Annual fee Credit Cards – worth it?
I have had a few co-workers ask me about this lately and I thought I would say a little something about it today.
First of all, Rewards Canada has a chart that has the top Canadian Credit Cards ranked by his readers and this is my “go to” chart when I need to know something quick. Here is the link
So…is it worth it? In my opinion the credit card companies are usually giving you some “bonus” to get their card, so in most cases I say yes!
Let’s take his top 5 and do a quick cost/bonus breakdown.
1. Capital one Aspire. This one has a $120 fee and you get a $350 travel credit. Net gain $230
2. BMO World Elite. This one has a $150 fee and you get a $300 travel credit. Net gain $150
3. Scotiabank Gold Amex. This one has a $99 fee and you get $300 travel credit. Net gain $201
4. TD First Class Visa. This one has a $120 fee and you get a $100 travel credit. Net loss $20
5. CIBC Adventura Visa. This one has a $120 fee and you get a max $400 short haul flight. Net gain of anywhere between $180-$280.
Now those are “travel points” cards, there are other “hybrid” cards as well as you can see from his list.
There are many, many other factors to consider with these cards such as insurance coverage, points earned per card, etc but I am just talking initial bonus.
His website is very thorough and I have always gone to his site when it comes to credit card information. He has been doing this over a decade and is very knowledgeable.
So, the first one with the “highest” for sure gain of $230 – is that worth it to you?
This card (Capital One Aspire) was my first travel credit card 4 years ago and I thought this was the best deal ever at the time. Well, think about it. They do pretty much “give you” $230 to use their card once.
If I was just learning this “game” I would get this card. It is straightforward, you get your points fairly quickly and then you can use the “purchase eraser” I believe it was called to “erase” a travel purchase up to $350.
Give it some thought – there are many cards out there with an annual fee that does not get waived but gives you a great sign up bonus.
Hotel credit cards also do this and the way I see it, you are just “prepaying” for travel.
We have done a few posts on hotel credit cards that are great deals and may include an annual fee – the IHG Mastercard comes to mind – 60,000 points for a $120 fee. Those points are worth at least $420 so you are up at least $300 right away.
My favourite one is the Amex Starwood Card – but the 21,000 bonus is not on right now – it is currently just 10,000 points. When that comes back I will be getting a post out right away.
That card has a $120 fee but you can easily get about $1000 in hotel stays if you stay in Class 2 hotels in the Starwood Chain (3000 poins/night times 7 nights = 21,000 points for $120!)
I’ll conclude by saying probably one of the best deals out there is the Amex Platinum Card, but you need to read why on our Amex page. The math doesn’t lie and that is a great bonus.
So, is it worth it? Most times…yes.