The Truth About Annual Fees

“Why would you pay for a credit card?” is one of the most common questions I get - and it’s a fair one. But here’s the truth: a high annual fee isn’t automatically a red flag. Sometimes it’s actually where the value is.

Here’s how to think about it. A card with a $95 annual fee and no real benefits is a bad deal. But a card with a $550 annual fee that includes a $300 travel credit, airport lounge access, and elevated earning on travel and dining? That fee can pay for itself before you even use the card for a single purchase.

The question isn’t “does this card have a fee?” It’s, “will I actually use enough of what this card offers to make the fee worth it?” If a card gives you $400+ in credits and perks you’ll genuinely use, a $300 fee isn’t a cost - it’s a discount.

This is also why I don’t recommend closing every card the moment the annual fee posts. Sometimes downgrading to a no-fee version of the same card makes more sense than canceling outright, and sometimes the benefits are worth keeping the fee altogether.

Key Takeaway:
Don’t judge a card by its fee alone - judge it by what you get back for paying it. A $0 annual fee card and a $550 fee card can both be “good” or “bad” depending on how you use them.