Why I pay credit card annual fees with a smile….sometimes

Back in February I was faced with a series of decisions.  Five credit cards were sitting in my wallet and every single one of them was due for an annual fee.  This was the big app-o-rama that I did last year.  Here are the cards that were coming up for renewal

  • US Airways- $89
  • Club Carlson- $85
  • Priority Club- $49
  • Delta Gold- $95
  • Citi AA- $85

What was the carrot dangling?

Ouch.  Paying the massive $403 annual fee for all of these cards was a tough pill to swallow, but some of them offered great benefits to keep the cards.  Here was the carrot dangling for each card:

  • US Airways- 12,500 Dividend Miles
  • Club Carlson- 40,000 Gold Points & Last Night Free Promotion
  • Priority Club- Free Night
  • Delta Gold- Nothing
  • Citi AA- A Statement credit (tomoto, tomato) to offset the annual fee plus put $10 in my pocket

What did I decide to do with each card?

  • US Airways-  I kept this card.  I can get a flight in the US for 20,000 points.  Essentially they were willing to offer me over 1/2 of a flight within the US for $89.  If there is one card that I kept, and regret the decision it was this one.
  • Club Carlson- I kept this card too.  I love this card, and the last night free promotion is incredible when you stay in 2 night increments at hotels.  Invaluable.  Plus the 40,000 points is worth over 4 nights at a category 2 hotel when used properly.
  • Priority Club- Kept this card.  $49 is a small annual fee, and it has already paid itself off.  We did a quick road trip to Zion National Park this last weekend and ended up using the free night already.  We were basically willing to stay at this Holiday Inn Express in Cedar City because the kids were sick of driving and so were we.  It had a price tag of $120 per night, but we were willing to do it when I remembered that I had this free night.  A quick call to the IHG Rewards desk and the hotel was booked.  It saved me $70!
  • Delta Gold-  Dropped this thing like an ugly girlfriend.  Trying to charge me $95 for a card that offers very little benefits to keep the thing, psshaw, yeah right, when monkeys fly out of my butt.
  • Citi AA-  Kept it.  When they pay me $10 to keep it net of the statement credit, how do I resist?

In the end how much did I pay?

  • $308 to keep four of these cards
  • -$95 Statement Credit
  • -$70 Savings on the Holiday Inn Express
  • $143 Total paid to this point

Yeah.  Paying $143 in fees sucks.  In return I’ve still got:

  • 12,500 Dividend Miles
  • 40,000 Club Carlson Gold Points

Other thoughts about paying credit card annual fees

If I would have gone with my instinct to cancel the US Airways credit card, I would have only been paying $54 to keep three cards alive for another year, which would be hard to resist.  Keeping up the fees on all of the cards won’t make sense every year.  You need to assess whether or not you’re going to be using the benefits of the card enough to outweigh the costs of the annual fee.

The Priority Club card is going to be difficult for me to cancel indefinitely.  Finding a nice hotel in the Priority Club family for under $50 would be a miracle.  You know that you’ll find the value in that card, so it seems like I’ll be keeping it for quite a while.  Plus the longer that I keep the card, it benefits my credit score, so that’s not a big deal to me.

Keeping the Delta Gold card wasn’t really an option.  They offer a free checked bag on their flights that are within the USA, but paying $95 isn’t worth it to me.  They really don’t offer much else, and didn’t budge on the annual fee when I called, so paying the credit card annual fee wouldn’t have made me smile.

The Club Carlson card is awesome.  The last night free promotion makes the card definitely worth it’s salt.  You’ve got to use it at least once a year and it is a card that I will pay the annual fee on because it is worth it!

The Citi AA card is churnable every 18 months.  I’ll probably want to drop it soon as I’m approaching my 18th month and want to pick up another 50k AA miles.

The US Airways card will definitely be dropped next year.  As US Airways and AA come closer to merging it won’t be of much use.  Especially if Citi continues to waive annual fees.

What are your thought on paying credit card annual fees?

These are my thoughts on my cards that were up for renewal this year. What do you think when you have to pay an annual fee on a credit card?   Which cards are worth their fees in your opinion?

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3 Responses to Why I pay credit card annual fees with a smile….sometimes

  1. Ken says:

    Are you sure you didn’t receive 10,000 anniversary points for your US Air card? There was never a 12,500 anniversary bonus for that card, it has always been 10k points.

    Also, usually you get the points before the AF hits, so if you feel comfortable doing it you can cancel the card after the points are in your US Air account but before the AF hits. Plus you can try to get the card again in a few months, though Barclays has been really stingy lately with approvals.

    • Sheldon says:

      Ken, yeah I’m sure it was 12,500. I called them up and told them I was going to cancel it. They passed me over to the big boss and I somehow managed to get an additional 2500 miles out of her as long as I was able to spend $500 on the card.

      That made me happy that I got more miles out of it, but still a tough decision for me.

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