Best Credit Cards

When is an Annual Fee Worth it For Most Regular Families?

Nope, Chase Sapphire Preferred is NOT on the list. This topic comes up quite frequently on blogs in the industry. Usually, though, many cards that make the cut have lounge access and other perks I couldn’t care less about.

I’ve said many times that low spenders and infrequent travelers should be very picky when renewing credit cards with an annual fee.   I personally only pay it when I get something upfront to offset it. It can be a  hotel night, a rebate in miles and so on. This list is tailored to families who participate in this hobby to a certain degree.

So, here are some cards, where in my opinion, the fee could easily pay for itself:

1) Chase IHG Mastercard Currently, it comes with 60,000 points sign-up bonus after spending $1,000  in 3 months.   I’ve said before that I will never cancel this card. For a $49  renewal fee, I get a free night anywhere in the IHG chain. We live in Florida and can use it at any beachfront Holiday Inn or Crowne Plaza. I have my eye on using it in Tahiti someday. I hope they don’t cap the redemption category.

2) Citi AAdvantage Visa Pays me  commission. The renewal fee is $95. You get a rebate of 10 percent on your miles with each redemption on up to 100,000 miles per year.  So, the maximum you’ll get back is 10,000 miles. IMO, it’s only worth it if you have a large redemption in mind or have some AA flights coming up. That’s because you can check your bags for free as a cardholder, as long as you pay for your flights (or taxes on award flights) with AAdvantage Visa.

The same principle applies for other airline co-branded cards, because most give the perk of free checked bags on that specific carrier. So, always take your future travel plans into consideration when debating on whether to keep a specific card.

Otherwise, it makes more sense to cancel Citi AAdvantage Visa after getting the sign-up bonus. You’ll usually qualify for  it every 18 months after closing the card, but you never know with Citi bank. It’s like a box of chocolates, and not in a good way.

3) US Bank Club Carlson Signature Visa This card  gives 40,000 points after paying a $75  annual fee each year. That amount is almost enough to cover a 1-night stay in  an oceanfront room at Raddisson Melbourne in Florida. Thats’a  pretty good deal in peak season when rates hover around $175 per night.

The redemption currently runs at 44,000 points per night. You would only need to put $800 in spending on that card to get the remaining 4,000 points, since you earn 5 points per dollar.

This card is no longer a no-brainer after the demise of BOGO benefit, but in my opinion, still a keeper.

4) American Express Blue Cash Preferred Worth it if you prefer cash back and have some non-bonus spending. It could also work if you don’t mind doing some manufactured spending by buying Visa gift cards at a grocery store. I have covered this card many times before and consider it one of my top “keeper” choices for a middle-class family.

It gives 6 percent cash back on groceries on up to $6,000 per year, 3 percent back on gas and department stores and 1 percent back on everything else. The card comes with an annual fee of $75, but it’s worth it for groceries’ bonus alone. Plus, you will likely make up for it through various Amex promotions.

Honorable mentions:

1) Amex Everyday Preferred  A bit of a tough call for “bonus chasers” like myself. You would get 4.5  Membership Rewards points on groceries, but would have to make sure you hit 30 transactions in a month. Plus, the annual fee is $95. It probably would be worth it for most “normal” families who don’t get 15 new cards per year like I do.

2) Chase Hyatt Visa  The annual fee is $75  and it comes with a “free” night at a category 1-4 Hyatt. It would be a bit of a tough call to make, though. That’s  because it would occupy a permanent spot in my Chase portfolio and may make it more difficult to get approved for other bonuses from that bank.

Still, $75 (tax included) for a room at a Hyatt is tough to beat. I like to pick on Hyatt occasionally, but only because I don’t consider it the best Ultimate Rewards transfer choice for most regular families. Otherwise, it’s a good hotel chain that excels in many respects, specifically in customer service.

Well, I think that’s it. I’m curious to know which cards you consider to be “no-brainers” when it comes to renewal time. As I said, I am very picky about annual  fees, but I will pay them, especially if I have a shot at a room in Intercontinental Thalasso  in Tahiti with my Chase IHG Visa. Darn it,  I’m gonna get that overwater bungalow for a $49 renewal fee.

Hey, all of us “riff raff” family points bloggers should have a DO in Bora Bora!  I’m thinking specifically, the guys from Miles4More and Pointswithacrew. The last one will need 3 bungalows to accommodate his crew. We’ll be on the patio eating ramen noodles and sipping beer (naturally, brought in a suitcase from  US), overlooking a sunset over mount Otemanu. Who is in?

P.S. Speaking of an actual Family Travel Seminar organized by The Deal Mommy, you can find more info and the list of speakers HERE

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Author: Leana

Leana is the owner and founder of Miles For Family. She enjoys beach vacations and visiting her family in Europe. Originally from Belarus, Leana resides in central Florida with her husband and two children.

23 thoughts on “When is an Annual Fee Worth it For Most Regular Families?

  1. Great topic and post. For us, Ink cards from Chase are worth keeping and paying the fee on. It just takes one or two timely gift card purchases from an office supply store to cover the fee, and the ability to MS as needed for 5X is awesome. We have an IHG that is just over a year old but I just realized the other day that we have no actual use for the free night. We’ll probably use it for New Years eve or something and have some fun with it, but it won’t save us a dime. I am batting 100% on like 11 AA platinum cards’ fee waivers or credits over the past 2 years.
    I can just see our 3 families trying to get 16 award seats on the same flight to PPT…

      • Kenny BSAT, thanks for stopping by and sorry about WordPress. I deleted the first comment, as requested. I understand your feeling on Ink card. It is a very good choice in many respects. However, it is a business card and I try to stick to only personal cards. But you do make a valid point.
        As far as IHG certificates, it is a case of YMMV We live in Florida, where beachfront hotels can go for $300 per night in high season. So, for me it’s a total no-brainer, even if I never get to use it in Bora Bora. Just shows you how each family is unique. Hard to pinpoint best value for everyone.
        On unrelated note, I almost included git-r-done meme, and was afraid it would offend you. Then I see your post today and kicking myself! 🙂

  2. I am extremely difficult to offend 😉 Another card that could be worth paying the fee on, like I wrote about the other day, is the United card for the additional award space it gives.

    • Kenny, very true. I don’t use United very much, and focus on Oneworld Alliance. But yes, once again, a good example of how there is no “one size fits all” in this hobby.

  3. Interesting…. I’m into this hobby only casually (and travel with two young kids) and I’m DEFINITELY keeping my Chase Sapphire Preferred. The ability to transfer points to top of family member accounts to a number of hotels or airlines is invaluable and allows us a lot of flexibility. We have a reasonable amount of travel and dining out expenses, where double (actually, 2.14x) points rock. Different strokes for different folks! 😉 The other card we use a lot as a family is the old version of the Amex Blue Cash (no annual fee, 5% on gas/grocery/drug stores after minimum annual spend). As long as Amex keeps us grandfathered in under the old program, we will keep the card forever!

    • @Tripswithtykes Thank you so much for your comment! Ahh, the Chase Sapphire Preferred… My arch nemesis! 🙂 It has sort of become a running joke/obsession on my blog.
      Honestly, the point I always stress, is that there is no right or wrong answer, and no perfect card. For some CSP is great, and I admit, it has a lot of solid benefits. However, I still think for most low spenders it’s not an optimal choice. If the fee was lower or gave access to some sort of promotions, I would fall in love with it myself.
      As far as old Amex, it’s absolutely a great choice, especially if you do m/s. I couldn’t get the application to work, so I don’t focus on it extensively, but plan to mention it in my next week’s post.

  4. Hey I think 2 bungalows would probably be enough – the 6 kids aren’t picky about sleeping on the floor :-P. Though I think that I would be terrified to have them in an overwater bungalow – too many worries about someone accidentally falling in or something. So, come to think of it, I think I’ll just leave them home and then we’ll only need ONE bungalow!!!

    As for your original point, I totally agree – it is very rare for me to pay an annual fee. In fact, I just canceled my SPG Amex card – the $65 annual fee wasn’t worth it.

    Another one that I think might be would be the Southwest cards (personal and business). Those have annual fees that aren’t waived the first year but $69 is a good deal for 50,000 points. You do get I think 6,000 points on renewal but I’m not sure if that would be worth it or not.

    Definitely agree on the Club Carlson card and the Hyatt. The CC card is just so good with the 2nd night free deal that you almost have to have it or you’re paying twice the points with every redemption.

    • @Points with a Crew I was wondering when you would show up! Yes, doing Tahiti trip as a couple would be best.
      As far as Southwest card, it’s totally worth the annual fee because of the bonus. I was referring to renewal time. The 6,000 points might be worth it for some, but probably not to me. I don’t like to prepay my trips, and that’s essentially what you are doing.

      It sort of manipulates you into using that particular currency. Basically : Might as well fly Southwest, after all, I just paid $99 to get the points. That’s the problem with annual fees: They change your behavior patterns, and you don’t even realize it. I still think Chase IHG and Club Carlson Visa are keepers…for now.
      As far as Amex SPG, I will probably cancel it or convert to Amex Everyday with no annual fee.

    • Hey, Nick! It’s not that I don’t like Hyatt for family. It’s a fine hotel chain, no doubt. My point is, most regular families who don’t swim in Ultimate Rewards, need to think twice before transferring to Gold Passport.
      The redemption starts at 5,000 points per night for their most basic properties (many cost much more). That’s $83 in Southwest “wanna get away fare” or 1 flight from Miami-Grand Cayman through BA Avios. Most families would do better utilizing Club Carlson or IHG points, that can be earned fairly easily, and save Ultimate Rewards for flights. Once again, I’m talking normal families like yours or mine, not frequent travelers.
      However, I should have clarified my point in the post. Thanks for bringing it up!

  5. @Nick, I look forward to hearing more about it. Like I said, I’ve got nothing against Hyatts, I promise! 🙂 Mostly, I’m just cheap and prefer to use IHG points for Pointbreaks hotels.

  6. Hello,
    Longtime follower but first time commenter here. I just wanted to let you know how much I appreciate your site…your advice is honest and very beneficial to a middle class family. I am a single mom and currently have two of the keeper cards you mentioned (Amex Blue Cash Preferred and Chase IHG Mastercard) and find them both to be invaluable for individuals/families who are trying to earn rewards for modest monthly spend. You are one of the only bloggers I’ve found who keeps it realistic with regards to the best deals for families – keep up the great work and thank you!

    • @Jennifer Thank you so much! You have no idea how much this means to me. This blog has truly been a labor of love. Sometimes I wonder if I should even keep going, it takes so much energy and time. I also got sidetracked quite a few times, but am trying to stick to my message. Thanks and please, comment again!

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