Banking Finance

Is It Worth Paying A High Annual Credit Card Fee?


Is the $95 annual fee for a credit card worth the price? Chances are it isn’t because an average credit card holder will not use the card to simply justify the high annual fee. According to banks earned about $90.3 billion in credit card fees last 2014 and the additional hikes in 2015 are expected to increase their earnings further.

American Express increased the fee on its Premier Reward Gold Card and its co-branded credit card with Starwoods Hotel from $65 to $95 last year. Banks are lowering interest rates but they compensate for lost earnings by raising the annual fees on their credit cards. Why is there an annual fee? It is aimed at customers with poor carry credit and are considered high risk.

On the other hand, credit cards with annual fees offer some form of benefit. A good deal for users are frequent flier miles or accumulated points for a free hotel stay. Other perks include access to ticket prior to their being sold to the public or the ability to check a bag while on flight without paying for the privilege. If you fly United, it is $25 to check a bag and if you do it for 4 times a year, you have easily justified the $95 annual fee.

Nearly all rewards require that you spend a large amount for a particular type of spending. For example, if you are paying $75 in annual fees with 6% cash back on purchases at a grocery store the card may be right for you if you are doing a lot of grocery time. If someone else buys the groceries, you are not justifying your annual fees but wasting money.

The best bet is usually the cash back without the annual fee so that you won’t be tempted to use the credit frequently. The credit card industry is competitive and it is important to make an informed decision with on the best rates, rewards and spending limits. To help you gain the right answers to your questions, visit You will find all the appropriate information on several credit cards where you can gain the best deals.

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