OK, so no, I didn’t really like it. I absolutely hate paying annual fees. But I do feel that it was the right call for my particular situation. So, I went ahead and paid $99 in order to keep the card open for another 12 months, at which point I will reevaluate my decision. Here is why I did what I did:
1) At the moment I have around 125,000 points in my Southwest account. This amount can be converted towards $1,250 in Walmart gift cards. You can also use the stash towards airfare on any airline and get 1 cent per point in value. So, basically, Southwest points become semi-flexible currency of sorts.
There is one wrinkle. In order for me to perform the conversion, my Southwest credit card has to be open and in good standing. We were totally slammed with medical bills over the last few months, and while we still have a decent emergency fund, it’s definitely much thinner at the moment.
Having access to Walmart gift cards will help me sleep better at night while I’m trying to save some cash. And that’s worth something, no? I wrote about why those who have limited amount in savings should consider renewing their Premier (not Plus) credit card. Which brings me to my next point…
2) I got 6,000 points for renewing the card, which can be redeemed towards around $90 in Southwest flights (sometimes more). Yes, the fee is $99, so I’m going to lose at least $9. And if I end up redeeming points on gift cards, the loss will be close to $40. But I’m willing to take my chances. In all likelihood, I’ll end up burning the points on flights after all. And if I don’t, well, it’s better to have $1,210 in Walmart gift cards (after we deduct the $40 difference) than nothing at all.
3) I love Chase! Sure, I haven’t been a very good partner over the years, and I admit, I’m definitely the taker in the relationship. But I try to keep Chase happy, or at least not unhappy with me. Paying annual fees now and again helps to accomplish that. Will it get me a pre-approved offer on Chase Sapphire Preferred later this year? It’s hard to say, but it sure won’t hurt.
4) This card is currently not in affiliate network, but I have a personal referral link for this offer. It’s the highest non-targeted bonus available, and I have no problem recommending it. After all, I personally got it, so I must think it’s good, right? Anyway, last year four people signed up for it using my link (thanks whoever you are!) which gave me 20,000 points.
I have no way of knowing whether anyone will use the link going forward, but if I cancel the card, I know for a fact that no one ever will. If you are looking to sign up for this offer, you can find my referral link in Hot Deals page.
Should you renew your Chase Southwest Premier card?
It really depends. If you are in the same spot, it’s definitely something to consider. And you don’t even have to be a blogger to get referral points. Anyone can send an email invitation to friends or family using this link. And points count towards Companion Pass. Even though the annual fee on Southwest cards isn’t waived, the barrier to entry is quite manageable at $2,000 in 3 months. That’s good news for folks who are terrified of high minimum spending requirements. A quick reminder: you only have few days left till hotel points transfers no longer count towards Companion Pass. Don’t delay and initiate transfer now.
However, if you don’t have anyone you can refer and are 99% sure that you will never redeem points on gift cards, it may be best to cancel it. I cancel most Chase cards with an annual fee, and so far they keep approving me for various offers. Well, as long as they don’t fall into 5/24 category.
I definitely don’t think it’s a requirement for being a desirable customer. That said, it doesn’t hurt. Sometimes I wonder if renewing Chase IHG credit card every year works to my advantage. That is one card that (to me) is worth $49 fee and then some. My husband and I each have it, and I recommend it to all my relatives and friends. A true gem. Speaking of..
I’m happy to pay an annual fee on these credit cards
As I’ve said earlier, I’m extremely cheap when it comes to annual fees. They better deliver something, or the cards go on the chopping block. I have never renewed a premium Chase, Citi or Amex card unless there was a retention bonus. Paying an annual fee just for having an access to airline and hotel partners is too rich for my blood. That’s why in August I’ll be saying adios to Chase Sapphire Reserve.
Don’t get me wrong, I love flexible points. But I try to find a workaround, like planning on converting Chase Freedom or Freedom Unlimited to Chase Sapphire Preferred if the need arises. I also try to have a stash of airline miles I’m likely to use in an emergency situation, which is why I’ve applied for Avianca offer. Since my whole family lives in Belarus, flying on Lufthansa is the best option. Plus, Avianca (a Star partner) doesn’t impose fuel surcharges on that airline.
Staying in Hyatt (via UR transfer) to me is not a must, so I simply try to accumulate various hotel points currencies dirt cheap and redeem them when rates are astronomical (as in buy low, sell high).
Other cards besides Chase IHG MasterCard that I renew year after year (for now):
1) US Bank Club Carlson Visa Signature (only in my name)
Not a no-brainer for everyone, but I did the math and decided that it’s worth it for my situation. I feel confident that paying $75 to get 40,000 points is a good deal….for now.
2) Wyndham Visa Signature (in both mine and my husband’s names)
I signed up for this card when it came with 15,000 annual points after paying $69 fee (renewal offer is now only 6,000 points). I immediately thought it was a good deal, so I jumped on it. So far, we’ve used the points at nice beachfront Florida properties during peak season. And I just redeemed 30,000 points for my in-laws’ resort stay in Puerto Rico. I’ll take it for $69 per night all-in. Yes please!
You can read about both cards here. Neither pays us commission.
To recap: I pay $311 in annual fees each year. In exchange, we get two IHG certificates, valid at any IHG property. We also get 30,000 Wyndham points, redeemable at any Wyndham hotel. Finally, my 40,000 Club Carlson points can almost cover three nights at category 2 property (15,000 points per night). However, I will probably use them on beachfront Radisson in Melbourne instead. So, getting five nights at decent Florida beach hotels for $311 all-in isn’t bad at all. And I don’t have to use them consecutively, but can burn them on several weekend getaways.
And that’s it! As you can see, up until now I’ve only renewed cards that gave me hotel points or certificates. Even though hotel rooms aren’t the best fit for family vacations, we make it work. Besides, my husband and I can always utilize them for a couple’s getaway. We live in Florida, so getting good value out of hotel points isn’t too difficult. Well, as long as you are not too picky, which I’m not.
That said, just because I pay annual fees doesn’t mean that renewing these cards is a good deal for your particular situation. If you are on a super duper tight budget, perhaps you should aim at accumulating hotel points strictly through sign-up bonuses.
I’m ruthless when it comes to annual fees, but sometimes it makes sense to pay them. However, I encourage you to be very picky and not let annual fees make your deeply-discounted (on surface) travel quite expensive in reality. Dropping $95 here, $450 there may not seem so terrible now, but it all adds up, especially if you do it year after year.
IMO this is the biggest value eraser in the miles and points hobby and the reason why many are simply fooling themselves into “travel for free” thinking. No, I’m not going to mince words on this one.
Image courtesy of jk1991 at FreeDigitalPhotos.net
Whoa! Did I pay $1,000 in annual fees just for the privilege of transferring points to Hyatt/United/AAdvantage and getting a “free” massage in a Centurion lounge?
Don’t try to keep up with the cool kids. If you are middle-class like me, there is no point in aspiring to travel like “one-percenter” miles and points bloggers. At least not on a regular basis. Apples and oranges, folks. Not that I’m against those who do well financially, I’m simply keeping it real (or trying to).
Readers, what cards do you choose to renew year after year?
Leana is the 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.