Premium credit cards are often marketed as the ultimate tool for travelers, packed with perks like access to the airport VIP loungetravel credits, elite status and high earning rates. but with annual fees which can reach almost $900, many people wonder: Are these cards really worth the cost?
The truth is that these cards can offer tremendous value or end up costing you more than they are worth. It all depends on your travel habits, spending patterns, and how much you’ll take advantage of what’s on offer.
Here’s how to tell if a premium card deserves a spot in your wallet.
Related: Premium Credit Cards vs. Mid-Tier Credit Cards: Which Should You Get?
What are premium credit cards?
Before we delve into the details, let’s take a moment to understand what determines a credit card premium.
Premium credit cards represent the top tier of the rewards card ecosystem. These high-end cards typically come with high annual fees ($395 to nearly $900), but they also offer an impressive array of perks. Think: access to the airport VIP loungeelite hotel or airline status, generous statement credits, enhanced travel protections and accelerated points attainment.
They are designed for frequent travelers and big spenders who can maximize the value of benefits. But premium doesn’t mean one size fits all; What is valuable to one cardholder may not be valuable to another.
Some of the most popular premium credit cards on the market include:
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When a premium credit card is worth the annual fee
When are premium credit cards worth paying the fee for? Here are some signs that a premium credit card might belong in your wallet.
You will use statement credits
Many premium cards make it surprisingly easy to offset most (if not all) of your annual fee through statement credits only. But these credits only have value if you actually use them.
For example, the Chase Sapphire Reserve offers up to $300 annual travel credit That automatically applies to a wide range of purchases, from airfare and hotels to parking and tolls.
He Amex Platinum goes even further, offering a large number of creditsincluding airfare creditsmonthly Uber Cash and statement credits for digital entertainment subscriptions.
If those credits match your lifestyle, your annual fee could easily pay for itself. But if you don’t use them (for example, you rarely use ride-hailing services or don’t stay in hotels often), the value quickly disappears.
Consider access to airport lounges and travel benefits
For many travelers, just access to the airport lounge may make a premium card worth keeping. He Amex Platinum offers the most complete access to previous cards, including Centurion Rooms, Delta Sky Clubs (when flying Delta) and Priority Pass Lounges (registration required).
He Citi/AA Executive World Elite Mastercard and United Club Card Both have unlimited access to their respective airline lounges, which is a big plus if you fly regularly. american airlines either united airlines.
If you’re someone who spends hours in airports each month, these benefits can easily outweigh the annual fee. However, if you only travel once or twice a year, it might be wiser to opt for a lower level. travel rewards cardlike him Citi Strata Premier® Card (see rates and fees) instead.
Related: Is Amex Platinum worth the annual fee?
You care about elite status and upgrades.
Premium cards usually offer elite status with partner airlines or hotels, which is a benefit that can further enhance your travel experience.
For example, the Hilton Honors aspires includes courtesy Hilton Diamond Statusoffering complimentary breakfast, room upgrades and late check-out (subject to availability). He Marriott Bonvoy Brilliant automatically grants Platinum Elite Status (and a path to higher levels through spending).
Meanwhile, cousin co-branded airline cards like him Citi/AA Executive World Elite Mastercard and the Delta Reserve Help you spend to achieve status and move up the upgrade list.
If you fly or stay in hotels regularly, these benefits can generate hundreds (or even thousands) of dollars in added value each year.
Related: Marriott Elite Status: What It Is and How to Get It
You can maximize earning and redeeming points.
Premium cards tend to offer higher earning rates and more flexible redemption options than lower tier travel rewards cards. He Sapphire ReserveFor example, earn 3 points per dollar on dining and 8 points per dollar on Chase Travel℠ reservations.
Meanwhile, Amex Platinum Cardholders earn 5 points per dollar on flights booked directly with airlines or through American Express® Travel (up to $500,000 per calendar year, then 1 point per dollar), which is a high rate of return for frequent travelers.
If you are strategic about earning and redeeming points at transfer them to partner airlines or hotels or use them to high value travel redemptionsyou can easily justify the annual fee.
For example, Chase Ultimate Rewards points can be transferred to programs like Air France-KLM Flying Blue and Hyatt Worldwhere they can unlock much more value than a simple cash back redemption.
This is especially true when a transfer bonus is at stake. I recently took advantage of a 25% transfer bonus when booking a flight to Paris. The flight cost 18,750 Flying Blue miles, but thanks to the bonus I only had to transfer 15,000 Chase points to cover it.
Be strategic about how you earn and redeem points expand your rewards even further (and helps offset the annual fee).
Related: How to Maximize Earnings with the Chase Sapphire Reserve
When a premium credit card isn’t worth the annual fee
Premium credit cards come packed with perks, but those perks only matter if you actually use them. For some cardholders, the high annual fee simply doesn’t make sense based on their spending or travel habits.
Here are some signs that a premium credit card might not be right for you.
You will not use travel benefits.
After all, premium cards are designed for people who travel and travel frequently. If your lifestyle doesn’t include scheduled flights, hotel stays or time in airports, many of these benefits will go unused.
You’ll probably be better off with a mid-tier travel card that still earns points but has a lower annual fee, like the Chase Sapphire Preferred® Card (see rates and fees) – one of our favorites travel cards for beginners here at TPG, and one of the best cards in my wallet.
Related: best credit cards
You don’t want to pay a high annual fee
Annual fees for premium cards run into the hundreds of dollars (and potentially soon in the thousands). Those fees may be worth it if you can maximize credits, lounge access, and transfer partners, but if you don’t, the math may not add up.
If you want to keep your costs down, a no-annual-fee card like the Citi Double Cash® Card (see rates and fees) may be a better option.
Related: The best credit cards with no annual fee
You prefer simpler rewards
Premium cards often come with complex benefits, earning structures, and redemption options that can be overwhelming if you’re unfamiliar with the world of points and miles. If that sounds familiar, a premium card may not be the best option, although there are some exceptions.
For example, the Capital One Venture offers one of the easiest earning structures, earning at least 2 miles per dollar on every purchase and 5 to 10 miles per dollar spent on travel booked through The Capital One travel booking site. You’ll still enjoy premium benefits like airport lounge access and travel protections without the need to memorize bonus categories or monthly credits.
However, if you prefer to skip the premium tier and annual fees entirely, the Chase Unlimited Freedom® (see rates and fees) is a good option as you get at least 1.5% cash back on every purchase.
Related: The Best Cash Back Credit Cards to Add to Your Wallet
You don’t want to track multiple benefits
Between monthly credits, hall access rulesbonus categories and elite status requirements, maxing out a premium card takes some effort. If you don’t want to track expiring credits or jump through hoops to activate benefits, you may not get the full value of a premium card.
Instead, you can try a simple card like Wells Fargo Active Cash® Card (see rates and fees), which has no rotating categories or travel credits to remember.
Related: The best first credit cards for beginners.
In a nutshell
Premium credit cards can be absolutely worth the annual fee, but only if you take advantage of what they offer. Frequent travelers Those who use statement credits, enjoy lounge access, and maximize reward redemptions will easily win.
If those benefits align with your spending habits, a premium card like the Amex Platinum, Chase Sapphire Reserve either Hilton aspires It can pay for itself year after year. But if you’re not likely to use the benefits, consider a lowest rate option and save your money for your next trip.
Related: Best Premium Credit Cards: A Side-by-Side Comparison
