Are Premium Credit Cards with High Annual Fees Worth It?

One of the first concerns people who are new to travel hacking will have is the cost of annual fees. I will give an example of how I get more value than the cost of the annual fee.

Chase has a fairly new card out called the Chase Sapphire Reserve. Like the Chase Sapphire Preferred, it earns Chase Ultimate Rewards points, but it has a few more benefits than the Preferred version.  These benefits don’t come cheap; the annual fee is $450. If your jaw just dropped, stay with me.

cruz bay, st. john, USVI, SPG westin st. john, chase sapphire reserve annual fee

Cruz Bay, St. John, USVI

There are many reasons why this is one of my favorite cards, but I’ll list a few

  1. I earn 3 miles per dollar on travel and restaurants
  2. Airport lounge access for my guests and me
  3. Annual travel credit of 300$
  4. Lots of protection when traveling such as primary car rental insurance
  5. No international fee. This means if I’m in Mexico I can use my card with 0% fees. Many cards charge an international fee of about 3% which can add up

Now I will break down why I am willing to pay the cost of the annual fee initially. I have not decided if I’m going to keep it as the anniversary approaches, but I will explain how I can justify it for at least the first year.  I know I say don’t open cards if you’re buying a house in the near future, but at the time that I opened this we were over a year from the new house being completed and they were offering a 100,000 point bonus that I just couldn’t resist!

  • You get 300$ travel credit per calendar year. It resets in January so technically you can get 2 $300 bonuses*

*Update: For cards opened after May 21, 2017, the 300$ credit resets per membership year.  This is an unfortunate change, but it is not a deal-breaker for us.  If you opened a Chase Sapphire Reserve prior to May 21, 2017, your 300$ will reset in January.

  • They are very generous with what counts as travel for this bonus. This includes airline tickets, bag fees, hotels, rental cars, discount travel sites (such as Expedia), and anything else that codes as “travel” on your statement.
  • They also offer a full price credit for TSA precheck ($85) OR Global Entry ($100). I highly recommend Global Entry because you automatically get precheck with it. If you travel internationally, Global Entry is awesome and I will talk about it in the future. My husband, my son, and I already have it, but we still need to get it for our girls. Yes, they make you pay the $100 for babies too! This credit is given 1 time every 5 years (you have to renew GE every 5 years), and does not have to be for the cardholder, it just has to be paid for by the cardholder
  • The value of the bonus you get for signing up is often worth more than the annual fee.

Before I add up all of this, note that I’m going to use 50,000 points rather than the 100,000 that I got, since 50,000 is the current offer.

  • $300 travel credit when I opened the card last fall
  • $300 travel credit in January of this year
  • $100 Global Entry Fee
  • 50,000 points are worth $750 in travel when booked through Chase’s portal, and I can get even more value out of those points by transferring them to partners. To keep it simple, I will use $750 for this demonstration since these points are worth at least that.
  • Keep in mind there are lots more benefits that I value, I’m just trying to keep this as simple as possible for beginners!


The bottom line is that you pay an annual fee of 450$, but in the first year you get at least $1450 worth of travel and credit!



8 thoughts on “Are Premium Credit Cards with High Annual Fees Worth It?

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