Comments on: Dumb Money: Annual Fees on Credit Cards

By: frugalCPA

frugalCPA — Sat, 14 Feb 2009 17:48:55 +0000

I was deeply loathe to pay any sort of annual fee until I did a similar calculation to what Start-Up described above. With the fee taken into account, we’re saving about $400/year on flights that we would take whether we had the rewards or not. It’s a sweet deal.

By: Ray

Ray — Wed, 17 Sep 2008 02:49:57 +0000

Totally agree with you. Recently Amex called me up to offer me the Platinum card. After hearing about the annual fee I rejected them straightaway. Why would I want to pay that much when I have 4 other cards that are totally free? (Usually with 2-year waiver for annual fee–after 2 years I’ll just cancel the cards if they won’t waive the fee for year 3.)

There are so many cards these days with good perks and no annual fee, it never makes sense to pay any annual fee, ever. Those people calling me up and saying “No waiver Sir but we can…” straightaway get a “Thank you, not interested” from me.

By: 143rd Festival of Frugality: | LivingAlmostLarge

143rd Festival of Frugality: | LivingAlmostLarge — Tue, 16 Sep 2008 13:06:05 +0000

[...] says don’t waste money on credit card fees in Dumb Money: Annual Fees on Credit Cards posted at No Debt Plan. I gotta wonder who actually uses cards with [...]

By: Kevin

Kevin — Mon, 15 Sep 2008 02:32:38 +0000

@Start-Up: I guess the only risk there is if you don’t use it enough to generate the rewards to make up for it. That’s what they are counting on. But if it works for you, hey, my hat off to you.

@Kimberly: I’d be interested in hearing more about this great service. I’m sending you an e-mail.

By: Kimberly

Kimberly — Thu, 11 Sep 2008 18:38:15 +0000

Absolutely great service, consistently – that’s why I kept it so long at $395. But when they sent me a note (I think it was last year?) that it was going up to $450 I really had to reconsider. There was just some mental barrier being crossed; I canceled it before my then-current year was up and got a pro rated refund.

By: Start-Up

Start-Up — Thu, 11 Sep 2008 16:33:31 +0000

I currently pay a $30-$40 annual fee on my credit card. There is a version of my credit card that has no annual fee, however, the annual fee raises the percentage of reward points i receive from each purchase. The added points translate into airline miles and free airline tickets. I calculated that I would reach the free flights faster with the annual fee, more than making up for the annual fee itself. I suppose you have to keep in mind that I would have paid for the airline flight anyways.

More often than not an annual fee is bad. Especially when it only rewards you with better customer service or something to that effect. Sometimes, however, the annual fee is returned and then some.

By: Kevin

Kevin — Thu, 11 Sep 2008 02:52:45 +0000

@Kimberly: Eeek! $3950 is a lot of money! Did you notice any increase in service?

By: Kimberly

Kimberly — Wed, 10 Sep 2008 23:25:05 +0000

I am so ashamed to admit that I paid $395 a year for AmEx Platinum for like ten or eleven years – I finally dumped it this year when they jacked up the fee.

Such a bad move to have kept it so long! I regret it.

I agree – don’t pay an annual fee!