering these special incentives to sign up and give you points along the way. I don't know though if the old argument of canceling the card would work in order to get rid of a fee since you've been able to take advantage of the sign-on bonus already. Now if southwest says, "sure, we'll not charge you the fee (which they won't do), then they wouldn't give you the free points either, so you are basically not saving anything and damaging your credit at the same time.

 

[bettymae1121]

Yes, I pay a $60 annual fee for my United Airlines visa card. I earn about 30k miles a year, enough for a free domestic ticket or 1st class upgrade, that's more than worth the fee I think.

I plan on switching to the Starwood hotel credit card. I fly for free (usually) due to a work perk so I used to use the miles I earned to upgrade to 1st. But upgrades are getting harder to get, plus UA is charging $100 per ticket to upgrade in addition to the miles needed. While I'll miss 1st class, if I make the switch I'll be flying AND staying for free (there are Sheratons in every destination we normally travel to) so I think that will be worth having to put up with coach, I think.

 

[ancestry]

I pay an $40 annual fee on my Jet Blue American Express Card. We put all of our purchases on the card and it usually earns us several free airlines tickets every year. $40 is worth it to me to get close to $1,000 each year in free airline tickets.

 

[SuzanneSLO]

We pay an annual fee for the AA MC, Starwood Amex and Amex Platinum. each of them provides enough benefit to me to make it worthwhile. We also have other credit cards which do not charge fees (or we have had those fees waived). On those other cards, such as the Disney Visa, we would not keep the card if there was a fee. It all depends on your reward earning strategy and how much you charge. We don't use a debit card or cash, so we charge a lot. -- Suzanne

 

[csmommy]

Yes, we pay a small fee (under $100) for our Starwood Amex. Every year we use our points plus $180 total cash to stay at a Starwood hotel for 4 nights right on the beach at Virginia Beach facing the ocean with a balcony so it is very worth it for us!

 

[dtstampz]

I just renewed my Delta gold card--first time paying the $95 fee. But I do get a free checked bag for every person on the flight reservation, and I have THREE trips using Delta this year, so I feel it's worth it. For now!

 

[OrangeCountyCommuter]

Yes. My Amex gets me a better shot and an upgrade on Delta. It gets me into the their SkyClub and gives me more miles....

 

[LizEN]

None of my current credit cards have an annual fee. I'm curious if anyone willingly pays an annual fee to have a certain credit card, because an incentive outweighs the cost of the fee.

For example, I just saw an offer for a Marriott credit card. Annual fee is $65 (after the first year which is free). One of the benefits offered is one free night each year. If a person were traveling anyway and would use that free night's stay each year for sure, then $65 would seem to be a fair trade. If other incentives or rewards seemed attractive enough, then maybe the annual fee would be tolerable whereas usually I refuse to pay annual fees.

Not saying that I plan to get the Marriott card. Seeing the offer just got me curious. So have any of you tolerated paying an annual fee because the incentives/rewards made it worthwhile?

I use that exact card and pay the fee. It has been well worth it for us as the fee is cheaper than the room would have cost us and we always use it. The other benefits work for us too. We stay in a lot of Marriotts anyway for work and have made great use of the points for personal travel.

If you don't want to pay the fee, Marriott has a free credit card that gives fewer perks. Or at least they used to.

 

[AmandaRG]

We have a US Airways card with a $99 annual fee. With it we earn towards a free ticket, get two $99 RT companion tix, and a pass for their Club (in certain cities). It has been so worth it for us, as we have 4 tix to buy, so usually we pay full fare for 1, $0 for 1, and $198 for the last two. Not too bad.

 

[alyssa810]

I'm another one paying fees on AMEXs for Starwood and Delta. My DH has the SW Chase card, and I'm actually trying to decide if it's worth it for me to get one as well, since we fly Southwest more than Delta, but I have so many Delta miles I don't want to get rid of the Delta Amex....

I do prefer my cards with no fees though.

 

[scootch]

That used to work quite easily years ago when many cc companies charged an annual fee. Then all of the fees went away and most cards (aside from cards like southwest or Amex) were free.

Now that people are using debit cards more and trying to pay down their credit, banks and cc companies are offering these special incentives to sign up and give you points along the way. I don't know though if the old argument of canceling the card would work in order to get rid of a fee since you've been able to take advantage of the sign-on bonus already. Now if southwest says, "sure, we'll not charge you the fee (which they won't do), then they wouldn't give you the free points either, so you are basically not saving anything and damaging your credit at the same time.

It worked recently for me on a Chase Freedom that gave me a $200 bonus after first purchase. They dropped the fee, kept me as a customer. Worth trying.

 

[Cheshire Figment]

I spend the $65 for the Chase/Marriott Signature Card. I get 5 points for every dollar spent at any Marriott (even if going only to a restaurant). The certificate is good for any group 1 to group 4 stay. But what I consider most important is that I automatically get credit for 15 nights of staying; which is enough, on its own, to get me into Silver Elite and has helped me for several years to get into Gold Elite and even (current year) Platinum Elite.

My latest stay at a Marriott Suites for a week came to $1,150 including taxes and purchased meals. I got credit for 11,500 points base plus 5,750 Platinum bonus plus there will be another 5,750 for the spending on the credit card, for 23,000 points total.

 

[prncess674]

I am a credit card "churner" meaning I am constantly signing up for new cards that offer big bonus miles/points. Many of these bonus miles come with no annual fee for the first year, some with a fee which pays for the initial bonus miles. For example earlier this year Citibank had an offer for 75,000 bonus miles, no annual fee for the first year as long as I charged $3,000 in the first 90 days. 75K is the equivalent of 3 domestic coach tickets or just under what is needed for a biz class ticket to Europe. The card will renew in a few months and I will cancel and close the card before I am dinged with an annual fee.

I have one no fee card that is my oldest card that I wll never close since it is what determines my length of credit history. My overall credit card score hovers between 790-815 so it isn't a big deal to keep applying for cards. I simply close these cards because I don't want open credit with these banks if another amazing offer comes down the pipeline.