If I had a dollar for every person who told me they won’t open or keep open a credit card with an annual fee, maybe I would actually spend that money on vacations. But let’s think about it—do you hesitate to spend money on a home to put a roof over your head? Do you think twice about the exorbitant amount you spend on yeshiva tuition for your children’s prestigious education? And what about sleep-away camp expenses or fees paid to financial advisors? These are all non-negotiable expenses that we willingly pay for the benefits they provide.
So why not consider spending money on a seemingly insignificant ancillary item that can save you thousands of dollars in the long run or even become a money maker? Yes, I’m referring to credit card annual fees.
Do credit cards with annual fees offer better benefits? Absolutely! While these cards impose fees for the privilege of using them, they come with enhanced rewards programs that can make them worthwhile. Annual fees can range from a few dollars to several hundred dollars, depending on the credit card and the benefits it offers, but they often provide significant travel and other perks. For example, the AMEX Business Platinum card has an annual fee of $695, and the Chase Preferred Reserve charges $550. Some credit cards waive the annual fee for the first year, while others offer rewards and perks to offset the cost.
Let’s explore the key benefits and examples of the AMEX Business Platinum Card.
How I utilize the AMEX Business Platinum Card:
- Statement Credits and Rebates: Many credit cards with annual fees offer statement credits or rebates that can offset the cost of the fee or certain expenses. The AMEX Business Platinum Card, for instance, provides an annual airline fee credit of up to $200. This credit can be used for qualifying airline charges such as checked bags or in-flight purchases. This is a great benefit for my family. This feature has two components. First, AMEX will credit your account up to $200 yearly for the airline of your choice, covering incidentals such as seat taxes, in-flight food and checked bags. Imagine saving $180 round trip on baggage fees during a winter vacation with three checked bags—an easy saving.
Additionally, when you book flights on your designated airline with points through the AMEX portal, you receive 35% of your points back. I’ve saved hundreds of thousands of points (and. of course, dollars) by booking this way.
- Lounge Benefits: Many credit cards with annual fees offer a wide range of travel-related perks. The AMEX Business Platinum Card covers the fees for airport lounge access, which enhances the travel experience with complementary food (may include pre-made kosher meals), as well as complementary alcoholic and non-alcoholic beverages. Comfortable seating and the opportunity for a quick shower before a flight (fantastic for stopover flights) may be available as well. For example, the United lounge charges $59 per person for a day pass. With the AMEX card, each cardholder can bring in two guests after meeting a spending threshold. Lounge access saved my sanity when flights were delayed.
- TSA and Clear Coverage: My favorite benefit is the TSA and Clear coverage, which enhances my travel experience and saves valuable time. The AMEX Business Platinum Card offers a statement credit of up to $100 every four years for your TSA Pre-Check and Global Entry application fees. This credit effectively covers the cost of your application, even if you’re not a frequent traveler.
Moreover, the card provides Clear membership at no additional cost. Clear costs $189 per year and is a biometric identity verification system that allows you to skip the ID check portion of the security screening process at participating airports. By using your fingerprint or iris scan, you can quickly move through security lines, further streamlining your travel experience. I timed the entire airport process back in May this year when flying United from Newark. It took me only 18 minutes to exit the car, walk with carry-on luggage straight to the Clear TSA machines at the United Security area (designated section if you have both), walk through security, use the restrooms and purchase a bottle of water, and be at the gate just in time to board. No lines, no taking off shoes, no segregating your electronic devices from your bags and no waiting in two-hour security lines. None. And it was all for free! I even realized when I got home from that conference that I had left my license at home, but with a Clear membership, there is no need to show your license or passport, even for international flights. Note: Not all airports/airlines have Clear machines yet.
- Cell Phone Coverage: I know everyone reading this is paying wireless charges. Why not save on fixed expenses? AMEX covers up to $120 in statement credits per year for wireless service purchases made directly with a wireless provider in the U.S., $10 back per month. In addition, you can be reimbursed for your costs to repair or replace your damaged or stolen cell phone.
- Other Perks: AMEX Platinum cards offer many other perks. Another one to highlight is the Dell $400 annual credit. I either purchase new computers for the office, a pair of headphones or another item to resell. Buying Xbox gift cards is a popular option for gamers and parents with school-aged children.
Now, let’s tally up all the benefits:
Annual Fee: ($695)
Airline Credit: $200
Global Entry/TSA: $100
Clear: $189
Dell: $400
Cell Phone Coverage: $120
Total net = $314 if you utilize each credit, plus points returned back on flights
With these additional benefits offered on the card, the AMEX Business Platinum Card proves to be a valuable card. Don’t own an LLC? No problem. Ever sold anything on eBay, TeaneckShuls Facebook Group or the Local Buy-Sell-Trade WhatsApp groups? Congrats, you have a business! You can open the card as a sole proprietor with your social security number.
Overall, credit cards with annual fees can be highly advantageous for those who maximize the benefits and rewards they offer, especially if their spending patterns align with the card’s features.
Atara, aka The Points Queen, is a former Wall Street executive who has transformed her passion for ecommerce and credit card rewards programs into a successful career. She also runs a consulting business assisting small businesses and individuals optimize their online presence and teach travel hacking concepts. Atara enjoys multiple free vacations each year thanks to her extensive collection of points and miles. To learn more, contact Atara at [email protected]
