Annual Fee Credit Cards

[MickinMD ★]

I'm sure there are some credit cards with hefty annual fees that pay-off with huge cash-back rewards for people who travel a lot, purchase products for their businesses with credit cards, etc.

But I don't see the advantage of annual-fee credit card for most people, especially me. If you're paying an annual fee, make sure you're getting your money's worth and there's not a better no-annual fee alternative.

I have two no-annual fee cards that give 5% cash-back on quarterly rotating categories, Discover and Chase Freedom Visa.  I got 5% back for gasoline and groceries for Jan-June with those two cards.  Two other no-annual fee cards give 5% cash-back: The Amazon Store Card does 5% for all Amazon purchases (no annual fee but you need to be a Prime Member) and the Capital One Walmart Mastercard does 5% for one year in Walmart stores, 2% after, and 5% for Walmart Online always.  The no-annual-fee City Double Cash Mastercard gives 2% cash-back always and is my fallback card when others offer 1%.  The no-annual-fee Citi Costco Anywhere Visa (requires Costco membership) gives 2% for Costco merchandise, 4% for Costco and stand-alone gas stations (Shell, Exxon, etc.), and 3% for restaurants and bar-restaurants.

The only annual-fee card I ever had was an American Express Blue Cash Preferred card that I got because it gave you a $150 cash-back bonus if you spent so much money within 90 days of getting the card and I was going to buy 4 new car tires.  It had a $75 (now $95) annual fee - the first year's fee waived - but during the 2nd year I realized I was only using it to get 6% cash-back for some of my groceries - it only did 1% elsewhere and I had other cards that did better - and it didn't save me the $75 annual fee - so I switched to the no-annual-fee Amex Blue Cash Everyday which gives 3% cash-back at major supermarkets.

Today, I read an article about the American Express "Black" Card with a $5,000 annual fee, which said, "it's not for everybody."

DUH!  You wonder if these online reporters are the children of very wealthy people who have connections and get their kids jobs, and these reporters have no idea about the real world after reading articles like this and other like an ABC article on "Copycat Fashions for Skinny Wallets" where the outfits ranged in price from $395 to $999.

[bikeman564™]

I have no annual fee, no rewards. Easy.

[Airehead]

No annual fees. We get something back on the card we use at Costco. It pays for the salted caramel chocolates that @Scrapr likes. 

[Prophet Zacharia]

For $149, I get free airfare for two to Hawaii each November/December. That’s not the actual feature, but how it plays out.

I guess it also got free airfare for two to Aruba this spring as well

[Kirby]

Like most things, the value of the benefits will depend on the person and their own lifestyle.  You raise a good point that it's important to check what you have to make sure it still fits your needs.   And the benefits on a lot of cards change over times  (travel cards are giving more generous benefits on other areas now, while some cash back cards have cut non-cash benefits recently) so a card that once worked for you may no longer be the best one.

One other thing to think about when considering your credit cards is who are the issuing banks.  It can be helpful to have cards issued by more than one bank.  During volatile economic times, some banks were reducing unused credit limits or cancelling cards.  If all your cards are with one issuer, you could find yourself disproportionately impacted at a time when you may be counting on your cards to see you through a temporary problem. 

[shootingstar]

I don't have an annual fee...  I do get some rewards for spendning...it's not the uber great version....seems since covid, the credit card company has scaled down earning of rewards. Probably because so many folks are using credit card because of non-contact rules.