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I Paid an Annual Fee on My Chase Southwest Card and I Liked It!

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.

Bottom line

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?

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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.

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24 thoughts on “I Paid an Annual Fee on My Chase Southwest Card and I Liked It!

  1. I agree. This post has me analyzing which cards are “keeper” for me and which aren’t. I think the CSR is a keeper card for me despite the annual fee. I am way over 5/24 and don’t think I’ll be getting the CSP any time soon. I am not comfortable applying for “business” cards, so Ink is out. Plus the $300 travel credit lessons the blow of the annual fee as well as the 1.5X redemption. So at least for the foreseeable future I will be keeping it past October when the fee renews. I will also be paying the $95 fee for the Fairmont card for obvious reasons. That will be cancelled in 2019.

    Amex cards including platinum, prg, and green are on the chopping block. I won’t be paying annual fees for them. Also on the block is the Barclay arrival plus. That will be closed once I redeem my 500.00 miles.

    • @Natasha I definitely think renewing CSR is worth it for some. A couple of suggestions:

      1) Determine if you’ll need Priority Pass lounge access. This is a very nice perk, but only if you utilize it. Lounges can be hard to get to sometimes, and trekking to a different terminal just to use it isn’t very convenient and defeats the purpose of relaxing during layover.

      2) Determine the scale at which you can reasonably accumulate UR points. Keep in mind, you can get 1.25 cents on travel via CSP. If you redeem a lot of points, extra 0.25% percentage bump may be worth it. Otherwise, converting CSR to CSP may be the way to go.

      3) This goes along with my previous point. Do you currently have a large stash of UR points? If so, renewing CSR may be best.

      4) Can you utilize the $300 annual allowance easily? Make sure that you won’t be just spending money because you have the credit, because it will defeat the purpose of having it.

      Anyway, not telling you what to do, but simply giving you some food for thought. CSR is actually a very good card for many, but it’s not a no-brainer. I should probably do another post on the topic.

      • Thanks for the points. Love to see another post on that! I may downgrade because I think the 1st year fee will be waived, plus I can add hubby to card without that $75 fee, and then transfer to his accounts.

      • @Lynn I’ll try to get a post out this week or next. If you downgrade to CSP, they will probably charge $95 upfront upon conversion, so that’s something to consider. If you apply for new CSP account, then the fee is waived the first year.
        It’s not a clear cut decision as to whether CSP is better than CSR in the long run. Everyone will have a different answer to that. I wouldn’t renew either, but I’m cheap. I know most people love to have access to transferrable UR points, and I can certainly understand that. I love UR points too!

      • PP will be utilized by us but only twice a year, at most. I have about 66,000 UR right now, so a decent stash. I can absolutely use the $300 travel credit. We have to book a hotel pre cruise and I also need a rental car.

    • @Bonnie Interesting. Hmm, I’ve heard of them mailing out drink coupons to cardholders, but I haven’t gotten any so far. We’ll see. That would be sweet and indeed cover my $9 deficit!

  2. This is what I’m renewing this year: Hyatt (mine), IHG (mine), SPG Amex (hubby), and CSR (will most likely renew – mine — or downgrade to CSP — we’ll see). I’m hoping to get hubby the Hyatt in a few weeks (which now has an annual fee), but we’ll be cancelling Barclaycard Arrival and 2 JetBlue Plus cards early next year. We may be adding a few more cards to the pile as they don’t waive the annual fee.

    • @Stephanie I would definitely renew Hyatt card if I still had it. At $75 it’s a good deal for most people. I sacrificed it last year in order to improve my chances at CSR approval. Not sure if it actually helped, but I’d like to think it did! 🙂
      Jet Blue is an interesting card. I think it’s worth renewing, but only for folks who regularly fly Jet Blue. As you no doubt know, it has some nice perks: 10% off redemptions and free checked bags, plus 5,000 bonus points upon renewal. So, if you have even one Jet Blue flight coming up in the future, it might be worth hanging onto the card. Also, Barclays is good about giving retention bonuses on co-branded products. Might be worth a shot.
      Of course, if you cancel, you can try signing up for it again. #Winning!

  3. I didn’t know you needed to have the Southwest card in order to use points for walmart gift cards. I do cancel the IHG every 2 years in order to reapply again since not under 5/24.

    • @Lynn Southwest used to allow anyone to redeem points on gift cards (during certain promotional periods), but not anymore. Now you have to have a co-branded credit card.
      As to canceling IHG card every few years, it definitely makes sense. I’m just scared that I’ll do it and then it will fall under 5/24 umbrella within few days. Ha! That card is very valuable to me due to perks and renewal cert, so I’m willing to forego the bonus.

      • Right, don’t want to get caught with the card falling under 5/24 rule!! I cancelled about 3 weeks ago and sweating it until next week!!. I’m figured I should let a month pass between applications. I did do the same thing with the Hyatt cards, for hubby and myself, and it worked. I did have a friend cancel her chase sapphire card without a backup and she got caught with the 5/24 rule before she could reapply in 2 years. Needless to say, she’s not happy with chase.

      • @Lynn I’m sure you’ll be just fine. In all likelihood, if it’s not under 5/24 by now, it probably won’t be. But you never know with these things! Oh, and make sure to try to match to 80K points over Chase SM in your online profile.

  4. I renew our two Hyatts and two IHG every year. They are definitely keepers. I haven’t decided on the CSR and CSP yet. I guess I’ll see how many points I have when the renewal time is up and choose one or maybe transfer everything to the Chase Freedom if there’s only a few left. I’m still on the fence about the SW card. I need to make up my mind on that one. It’s probably on the chopping block though because I have flights in mind for my points and don’t plan on cashing them out.

    • @Jennifer I approve! 🙂 If you haven’t yet gotten CSP, it’s probably best to apply for it so you can get the bonus. Well, as long as you are under 5/24 or get pre-approved in branch. When you convert CSR, you don’t get any bonus.
      Unless you have a ton of UR points or fly often, renewing CSR probably doesn’t make sense. I know many would disagree, I just think the fee is too enormous (yuuge!) for a normal person who flies once or twice per year. It’s a good card, but it’s not for everyone. I’ll have a post on it soon.

  5. Did you call in to see if Chase had any renewal offers? I think I read on flyertalk about someone getting an offer for a southwest card recently.

    This week I called amex about my SPG card that was up for renewal and I told them I was unsure if the SPG card was worth it for me to renew. The rep tried to talk me out of cancelling and offered me a $25 credit. I told her the $25 credit was not enough for me to justify paying the $95 fee. Then the rep told me that she had another offer for me that was better- if I kept the card and paid the $95 fee I would be awarded 10,000 starpoints (6-8 weeks for the points to show up). I took that offer and paid the annual fee!

    Annual fees are complex. I try not to keep many cards with them. IHG card is definitely worth the fee for us so we each keep an IHG card (but only use it about once a year at an IHG hotel). I have always had one UR transfer card in our family(before 5/24 we would get one CSP every two years and usually cancel at renewal time) I think now we will keep one CSR card and move UR points to that account. I have been holding onto a Flexperks visa for years for a $49 or 3500 points a year fee waiting to use my points on $400 airfares to get max value… probably not smart… but I have 76k points so I just need to get to 80k in points, find 4 $400 flights, then travel and buy things that day to get 4 $25 credits. 😛 I used to keep the Club Carlson card but after the program changes I cancelled it. We paid the fee for my husband’s Citibank AA card (the $89 one) once only because he hates to call and kept telling me he would call later until it was already paid and way too late for a refund or offer. You win some you lose some! 😀

    • I didn’t call Chase, though maybe I should have. In general, if I get renewal points, I just pay the darn fee. I try not to be too obnoxious! I got carried away with my Amex Platinum, and paid dearly for it.
      That was one sweet offer on SPG card. I would be all over it, for sure. Buying SPG points for less than penny each? Sign me up.
      I’ve had Flexperks card a few times, but usually cancel before the fee hits. Though I totally understand why you would want to hang on to the card. Maximizing points can be tricky. I redeem them on my parents’ tickets and try not to be too picky. As in, I burned 40K points on $640 ticket. Not ideal, but close enough. I actually plan to do a post on it soon.
      I totally understand why you got rid of Club Carlson card. It’s not for everyone. I hesitated on whether to keep it or not, and decided that the price of points is cheap enough to stock up. It’s a mediocre hotel program, but there are a few gems here and there.

  6. @Anonymous….holy moly 10,000 Starpoints….I’m definitely making my hubby call them come renewal time. Thanks for the info.

  7. Pingback: "Renew Vs. Downgrade CSR" Guide for an Average Joe - Miles For Family

  8. I also just called in to cancel my SPG personal card and they offered me 10k points or $100 credit to cover the fee. I took the points and paid the fee. The whole call took less than 5 minutes.

    • @Jeremy That’s fantastic! My guess is they are doing it due to Marriott takeover. Reps are authorized to try to keep customers at all cost. Take the points and run!

  9. I’m very new to the credit card game but we currently have a Southwest Premier and Southwest business cards, $99 fee each with a 6,000 point anniversary bonus. For now we’re using the cards but may cancel someday.

    My question is how do I know when to cancel? It looks like the annual fee was charged on June 1 – will that be the same every year and if I do decide to cancel, should we do it next year just prior to June 1? Or is there better ways to go about this?

    Thanks

    • @Lee the annual fees will show up each year around the same time as your anniversary with that particular card. With Chase, you can still cancel the card within 30 days of the annual fee posting and still get a refund of that fee. I just did this with my British Airways card, because I didn’t get around to closing it before the annual fee posted.

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