Annual Fee Cards Can be Worth the Price — If You Choose the Right One. Here’s When to Consider Paying

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Some of the best rewards credit cards can also be the most expensive — ranging from under $100 to upwards of $600 each year in annual fees. 

Many credit cards with annual fees typically have high rewards rates and great benefits, as well as other perks like a big welcome bonus or annual statement credits. But to get the best value from a credit card with an annual fee, you must use your card and its benefits often enough to offset the charge. If you don’t use your card frequently, or its benefits don’t align with your regular spending, it can be difficult to gain enough value to make up the cost.

Like any credit card, it helps to evaluate your individual spending habits and credit goals before opening a card with an annual fee. Here are some ways you can determine if an annual fee card is right for you, and a few of the best options available today. 

What Is a Credit Card Annual Fee?

If your credit card has an annual fee, you’ll generally see the charge added to your statement once a year, on the month of your account anniversary. Then, you can simply pay the fee along with your balance. 

Most commonly, premium travel and rewards cards with plenty of added benefits charge annual fees. Some cards designed to help you build credit may also charge an annual fee — and may earn rewards or have perks not common among other credit-building options. But while these cards can help you improve your score or earn higher rewards, you don’t have to pay a fee to maximize your spending; there are plenty of credit cards that don’t charge an annual fee and still offer great value. 

“I think the key point is that if you can use the benefits without having to go out of your way, then an annual fee is worth it,” says Chris Dong, a reporter for The Points Guy (which is owned by Red Ventures, like NextAdvisor). In other words, if an annual fee card offers ample savings on purchases you would make anyway, you can earn back the cost and more. 

Perks of Annual Fee Credit Cards

As a general rule, annual fee cards are only worth the cost if the benefits you’ll earn have a greater value than the yearly charge. That’s why it’s important to find a card that suits your spending and credit goals. Here are a few things to look for in an annual fee credit card: 

Rewards Potential 

Rewards credit cards with an annual fee may offer higher rewards rates than no annual fee options. 

For example, the Blue Cash Preferred® Card from American Express charges a $0 intro annual fee for the first year, then $95.(See Rates & Fees) and 6% cash back at U.S. supermarkets, up to $6,000 per year (then 1%), among other rewards. But its no-fee sister card, the Blue Cash Everyday® Card from American Express, offers a lesser 3% back at U.S. supermarkets on up to $6,000 per year (then 1%), among other rewards. If a large amount of your monthly budget goes toward groceries, and you’re able to max out the $6,000 annual cap, you’ll more than make up for the Blue Cash Preferred’s annual fee with its increased rewards rate. What’s more, you can outpace the savings you would have gotten with the Blue Cash Everyday card, even after accounting for the fee.

When it comes to travel, annual fee cards often offer more benefits, protections, and annual credits compared to no fee options. If you’re a frequent traveler, you may choose a travel credit card with an annual fee for increased points and miles toward discounted flights and hotels, as well as annual credits for things like airport lounge access, TSA PreCheck or Global Entry membership, airline fees, and more.  

These cards may also offer more options for redeeming your rewards. Many no annual fee cards may restrict rewards to cash or statement credit redemptions, which can be great for those seeking simplicity. But travel and rewards cards with annual fees may earn points and miles toward robust rewards programs with more flexible options, like travel redemptions, transfers to airline and hotel partners, and more.

To make the most of your annual fee card, choose one with rewards and benefits on purchases you already plan to make, regardless of the rewards. If you don’t fly very often, for example, 5x rewards on flights and travel redemption options won’t be of much use to you. The best way to offset an annual fee is with a card that aligns with how you already spend.

Card Benefits 

The extra perks that annual fee credit cards offer can also go a long way in adding value to the card. 

To start, these cards usually offer very high welcome bonuses if you meet a certain spending threshold within a given amount of time. The Capital One Venture X Rewards Credit Card, for example, charges a steep $395 annual fee, but you can earn 75,000 bonus miles (worth $750 toward travel) if you spend at least $4,000 within three months of account opening.

But other benefits can help you maximize value long-term. Often, credit cards with annual fees come with perks to use toward travel  — like credit toward TSA PreCheck or Global Entry, complimentary airport lounge access, and travel protections. Others may offer discounts from brand partners, like Lyft or Uber, or special entertainment perks — like access to ticket presales, and cardmember exclusive events.  

Building Credit

Rather than increased rewards and benefits, some annual fee credit cards are designed for people with bad credit or no credit history. Compared to other cards for building credit, these cards may offer more rewards on spending or higher credit limits. 

Pro Tip

It’s even more important to practice good credit habits with an annual fee credit card. Pay your balance in full and on time each month to get the full value of your rewards and benefits without taking on high interest debt, which can add to the card’s cost.

Still, if your main goal is building credit, there are plenty of no annual fee options and even secured credit cards that can help you do so without the added cost. What’s more, it’s even more important to avoid charging purchases you can’t afford while building credit, especially if you have a card with an annual fee. Practice good credit habits — like paying your balance in full on time and keeping your credit utilization low to boost your credit score. 

Factors to Consider Before Getting a Credit Card with an Annual Fee 

Regardless of the added benefits you may earn from a credit card with an annual fee, there are also a few drawbacks to these cards. 

“I generally don’t recommend cards with annual fees,” says Raquel Hinman, president of Hinman Financial Planning. “Where I do think they can make sense for people is when they have specific rewards that really work for certain people.” 

For example, certain travel cards might be worth the annual fee if you already travel multiple times per year and spend a large amount on booking flights and hotels.

You should also be aware of how your card’s rewards and terms can change. “Even if there are special benefits, the terms can change year by year,” says Billy Hatton, CFP, founder of Billfold Budget Consulting. “So it’s important to review your card’s benefits at least annually to make sure you are still receiving the same benefits you expect.” 

Finally, make sure you know when your annual fee is charged each year, so you’re not caught by surprise. “If you’re budgeting or somewhat living paycheck to paycheck, or on a fixed income, that annual fee can surprise people,” says John Bovard, CFP, founder of Incline Wealth Advisors.

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Chase Sapphire Preferred® Card

Chase Sapphire Preferred® Card

  • Intro offer:
    60,000 points
  • Annual fee:
  • Regular APR:
    20.24% – 27.24% Variable
  • Recommended credit:
    670-850 (Good to Excellent)
  • Apply Now externa link icon At Chase’s secure site
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American Express® Gold Card

American Express® Gold Card

Annual Fee Cards to Consider

Before you apply for any card — and especially one with an annual fee — make sure you pay down any existing high-interest debts and can afford to pay your balances in full each month. Accruing interest on a credit card balance can quickly outpace any rewards and make an annual fee card even more costly. Then, you can search for the right combination of rewards and benefits that will bring you the most value.

“Consumers that benefit the most from cards with annual fees are those that can comfortably pay their credit card balance each month and are willing to take the time and energy to regularly review and compare various credit card offers,” Hatton says.

Here are a few of our favorite credit cards that come with an annual fee, but have rewards that offset the cost. 

Chase Sapphire Preferred Card

Chase Sapphire Preferred is our favorite card with an annual fee under $100. For $95 annually, you’ll earn 5x points on travel booked through Chase Ultimate Rewards. All other travel purchases earn 2x points. You’ll also earn 3x points on dining (including takeout and delivery), online grocery purchases, and select streaming services, and 1 point per dollar on everything else.

There are plenty of added benefits, including complimentary a DoorDash DashPass membership through 12/31/24 (otherwise $9.99 per month), but must be activated by 12/31/23. When you use your card to book hotels through Chase Ultimate Rewards, you can qualify for up to $50 in credits each year. And each account anniversary, you’ll get bonus points equal to 10% of your total purchases over the previous year.

There’s a welcome bonus of 60,000 points when you spend at least $4,000 within three months of account opening. When you redeem your points for travel through Chase Ultimate Rewards, you’ll get a 25% boost, making the welcome bonus worth $750 toward travel. There are no foreign transaction fees, and the card has a variable APR between 20.24% and 27.24%.

Capital One Venture Rewards Credit Card

The Capital One Venture Card has a $95 annual fee. It’s great for frequent travelers who want to earn miles toward future travel on everyday purchases. You’ll earn unlimited two miles per dollar on every purchase, and five miles per dollar when you book hotels and rental cars with Capital One Travel. You’ll also earn 75,000 bonus miles (worth $750 toward travel) when you spend $4,000 within three months from account opening. 

The card comes with several travel perks — including up to $100 credit for TSA PreCheck® or Global Entry membership every four years, travel assistance services, auto rental collision damage waiver, and travel accident insurance*. You can also transfer your miles to Capital One transfer partners for more flexibility when booking travel.

You can expect a variable APR 20.24% – 28.24% for new purchases. This Capital One card doesn’t charge foreign transaction fees. 

American Express Gold Card

The American Express® Gold Card comes with great rewards on everyday  dining and grocery spending, as well as on travel. It offers 4x points at restaurants and U.S. supermarkets (up to $25,000 spent per year, then 1%), 3x points on flights booked directly with airlines or through Amex Travel, and 1 point per dollar on all other spending.

For a $250 annual fee, you’ll get some additional benefits, including up to $120 in Uber Cash annually, up to $120 in annual dining credits to spend at eligible restaurants and food delivery services, and a $100 hotel credit when you book at least two nights through the Hotel Collection. 

There are no foreign transaction fees, and a variable APR of 20.24% – 27.24% on eligible charges.

American Express Blue Cash Preferred® Card

The American Express Blue Cash Preferred Card offers high cash back rewards on everyday spending in several categories. It offers 6% cash back at U.S. supermarkets (up to $6,000 per year, then 1%), 6% on select streaming subscriptions, 3% cash back on transit and at gas stations, and 1% cash back on all other purchases. 

After opening your account, you can earn a $250 welcome bonus after spending $3,000 within the first six months. And cardmembers will get several perks — including up to $120 cash back for Equinox+ membership annually, car rental loss and damage insurance, and return protection on eligible purchases.

There’s a $0 intro annual fee for the first year, then $95. You’ll also get an introductory 0% APR on new purchases and balance transfers for the first 12 months and a variable APR of 18.24% – 29.24% after that. 

Citi Premier® Card

The Citi Premier Card offers triple points in select categories for a $95 annual fee. You can earn three points per $1 spent at restaurants, supermarkets, air travel, hotels, and gas stations. You’ll get one point per dollar for all other purchases.

If you spend $4,000 within the first three months, you can get an 60,000-point welcome bonus. You can qualify for $100 off a single hotel stay of at least $500 booked through Citi each year, and you can transfer points to Citi’s travel partners for more flexible redemptions. 

There’s no foreign transaction fees, and this card has a variable APR of 20.24% – 28.24%.

The Bottom Line 

Editorial Independence

As with all of our credit card reviews, our analysis is not influenced by any partnerships or advertising relationships.

Whether a credit card with an annual fee is worth the cost for you boils down to several factors. The annual fee may not be worth it if you have to spend more than usual to earn perks or if you won’t use the rewards that the card offers, but these cards can also add a lot of value to your spending if the benefits align with your budget. Remember to pay close attention to when the annual fee is due and if your rewards offers will change over time to strategize how to earn and use any earnings. 

For rates and fees of Blue Cash Preferred® Card from American Express, please click here

Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit for more details. Underwritten by Amex Assurance Company.

*Benefits only available to accounts approved for the Visa Signature card. Terms apply.