7 Credit Card Perks that Justify the Annual Fee

Kat Tretina

August 20, 2019  •  3 Minute Read

Credit Cards

When you’re shopping for a new credit card, you probably look at things like APR, rewards, and fees. But if you’ve been turning down cards because they charge an annual fee, you may want to think again. While annual fees can be a pain — and there are many no-annual fee cards out there — they can actually be well worth the cost. If you use the card wisely, you can even make the card pay for itself.

Here are seven different credit card perks that can justify the annual fee.

1. Travel statement credit

If you take at least one trip a year, you can benefit from a travel statement credit. Several credit cards give annual credits to reimburse you for travel expenses. For example, the Chase Sapphire Reserve® gives you an Annual Travel Credit of $300 as reimbursement for travel purchases charged to your card each account anniversary year. Earn 5x total points on flights and 10x total points on hotels and car rentals when you purchase travel through Chase Travel℠ immediately after the first $300 is spent on travel purchases annually. Earn 3x points on other travel and dining & 1 point per $1 spent on all other purchases.

2. Global Entry or TSA PreCheck® credit

If you can’t stand airport security, consider signing up for Global Entry or TSA PreCheck®. You’ll get access to an expedited security line, and you can keep your shoes on and your laptop and liquids in your carry on.

Select credit cards will even reimburse you for the application fee. With the Capital One Venture Rewards Credit Card, receive up to a $120 credit for Global Entry or TSA PreCheck®.

*Information for this card is not reviewed by or provided by Capital One

3. Primary car rental insurance

When you rent a car, you’ll likely face a pushy salesperson who will try to convince you to add a rental car insurance policy to your reservation. Doing so can be costly. According to esurance, a collision damage waiver can cost between $9 and $19 a day.

Luckily, you can get free rental car insurance with some credit cards. Many credit cards offer primary auto collision damage waivers, which kicks in before your personal car insurance does. On a five-day trip, having free rental car insurance could help you save up to $95.

4. Airport lounge access

If you’re sick of the crowds at the airport, look for a card that offers airport lounge access. You’ll wait for your flight in a quiet, relaxed atmosphere. And, you’ll be able to enjoy complimentary food and drinks and even high speed internet access.

For example, the Mastercard® Black Card™ gives you enrollment in Priority Pass™ Select with access to 1,500+ airport lounges worldwide with no guest or lounge limits. Includes credits at select airport restaurants for cardholder and one guest.

If you were to buy Priority Pass Select membership on your own, you’d have to spend $495 for the same access.

Earn one point for every one dollar spent. Terms and conditions apply.

5. Free checked bags

Checked bags can greatly add to your travel costs. While you could just shove everything into a carry-on, there may be a better way; some credit cards give you free checked bags.

For example, the United Explorer card allows you and one traveling companion to check your first bag for free. According to United Airlines, a checked bag typically costs $30 for the first bag each way, so you could save up to $120 per round-trip for two people.

6. Companion passes

If you regularly travel with someone — like a spouse or best friend — using a credit card can help you score a companion pass. If you spend a certain amount within a calendar year, your friend or partner can get free roundtrip airfare.

7. Free hotel stays

Many travel rewards cards offer free hotel stays. As a cardmember, you may be able to get a free weekend night stay at a hotel of your choice. Depending on what resort you choose, that free night can be worth hundreds of dollars.

Annual fees are increasingly common. While it’s a good idea to pay attention to annual fees before applying for a card, the presence of one shouldn’t be the reason why you disqualify a card. In some cases, a card might offer significant benefits and perks that more than offset the annual fee, making it worthwhile.

Looking for a new credit card? Check out our favorite travel rewards credit cards for 2019.