I spend $1,600 a year on annual credit card fees. Here’s why it’s worth it

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With high fees comes great benefits.

Key points

  • Low annual fee rewards credit cards can pay for themselves if you maximize your income.
  • High-fee travel rewards cards have annual credits that can easily be worth the cost.
  • Cardholder perks like lounge access can be great boosts to a card’s overall value.

Over the years, maximizing my credit card rewards has become one of my favorite hobbies. In fact, it’s right up there with binge-watching British food competitions.

A big part of that hobby has been tweaking my lineup of credit cards to make sure I’m maximizing every purchase, every time. This obsession with getting the most out of my cards – and my card spend – means I’ve accumulated a lot of cards. As, I have several wallets to fit them all a lot.

While more than half of the cards in my collection are cards with no annual fee, the other half are not. And those annual fees add up. In my case, they total about $1,600 per year. That’s right, I pay $1,600 a year just in annual credit card fees.

If this number makes you cringe, you are not alone. But listen to me. Even though I have to pay a good part of the costs every year, I don’t really have to lose This money.

Confused? Let me clarify. Every credit card I own gives me rewards, credits and perks that provide value bigger than the annual fee. This means that I gain in value every year. Here’s how it works.

The rewards

The number one way I get value from my credit cards is by buying rewards. Every card I own is a rewards credit card. Some are cash back cards, others earn points in a few transferable currencies. I even have a handful of co-branded cards that earn airline miles or hotel rewards.

Although the currencies differ, they all have one thing in common: each card in the collection is the best card, in terms of rewards, for at least one of the things I regularly buy.

For example, a card is best for groceries, offering 4X points per dollar. Another card gives me 5X points per dollar on flights and airline purchases. I even have a card that gives me 6% cash back on streaming services.

Do you have to pay an annual fee to maximize your rewards? Not necessarily. It is perfectly possible to have a very solid rewards strategy consisting entirely of credit cards with no annual fee.

But when you want to get the highest rewards rates possible, you’ll have to pay an annual fee. And for me, it works. Several of my cards make up their entire annual fee – and even some – solely in rewards.

The credits

While rewards can offer a ton of value, some cards will never be worth their fees in rewards alone. This is especially true for travel rewards cards with annual fees over $400.

But what these expensive cards have is often even more valuable than the rewards: credits.

Rewards card credits come in a variety of shapes and sizes. Hotel credit cards, for example, often offer annual free night rewards. These are basically digital vouchers that you can redeem for free hotel stays. I easily got over $300 in value for a single free night with a credit card with an annual fee of just $95.

Other cards offer statement credits. These credits work like discounts. When you make a qualifying purchase, you get a statement credit for a certain amount. For example, one of my cards gives me a credit of $10 per month when I make purchases at eligible restaurant brands.

Taking full advantage of these credits goes a long way in getting the most out of expensive cards. With most of these cards, I earn more in credits than I spend in fees. The trick is to make sure the credits match the expenses you’re already making; don’t make purchases that you wouldn’t normally make just for statement credits.


Perks are another way to get extra value from my more expensive credit cards. These are little extras that come with the card aside from rewards and credits.

One of my favorite perks is access to the airport lounge. I get unlimited visits to thousands of airport lounges at airports around the world, often with the ability to bring in guests for free. Airport lounges are not only a great place to spend some (more) quiet time before a flight, but they also tend to offer free food and drink.

I also like the benefits of my hotel status. I have a few credit cards that offer elite status with popular hotel brands, like Hilton and Marriott. This elevated status has earned me everything from room upgrades to free breakfast.

Depending on how often you travel, perks like the above alone can be worth a hefty annual fee. When paired with rewards and credits, however, they’re the precious icing on an already lucrative cake.

Regular card audits are essential

At this point, you can probably see why I’ve elevated my credit card obsession to a hobby. It takes a certain amount of time and energy to keep track of it all. This includes a spreadsheet that I update every two weeks.

It also includes my annual card audits. Once a year – usually before the annual fee is posted again – I evaluate each card in my collection to make sure it’s still performing well. I calculate all the numbers for rewards, credits and benefits and compare them to all card fees. If my spending habits have changed and the card doesn’t hold up, it’s cancelled.

This is how I justify spending $1,600 a year on credit card fees. By my estimate, I earn at least double those benefits every year, and I have very healthy reward balances ready to be used for even more valuable trips in the future.

Maximizing rewards, tracking credits, and juggling perks isn’t for everyone. It is certainly work. But if you do it right, it can be a fun hobby that pays for itself!

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