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Brittney started her writing career in the world of science, putting her physics degree to good use. Her journey into finance started with building her personal credit, but soon grew into a borderline obsession with credit cards and travel rewards. For the last 7 years, she has enjoyed the ability to share her expertise with readers, as well as the opportunity to interview companies and individuals making an impact on our financial lives. She wholly believe most problems can be solved with the right research -- and a good spreadsheet -- and she specializes in translating complex financial topics into actionable advice to help educate and empower readers.
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When it comes to selecting a credit card, you have a seemingly endless array of choices. And with so many no annual fee credit cards, you may wonder what would make a credit card annual fee worth it.
The answer, as it turns out, is lots of things. From credit card rewards to sign-up bonuses to cardholder benefits and card membership, those costly annual fee cards can actually be highly valuable investments.
Of course, if you're not going to actually take advantage of all a card has to offer, it doesn't matter how much potential value it has; you won't reach it. Curious if a credit card annual fee is worth it for your favorite card? Here’s how you can find out.
See how much the rewards are worth
The easiest way to get value out of the credit card annual fee charged by your credit card company is to make sure you earn enough rewards to cover the credit card fee every year. This will make sure you're breaking even on the card whether you use all the benefits or not.
It’s common for cards with annual fees to offer more generous rewards than free alternatives. For example, with a travel credit card, you might get five times the miles for each dollar, compared with double miles earned using a cheaper card. If you get extra rewards, you’ll need to know how many extra miles or reward points you receive compared with a card that’s free or has a lower annual fee. You also need to know how much you’re likely to spend on the card.
Say, for example, you’re comparing these two cards:
A rewards card that has no annual fee and provides 1% cash back.
Now, divide the annual fee by the difference in rewards rate. In this case, $95 / 1% = 95 / 0.01 = $9,500.
So, you’d need to spend $9,500 per year to make up the cost difference between the two cards from the credit card annual fee. If you spend more than $9,500 on the rewards credit card, you’d be better off paying the fee for the better rewards. But if you spend less than $9,500, the fee wouldn’t be worth paying.
For cards that earn credit card miles or points, you need to consider how likely you are to actually redeem the rewards. If you're not traveling enough to use miles frequently, you might want to look for a no annual fee travel card.
You also have to take the relative value of the rewards into consideration. For instance, are you likely to get $0.01 per point by redeeming for statement credits or a gift card? Or are you more likely to redeem for travel rewards and net $0.02 per point or more? Decide how much the points are worth in the most likely redemption scenario before you do the math to decide if the credit card annual fee is worth paying.
The short-term value of sign-up bonuses
Sometimes cards that charge big annual fees come with generous credit card sign-up bonuses from the card issuer, such as enough welcome bonus points to score you hundreds of dollars in free travel. While you can consider these sign-up bonuses, the problem is you only get them once in your first year as a cardholder.
Depending on the size of the bonus, it could cover the credit card annual fee for a few years. After that, you’re stuck deciding whether to cancel an expensive card -- which could hurt your credit score by reducing your available credit limit and limiting your account history -- or whether to keep paying the credit card annual fee.
If you don’t mind canceling cards, it’s sometimes worth signing up for a card with a big fee from a card issuer that gives a generous sign-up bonus. But always make sure you can meet the requirements to earn the bonus. These requirements might involve spending several thousand dollars in your first few months as a cardholder.
A few of our favorite cards that don't have an annual fee
5.00/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 5.00 out of 5 stars.
5.00/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.50 out of 5 stars.
4.50/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.50 out of 5 stars.
4.50/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.50 out of 5 stars.
4.50/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.50 out of 5 stars.
4.50/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Credit Rating Requirement:
Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.
Recommended Credit Score required for this offer is: Good/Excellent (670-850)
Poor
Fair
Good
Excellent
300-579
580-669
670-739
740-850
Good/Excellent (670-850)
Credit Rating Requirement:
Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.
Recommended Credit Score required for this offer is: Fair to Excellent (580-850)
Poor
Fair
Good
Excellent
300-579
580-669
670-739
740-850
Fair to Excellent (580-850)
Credit Rating Requirement:
Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.
Recommended Credit Score required for this offer is: Good/Excellent (670-850)
Poor
Fair
Good
Excellent
300-579
580-669
670-739
740-850
Good/Excellent (670-850)
Welcome Offer:
Earn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year) — worth up to $300 cash back. That's 6.5% on travel purchased through Chase Travel℠, 4.5% on dining and drugstores, and 3% on all other purchases.
Up to $300 cash back
Welcome Offer:
Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
$200
Welcome Offer:
20,000 bonus points when you spend $1,000 in eligible purchases within the first 90 days of account opening
20,000 bonus points
Rewards Program:
Enjoy 5% cash back on travel purchased through Chase Travel℠, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases
1.5% - 5% cash back
Rewards Program:
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time. Plus, a special travel offer, earn 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/25.
2% cash back
Rewards Program:
4X points on dining, takeout, and restaurant delivery. 2X points on streaming services. Plus, a $15 credit for annual streaming purchases like Netflix, Hulu, Spotify®, Apple Music, Disney+, HBO Max and more! 2X points at grocery stores (excluding warehouse clubs and discount stores/supercenters), grocery delivery, gas stations, and EV charging stations. 1X point on all other eligible purchases.
1x - 4x points
Intro APR:
0% Intro APR on Purchases and Balance Transfers for 15 months
Purchases: 0% Intro APR on Purchases, 15 months
Balance Transfers: 0% Intro APR on Balance Transfers, 15 months
Intro APR:
Purchases: N/A
Balance Transfers: 0%, 18 months on Balance Transfers
Intro APR:
0% on purchases and balance transfers for the first 12 billing cycles on purchases billing cycles, and after that 17.74% to 28.74% (Variable).
Purchases: 0%, 12 billing cycles on purchases
Balance Transfers: 0%, 12 billing cycles
Regular APR:
19.74% - 28.49% Variable
Regular APR:
18.24% - 28.24% (Variable)
Regular APR:
17.74% to 28.74% (Variable)
Annual Fee:
$0
Annual Fee:
N/A
$0
Annual Fee:
$0
Highlights:
INTRO OFFER: Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year) - worth up to $300 cash back!
Enjoy 6.5% cash back on travel purchased through Chase Travel℠, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 4.5% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 3% on all other purchases (on up to $20,000 spent in the first year).
After your first year or $20,000 spent, enjoy 5% cash back on travel purchased through Chase Travel℠, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and unlimited 1.5% cash back on all other purchases.
No minimum to redeem for cash back. You can choose to receive a statement credit or direct deposit into most U.S. checking and savings accounts. Cash Back rewards do not expire as long as your account is open!
Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 19.74% - 28.49%.
No annual fee – You won't have to pay an annual fee for all the great features that come with your Freedom Unlimited® card
Keep tabs on your credit health, Chase Credit Journey helps you monitor your credit with free access to your latest score, alerts, and more.
Member FDIC
Highlights:
Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time. Plus, a special travel offer, earn 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/25.
Balance Transfer Only Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 18.24% - 28.24%, based on your creditworthiness.
Balance Transfers do not earn cash back. Intro APR does not apply to purchases.
If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
Highlights:
Intro Offer: Earn 20,000 bonus points when you spend $1,000 in eligible purchases within the first 90 days of account opening. That's a $200 value redeemable towards merchandise, gift cards, cash back, travel and more.
4X points on dining, takeout, and restaurant delivery.
2X points on streaming services. Plus, a $15 credit for annual streaming purchases like Netflix, Hulu, Spotify®, Apple Music, Disney+, HBO Max and more!
2X at grocery stores and gas stations/EV charging stations (discount stores/supercenters and wholesale clubs excluded).
1X point on all other eligible purchases.
0% Intro APR on purchases and balance transfers for the first 12 billing cycles. After that, a variable APR applies, currently 17.74% to 28.74%.
No Annual Fee
Points never expire as long as your account is active.
Redeem points towards a monetary charitable contribution and U.S. Bank will match your contribution at 100%.
Don't forget to add up the value of the cardholder perks
The final thing you should do when deciding if a credit card annual fee is worth paying is analyze the cardholder benefits. But make sure you're honest about what you'll use and what you won't.
To get a true value of your credit card annual fee, consider only the cardholder benefits you’ll actually use. For example, if the card offers $15 in monthly statement credits for a rideshare service, but you never use rideshare services, don't consider that cardholder perk in your calculations.
Travel rewards cards and luxury cards are the most likely to offer more extensive perks. Some common perks your credit card annual fee may unlock are:
Airline lounge access
Statement credits for rideshares or restaurants
Free companion airline tickets
Free checked bags for you and your travel companions on domestic flights
Early or late check-in at hotels
Free premium wifi at hotels
Upgraded rooms at hotels
Premium travel insurance
Primary rental car insurance
You’ll need to estimate how much each cardholder perk is actually worth to you to see if the credit card annual fee is worth it. Some values may be easy to calculate, while others may be subjective.
If the card offers free checked bags for you and a guest on American Airlines, for instance, you could look up the baggage fee on American Airlines website. If it costs you $30 to check a bag on a domestic flight and you check bags three times a year, this perk would be worth $90 to you (or $180 if each time was roundtrip).
But if you always fly first class and get to check a bag for free anyway, it would be worth $0.
You’ll also have to decide if you want to count the value of perks that would be nice to have, but that you wouldn’t otherwise pay for. You might like airline lounge access, for example. But if you wouldn’t pay for it if you didn’t have it free with your credit card, you may not want to factor that in when deciding whether to pay a credit card annual fee.
Is an annual fee card right for you?
There are numerous card offers out there boasting long lists of benefits you’ll get in exchange for paying a credit card annual fee. To decide if that card's annual fee is worth paying, add up the value of the cardholder perks, the rewards program, and the sign-up bonus.
If your numbers exceed the credit card annual fee, by all means, apply for the card and enjoy! But, if the total value falls short of the credit card annual fee, well, you may want to keep looking. With these simple calculations, you can avoid wasting money on a card that doesn’t make financial sense.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
Citigroup is an advertising partner of Motley Fool Money. Brittney Myers has positions in Netflix. The Motley Fool has positions in and recommends Apple, Netflix, Target, U.S. Bancorp, and Visa. The Motley Fool has a disclosure policy.
The Motley Fool owns shares of and recommends Visa.
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