Annual fees: Credit Card Points and Miles for Beginners
Editorial Disclosure – Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post..
Credit cards can be a great way to earn travel rewards. However, many credit cards have an annual fee that can quickly add up. Depending on the card, the annual fee can vary from $50-$60 to hundreds of dollars.
Fortunately, many credit cards offer perks that may make the annual fee worth it. These benefits may include cash back, travel rewards, free access to airport lounges, rental car insurance, and extended warranties. Additionally, some cards may offer bonuses for signing up or when you reach spending milestones.
Of course, we use the points and miles earned through credit card welcome bonuses and everyday spending to earn nearly free travel, but the perks that come with annual fee cards are also a beneficial part of the points and miles game.
Four of the best annual fee perks!
Free Night Certificates – A free night hotel certificate is issued by a hotel chain or travel rewards program that allows you to stay one night at a hotel for free.
This annual free night certificate is awarded to your account each year on your card anniversary. Typically, there is a limit to the type of hotel you can use the free night certificate at. For example, Hyatt free night certificates can be used at Category 1-4 hotels.
Each time I’ve used a Free Night Certificate, the room cost greatly surpassed the annual fee’s cost. We have used a free night certificate with a $95 annual fee card to book a $600 room.
Airport Lounge Access with credit cards is a feature usually offered by travel rewards credit cards that grant access to exclusive airline lounges at airports. This access usually includes complimentary snacks, drinks, and other amenities. The level of lounge and the amount of access you gain differs from card to card. Download Lounge Buddy and Priority Pass apps, both free, to help you navigate the lounges world.
Covering TSA PreCheck, Global Entry, and CLEAR. TSA PreCheck and CLEAR are programs that allow travelers to go through a more convenient security screening process at airports. Global Entry is a U.S. Customs and Border Protection program that will enable travelers to clear customs when returning to the U.S. from abroad quickly.
TSA PreCheck has been a game changer at the airport for our families. Not only are the security lines often shorter, but this also allows us to zip through airport security without removing liquids and electronics from our bags and removing shoes and belts.
Rental Car Coverage is an excellent perk of many annual fee cards, and you can decline the additional rental car coverage. If you end up in a collision, you can turn the claim into the bank you paid for the rental car with in place of your insurance. Be sure to check with your insurance, credit card, and rental company, as all companies have different guidelines. I’ve used this one, and it saved us $1000 for our deductible and even more from our insurance premium not going up.
Final thought: Keeping a mix of credit cards with and without annual fees is the best practice for having a lucrative points and miles strategy.
Here are some of my favorite cards with annual fees:
Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
I found out about points and miles accidentally.
I was researching index funds and happened upon the points and miles community through creators who also post about budgets, financial independence, and investing.
Points and miles allowed those people to travel and work toward financial independence simultaneously.
Thank goodness I got started when I did. The past almost two years of travel have been something we will never forget.
Earning points and miles through credit cards is only a good choice if you have the financial discipline to use them, like cash/debit cards.
Since we started traveling with points and miles, we have had more money going into our investment and savings accounts than ever.
Now I'm excited to teach you!
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