Is A Credit Card Annual Fee Acceptable?

by Guest Blogger on January 11, 2010

Hi, this is Mr Credit Card from AskMrCreditCard.com. Today, I’m going to write about why paying an annual fee for a credit card may not be such a bad thing after all. If you are looking for a credit card, I have compiled a list of the best credit card offers and deals (IMO anyway) which you can check out.

annual fee credit cards

Why A Credit Card Annual Fee Is Acceptable

Ask most personal finance bloggers or columnists about credit card annual fees and the first thing they will say is that you should never get a credit card with an annual fee. Why? I guess it’s because there are simply too many credit cards around with no annual fees that it just does not make sense to make such recommendations. However, in my opinion, I think while this advice is applicable to the majority of people, there are instances where you should break this rule. And I’m going to highlight the reasons why below.

You are a Frequent Flier – There are lots of sales executives, CEOs, business owners, and consultants who fly a lot. For these folks, it absolutely makes sense to get the airline credit card of the airline that they fly the most with. The reason is simple. You can earn lots of miles, which can be redeemed for either free airline tickets or seat upgrades. While you may earn 1% or 2% on a good cash back credit card, with frequent flier miles, you can earn up to 7% equivalent if you know how to use the system.


Aside from miles, these cards give you other perks like having access to airport lounges, extra points for elite status qualifications, discounted or even free companion tickets. Hence, the annual fee that you pay is very often made back when you make use of the features of these cards. Even folks who fly multiple airlines and have memberships with a few programs can enroll in the SPG Starwood Preferred Guest program and transfer points to frequent flier miles.

No-Preset Spending Limits – One of the perks of many credit cards that require annual fees is that there is no preset spending limit. There are advantages and disadvantages to having this feature. Firstly, no preset spending limit does not imply that you can just charge any amount you want to the card. You first have to build a relationship with your credit card company and when you want to charge a large amount, a simple phone call will do the trick most of the time. Your credit limit that’s reported to the credit bureaus will be the largest amount that you have charged on your card.

But having no preset limits are very useful for high spenders and in particular, business owners who may have a sudden need for working capital. The best business credit cards that offer no-preset spending limits are just the right tools needed even if you have to pay an annual fee.

Concierge and Special Events – Many credit cards these days offer concierge services. There are a couple of cards with no annual fee that offer concierge services, but they are rare. This feature could be very useful for a very busy executive or business owner who makes use of it.

Many banks sponsor the arts and theaters and have access to great seats for live events. And they make these seats available to card holders before they are available to the public. If you are in a business where entertainment is important, then features like these will be extremely useful.

Image is Important – As offensive as this may sound to some folks, there are some people who work in professions where image is important. That is why many people carry charge cards from Amex like the Platinum Card. If you are in the entertainment business and you happen to service high end clients, then this should be a major consideration.

Rewards and Benefits versus Fees – Once you’ve had the chance to compare credit card offers, you’ll find that at the end of the day, deciding whether to get a credit card with an annual fee boils down to whether you will get more benefits than the fee you are paying. If you do not spend a lot on your card, then it makes no sense getting one with an annual fee — a simple card will do.

The purpose of this post is to highlight the point that you should not simply dismiss credit cards with an annual fee. Instead, you should do your research and figure out which card will work for you, regardless of whether or not it has an annual fee.

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