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Are Premium Credit Cards Worth the Fee? Exploring the Benefits and Rewards

“Unveiling the Mind-Blowing Benefits of Premium Credit Cards:

Premium credit cards have gained popularity due to the extensive perks they offer, but many people question whether the high annual fees are justified. In this article, we’ll delve into the world of premium credit cards, comparing popular options and helping you determine if one is right for you.

Are Premium Credit Cards Worth the Fee

Comparing the Best Premium Credit Cards

To start, let’s take a quick look at some of the top premium credit cards that promise luxury perks and can help you maximize your earnings. While there are co-branded luxury credit cards available, we’ll focus on these general premium options for this comparison:

  • The Platinum Card® from American Express: Earn 80,000 bonus Membership Rewards® points after spending $6,000 within the first six months of card membership. Terms apply.
  • Chase Sapphire Reserve®: Earn 60,000 bonus Ultimate Rewards® points after you spend $4,000 on purchases in the first three months from account opening.
  • Capital One Venture X Rewards Credit Card: Earn 75,000 bonus miles once you spend $4,000 on purchases within the first three months from account opening.
  • U.S. Bank Altitude Reserve Visa Infinite® Card: Earn 50,000 bonus points after spending $4,500 in the first 90 days of account opening.
  • Bank of America® Premium Rewards® Elite Credit Card: Earn 50,000 online bonus points after you make at least $3,000 in purchases in the first 90 days from account opening.
  • Access to Airport Lounges.

One of the prominent perks of premium credit cards is access to airport lounges. Let’s compare the benefits among the cards:

  • Priority Pass Membership: All five cards offer a Priority Pass membership, providing access to over 1,300 airport lounges worldwide.
  • Visits and Guests: While the U.S. Bank Altitude Reserve limits lounge visits to four per year, the other four cards offer unlimited Priority Pass lounge visits.
  • Additional Benefits: Bank of America Premium Rewards Elite provides up to three additional Priority Pass memberships, each with two complimentary guests. The Platinum Card from American Express and Chase Sapphire Reserve allow up to two complimentary guests, while Capital One Venture X permits unlimited complimentary guests, subject to lounge capacity.
  • Enjoy Built-In Luxury Perks: Premium credit cards provide a range of luxury perks, including statement credits, reimbursements, and exclusive hotel booking programs. Let’s explore the offerings of each card:
  • Capital One Venture X: With an annual fee of $395, the card provides benefits like 10,000 bonus miles on your account anniversary and up to $300 in annual Capital One Travel credits. You also receive reimbursement for Global Entry or TSA PreCheck, elite status with Hertz, and access to the Premier Collection hotel bookings.
  • U.S. Bank Altitude Reserve: The card carries an annual fee of $400 but offers up to $325 in spending credits annually, covering travel, restaurants, fast food, and bars. You’ll also receive reimbursement for TSA PreCheck or Global Entry and access to the Visa Infinite Luxury Hotel Collection.
  • Chase Sapphire Reserve: With a $550 annual fee, the card provides a $300 annual travel credit, monthly spending credits with select partners, and reimbursement for Global Entry or TSA PreCheck. You’ll also have access to the Chase Luxury Hotel & Resort Collection.
  • Bank of America Premium Rewards Elite: The card charges $550 annually and offers reimbursement for Global Entry or TSA PreCheck, two annual spending credits totaling up to $450, and lifestyle perks like streaming, food delivery, and gym expenses. It also provides a 20% discount on international flights paid with points and the opportunity to earn up to 75% more rewards through the Bank of America Preferred Rewards program.

Cardholders also gain access to the Visa Infinite Luxury Hotel Collection and elite status with multiple rental car programs.

The Platinum Card from American Express: This card comes with an annual fee of $695 but offers over $1,500 worth of annual credits when fully maximized. These include credits for prepaid hotel bookings, Uber Cash, airline incidental fees, CLEAR membership, monthly Walmart+ membership fee, and reimbursement for Global Entry or TSA PreCheck. Additionally, cardholders enjoy complimentary Gold status with Marriott Bonvoy and Hilton Honors, elite status with multiple car rental programs, and access to hotel programs like Fine Hotels + Resorts and The Hotel Collection.

Protection for Purchases and Travels

Premium credit cards offer various built-in purchase and travel insurance protections. Here’s a summary of the available coverage and which cards include them:

Eligibility and benefit levels vary by card. Terms, conditions, and limitations apply. For specific details, please visit the respective card issuer’s website.

Earning Rewards on Purchases

Apart from the perks they provide, premium credit cards are also designed to help you earn rewards on your spending. Let’s explore the earning structures of these cards:

  • U.S. Bank Altitude Reserve: Earn 5X on prepaid hotels and car rentals booked through the Altitude Rewards Center, 3X on travel and mobile wallet purchases, and 1X on other purchases.
  • The Platinum Card from American Express: Earn Membership Rewards points, with 5X on airfare purchased from Amex Travel or directly from airlines, 5X on prepaid hotels booked with Amex Travel, and 1X on other purchases.
  • Chase Sapphire Reserve: Earn Ultimate Rewards points, with 10X on hotels and car rentals through Chase Travel, 5X on flights booked through Chase Travel, 3X on other travel and dining, and 1X on all other purchases.
  • Capital One Venture X: Earn Capital One miles, with 10X on hotels and car rentals through Capital One Travel, 5X on flights via Capital One Travel, and 2X on other purchases.
  • Bank of America Premium Rewards Elite: Earn 2X on travel and dining and 1.5X on other purchases, with the potential to earn higher rates through the Bank of America Preferred Rewards program.

Are Premium Credit Cards Worth the Fee?

After examining the benefits and rewards structures of these premium credit cards, you’ll notice some similarities and differences. To determine if a card is worth its annual fee, consider the value the benefits add to your life and how well they align with your spending habits.

Ask yourself if the benefits will save you money on purchases you already make or if you’ll use them simply because they’re available. For example, if you frequently dine at airports, access to free food in lounges can provide significant savings. On the other hand, if you rarely use rideshare apps or food delivery programs, those perks may hold less value for you.

Consider how the cards’ earning categories align with your spending habits. If you can take advantage of a card’s bonus categories, the return on spending can justify the annual fee. However, if most of your spending falls outside these bonus categories, a good credit card for everyday expenses with a lower annual fee might be a better fit. These cards typically have lower annual fees as well.

The Platinum Card from American Express: This card is best suited for those seeking luxury travel perks, regularly purchasing flights, and can make use of at least half of the card’s spending credits each year to offset the annual fee.

  • Chase Sapphire Reserve: It is ideal for earning rewards on dining, travel, and various bonus categories. It also provides access to non-lounge airport experiences within the Priority Pass network.
  • Capital One Venture X: This card is a great choice for extending perks to authorized users, enjoying some elite benefits at a reduced annual fee, and earning rewards on everyday spending.
  • U.S. Bank Altitude Reserve Visa Infinite Card: It is well-suited for individuals who frequently dine at restaurants, pay with mobile wallets, and rent cars.
  • Bank of America Premium Rewards Elite Credit Card: This card is recommended for those who have accounts with Bank of America or are willing to shift their banking relationship to earn rewards on every card swipe.

Bottom Line

Whether you have considered a premium credit card in the past or are just learning about them, it is crucial to assess the value they can provide in your specific situation. By maximizing the various benefits and spending credits offered by these cards, you can offset the annual fee and potentially gain additional value. However, if you are unable to make full use of the benefits, the high annual fee may be difficult to justify.

Keep in mind that premium cards typically require a good to excellent credit score. If your credit score is lower, take steps to improve it before applying. For instance, services like Experian Boost™ allow you to receive credit for on-time phone, utility, and streaming service payments, which can help boost your credit score.

Ultimately, the decision to open a premium credit card should be based on a thorough evaluation of the benefits, rewards, and fees, as well as your personal spending habits and financial goals.