Credit card annual fees keep going up. The Citi® / AAdvantage® Executive World Elite Mastercard® increased it’s fee from $450 to $595 in July 2023. Last year, the Marriott Bonvoy Brilliant card’s fee increased from $450 to $650. And, in recent years, Amex increased their Platinum card annual fees twice. First from $450 to $550, and more recently to $695. Other notable increases include Chase’s Sapphire Reserve (from $450 to $550) and Amex’s Delta Reserve (also from $450 to $550). All of these cards are worth getting for their initial welcome bonuses, but they can be very expensive to keep… especially if you have more than one. How can you decide which are worth keeping?
The premium card worksheet
In order to help identify which cards to keep or cancel, I created a Google Doc spreadsheet with tabs for each of the most popular ultra-premium rewards cards (and a handful of popular premium cards). On each tab you can enter your estimated value for each perk and then return to the summary tab to see which cards are keepers.
The rest of this post goes into detail about how I recommend using this worksheet, but here are some quick tips for those who don’t plan to read the rest (I get it: even though there’s some really good stuff below, you’ve got other things to do):
- Don’t double-count overlapping perks! For example, assign value to Priority Pass only to the card that you’re most likely to keep.
- Value perks based on how much you’d be willing to pre-pay if it was available as a subscription. Don’t estimate based on how much you’re likely to save.
- If your total value of perks equals or exceeds a card’s annual fee, then its a keeper.
To make up for big fees, issuers (especially Amex) have been adding “sponsored perks” where you can get rebates from spend with specific vendors (Equinox, Peloton, New York Times, DoorDash, Dell, Saks Fifth Avenue, etc.). On paper, it looks like you can get back more money than the annual fee for these cards. And you can, if you would actually pay for these products and services anyway. The reality, though, is different. Take the Business Platinum Dell credits, for example. Each year, January through end of June and again July through end of December, you can get $200 back from Dell purchases, for a total of $400 back. If you regularly buy $200 or more from Dell, both early in the year and late in the year, then the rebate really can be thought of as being worth nearly its face value. But, if you find yourself scrambling twice per year to figure out what to buy, the rebate should be worth considerably less to you. In my case, since Dell rarely has in-stock XBox gift cards anymore (which can be used for anything in the Microsoft Store), I value these Dell rebates at only half of face value. It’s nice to get free software, microphones, earbuds, chargers, cables, and other gadgets twice per year, but not face-value nice.
When it comes time to pay the annual renewal fee on each of your premium cards, it makes sense to evaluate whether or not the card’s perks and rebates are at least as valuable as the card’s annual fee. If the answer is “no”, then I recommend calling to cancel the card. If the card issuer offers a great retention bonus, great — keep the card for another year. If not, go ahead and cancel or product change to a fee-free card if possible (note that Amex Platinum cards do not have a product change path to a free card). Before cancelling, though, please take a look at our checklist for cancelling credit cards to avoid losing points and other rewards.
How to estimate value
When you pay a credit card’s annual fee, you are essentially pre-paying for a year of perks that this card offers. The best way to determine what these perks are worth to you is to decide for each one, how much you’d be willing to pay if it was available independently as an annual subscription. Consider the Amex Business Platinum card’s wireless cell phone credits, for example. The Business Platinum card offers up to $10 back per month when you use your card to pay your cell phone bill. On the surface, that sounds like an easy $120 back per year for most of us. But you shouldn’t value it at the full $120. Imagine if your phone company sold a benefit like this separately: What would you pay annually to AT&T (for example) to save $10 per month off your bill? You wouldn’t pay $120, would you? It wouldn’t make any sense to pay $120 up front for a total of $120 in savings spread out through the year. Instead, you might pay $100 (for example) for a $120 in savings.
- Chase Sapphire Reserve $300 Travel Credits: This is a really easy credit to earn since all travel purchases count. But how much would you pay in advance to get $300 back? Keep in mind, too, that the Sapphire Reserve doesn’t give you points for that $300 in spend. That’s almost $15 in rewards lost to that spend. I’d argue that you shouldn’t value this perk at more than $285 and it would be reasonable to value it less.
- Amex Platinum $200 Prepaid Hotel Credit: Consumer Platinum cards offer $200 back per calendar year towards prepaid Fine Hotels & Resorts or The Hotel Collection bookings. That’s great, but how much would you pre-pay for this rebate? Keep in mind that unless you habitually book through Fine Hotels & Resorts or The Hotel Collection, you might end up not using this perk at all. Personally, I wouldn’t value this at more than $100 per year.
- Marriott Bonvoy Brilliant 85K free night certificate: You might save $500, $700, $900 or more off a hotel night when you use this certificate, but there’s no way you should pay that much in advance. The only reason to pay in advance for a free night certificate (especially one that expires after a year) is if you expect to get way more value than you put it. So, for example, you might be willing to pre-pay $300 or $400 for the chance of saving $500 or more.
One and done perks
There are lots of valuable perks that have no incremental value if you have the same perk from multiple cards. For example, getting Hilton Gold status from one credit card is great, but getting it from a second card has no incremental value. Here are some more examples where you might value a perk from one card, but having on multiple cards doesn’t make it any more valuable:
- Free checked bags
- Elite status with a specific hotel, airline, or car rental service
- Lounge access to a specific type of lounge
Diminishing return perks
Some perks have diminishing value with each extra card that offers the perk. For example, each of the Amex Platinum consumer cards (the regular consumer Platinum card, and the one’s from Schwab and Morgan Stanley) offer $240 per year in Digital Entertainment Credits: Up to $20 per month in credits for subscriptions to NY Times, ESPN+, Disney+, Hulu, Peacock, Sirius XM, and Audible. In my case, I subscribed to the New York Times e-edition anyway, and so value this perk on my generic Platinum card pretty highly. I pay about $17 per month, or $204 per year and so I value these savings at about $180 (i.e. I would be willing to prepay $180 for those savings). But I also have the Schwab Platinum card which I have used to subscribe to Audible for $14.95 per month. I wouldn’t pay that much for Audible without those savings, though, so here I value the perk at about $100. My wife has a Platinum card too, so with her card we subscribed to the Disney+ Bundle (Disney+, Hulu No Ads, and ESPN+) for $20 per month. If we didn’t have the Platinum card we would only subscribe to Hulu No Ads and Disney+. That combo alone would cost $15.98 per month. So I shouldn’t value this perk for this card at more than 15.98 x 12 = $191.76. Let’s round it down to $175 since I could otherwise pay with discount gift cards.
How to value overlapping perks
The trick to doing this right is to first figure out which of your cards are the most likely “keepers” and assign perk values to those cards first. Then go to your next most likely to keep cards, and only assign incremental value (if any) to perks that overlap with your keeper cards. And repeat with the next most likely to keep cards, and so on.
If you have a bunch of premium cards, this is not easy! For example, many premium cards offer Priority Pass memberships. If you have more than one, then it’s a good idea to figure out which card is the most likely “keeper”, but keep in mind that the value of Priority Pass varies by card. Priority Pass from Amex doesn’t include free meals at Priority Pass restaurants. And, with other cards, details vary about how many guests you can bring in and what it would cost (if anything) to add authorized users with their own Priority Pass membership. One of the best options overall is with the Chase Ritz card which offers Priority Pass with unlimited guests, and free authorized users, each of which can get their own Priority Pass with unlimited guests. But the Ritz card isn’t easy to get (you have to start with a Chase Marriott consumer card and upgrade) and its perks aren’t ideal for everyone. Still, if you have the card and value its benefits (as I do), it makes sense for this to be your first-in-line keeper card. Estimate the value of Priority Pass on that card, but not on any others. If the Ritz card isn’t for you, a fantastic alternative is Capital One’s Venture X card which also offers Priority Pass to your free authorized users. Having a single “keeper” card with Priority Pass solves another problem: you’ll never have to wonder which of your many Priority Pass cards is the right one to use at any given time. Get the one that comes with your keeper card and never request another.
Here’s another example: I have two variations of consumer Platinum cards and the Business Platinum card from American Express. All 3 have many overlapping benefits, and picking which one is the most likely “keeper” of the three is hard. I really like the Business Platinum card’s 35% airline bonus, but the personal cards have more useful (to me) annual rebates. And I like that the Schwab Platinum card offers statement credits thanks to my having retirement funds with Schwab, but I hate that it doesn’t get the amazing refer-a-friend offers that are often available to other cards that earn Membership Rewards (the Schwab card gets cash back for referrals instead of earning Membership Rewards points). Ultimately, I decided that the generic Platinum card was my most likely “keeper” of the three due to having both more useful rebates and great refer-a-friend offers (some of which were available only to this card in the past). I put the Business Platinum second, and the Schwab Platinum third. This ordering had a huge effect on my total estimated value of each card. The generic Platinum came out as a definite keeper, whereas both the Schwab Platinum and the Business Platinum cards will just barely be on the chopping block. In each case, a simple retention phone call or secure message is likely to result in enough value to keep the card another year.
A real world example
I used the latest version of this spreadsheet myself the other day to estimate values for 10 different premium cards that I have. I found that six are keepers and 4 should be cancelled or downgraded if I don’t receive a good retention offer when the next annual fee comes due. Here’s what I found:
I started with my Ritz card because I consider it to be my ultimate “keeper” card. This is the card where I assign value to Priority Pass. For all of my other cards that offer Priority Pass, I assigned zero value to that perk. See the section on overlapping perks, above, for a discussion about this.
Here are the perks that I valued:
- $300 in annual airline fee reimbursements: $240
- Annual 85K Free Night Award each year upon renewal: $300
- Priority Pass Select for you plus unlimited free guests: $100
- Free authorized users: $100 [allows me to gift priority pass to relatives — I don’t even have to give them the Ritz card with their name on it. I just give them the Priority Pass card]
- 15 qualifying nights towards elite status: $50. I have lifetime Platinum status with Marriott so I don’t value this much, but it does help me get to 50 nights for a Choice Benefit selection or towards 75 night Titanium status.
- Best in class travel insurance: $0 [This is a very valuable benefit, but since I ended up deciding that the Sapphire Reserve (which has the same travel insurance but better travel rewards) was a keeper, I zeroed out this one and moved the estimate for this to the Sapphire Reserve].
- Total: $790
My total estimated value for this card came to $790. That’s well above the card’s $450 annual fee and so this confirmed what I already knew: this card is a keeper.
Bonvoy Brilliant: Drop (Maybe)
The Bonvoy Brilliant card is loaded with high end perks and my valuations (how much I’d be willing to prepay for these perks) came to $550. That’s a lot, but it’s a bit short of the card’s new $650 annual fee (previously $450). I have almost a full 12 months before the new annual fee kicks in and so I won’t be cancelling soon. I’ll re-evaluate next year. Plus, regardless of what I decide, calling or messaging to cancel the card will likely result in a very nice retention offer.
Here are the benefits I valued:
- $25 per month dining credits: $200
- Annual free night upon renewal (worth 85K points): $300
- Marriott Platinum Status: $0 [I have lifetime Platinum status]
- 25 qualifying nights towards elite status: $50 [this is the incremental benefit of 10 more nights over the Ritz card’s 15. This will help me get to 50 nights for a Choice Benefit selection or towards 75 night Titanium status.]
- Total: $550
Amex Platinum Cards: Keep 1, Drop 2 (Maybe)
I described my Platinum card situation above in the section titled “How to value overlapping perks.” The end result is that the generic Platinum card came out as a definite keeper, but the other two (the Platinum Card from Schwab and the Business Platinum Card) should be dropped when the next annual fees come due. That said, in both cases I’m likely to get good retention offers for these cards and so I’ll probably keep them if that happens.
Here are the perks where I ascribed value to the regular Platinum consumer card:
- $200 airline fee credit: $150
- $200 Prepaid Hotel credit: $100
- $240 Digital Entertainment Credit: $130
- $200 in Uber credits: $100
- $100 in Saks credits: $50
- Free Walmart+: $25
- International Airline Program: $25
- Lounge access (Centurion Lounge, Airspace Lounge, Escape Lounge): $100
- Delta Sky Club: $150
- Hilton Gold: $50
- National Car Executive status: $50
- Emergency Evacuation & Transportation: $50
- Refer-A-Friend Offers: $100 [This particular card keeps getting amazing referral offers]
- Total: $1,080
Here are the perks I valued with the Business Platinum:
- $200 airline fee credit: $150
- $120 wireless credits: $100
- $400 Dell: $200
- 35% airline bonus: $150
- Total: $600
And here are the perks I valued with the Schwab Platinum:
- $200 airline fee credit: $125 [diminishing returns due to having to use up credits on the other Platinum cards]
- $200 Prepaid Hotel credit: $100
- $240 Digital Entertainment Credit: $120
- $200 in Uber credits: $100
- $100 in Saks credits: $50
- Schwab statement credit: $100
- Total: $595
Chase Sapphire Reserve: Keep
My initial estimated value for my $550 Sapphire Reserve card came to only $555. That’s only $5 over the annual fee, but that’s fine! Remember that the $555 estimate is the amount I’d be willing to pay for the card’s perks so even if the annual fee was $555 I should keep it. However, after realizing the card was a keeper, I moved the value of the card’s best-in-class travel insurance from the Ritz card to the Sapphire Reserve (the card I actually use to pay for travel) and that bumped up my valuation to $655:
- $300 annual travel credits: $270
- Points transferable to partners: $95
- 3X points per dollar for travel: $175
- Best in class travel insurance: $100
- Lyft rideshare benefits: $10
- DoorDash food delivery benefits: $5
- Total: $655
As I wrote in a recent post, the combination of 3x earnings on all travel spend plus best-in-class travel protections plus the annual $300 travel rebate is worth more to me than the card’s $550 annual fee and so its a keeper.
Note that I didn’t give any value to the card’s Priority Pass since the Ritz card with Priority Pass is my #1 keeper card (and so the value of that benefit goes there).
Capital One Venture X: Keep
My estimate for the Venture X came to $400. That’s just $5 more than the card’s $395 but enough to make this one a keeper. Here are the perks that I valued:
- Annual $300 Credit ($300 back each year for bookings through Capital One Travel): $225
- 10K bonus miles each anniversary: $100
- Capital One Lounge access: $35 [I figure that it’s likely that I’ll hit up a Capital One lounge at least once per year, especially once they roll out some more of these]
- Free authorized users: $40 [The ability to give lounge access to others is especially relevant to me since this is really my wife’s Venture X card I’m writing about]
- Total: $400
Note that I didn’t give any value to the card’s Priority Pass since the Ritz card with Priority Pass is my #1 keeper card (and so the value of that benefit goes there), and I didn’t assign value to Plaza Premium Lounge access since I tend to have an Amex Platinum card keeper which includes Plaza Premium Lounges plus much more.
Amex Gold Card: Drop
This Gold card is mysteriously no longer eligible for refer-a-friend offers. Those offers were the main reason I kept the card last year. I earn better rewards for dining and grocery with Citi cards (5x dining with my Prestige card & 5x grocery with my Custom Cash cards). Now, the amount I’d be willing to pay came to only $160 which isn’t too close to the card’s $250 annual fee.
Here were my valuations:
- $120 in Uber credits: $60
- $120 in dining credits: $50
- 4x points at US Supermarkets (up to $25K in purchases, then 1x): $50 [I used to value this much higher, but I’m happy getting 5x at grocery stores with my Citi Custom Cash cards]
- Total: $160
Citi Prestige: Keep
The $495 Prestige card (no longer available to new applicants) has lost most of its prestige over the years as Citi dropped one benefit after another, including travel protections. That said, I spend a lot on dining and so the ability to earn 5x dining uncapped is huge. Here’s how I valued it:
- $250 travel credit: $200
- Ability to transfer points to airline & hotel programs: $95
- 5X dining: $250
- Citigold $145 rebate for Prestige cardholders: $100
- Total: $645
Altitude Reserve: Keep
The $400 Altitude Reserve card comes with $325 in travel & dining credits which I valued at $300. So, I only needed to justify $100 more to deem this card a keeper. Between earning 3x for mobile wallet payments & travel, Real Time Mobile Rewards (a super cool feature!), this card is staying in my Apple Pay wallet for the long-term.
- $325 in annual travel & dining credits: $275
- Real Time Mobile Rewards: $50
- 3X travel and mobile wallet payments: $100 [The ability to earn 3x for all Apple Pay spend is big]
- Total: $425