Credit Cards

Is it worth it to pay premium credit card fees for the perks?

By: Dominic Licorish on May 19, 2017

When it comes to attracting the business of big spenders, credit card issuers go all out with card perks.

There’s $500 sign-up bonuses, free golf memberships, high earning rewards points, VIP access to concerts and events, free annual airline credit, and the list goes on.

While these seem like cool perks on the surface, it’s good to dig a little deeper and think about how much you really want them — especially since you’re going to be dropping a

hundred bucks or more annually just for the privilege of having them.

Below, I break down all of the sweet stuff that comes with owning a premium credit card.

Premium credit cards make travelling a breeze

Flying sucks. Being crammed on a plane with no leg room is not anyone’s idea of fun. And the lines? Don’t get me started. It’s all such a hassle and it’s not something I look forward to even if an exciting destination waits at the end of it.

Premium cards were originally geared towards frequent flyers, probably because someone realized that if they could make people actually enjoy air travelling, they could pull in serious business. That’s why most of the perks that come with premium cards are travel-related. Big travel points programs like Air Miles and Aeroplan partner up with airlines, hotels, and car rental services to give members all sorts of cool benefits.

Some cards, like the BMO World Elite Rewards MasterCard offer complimentary lounge visits, although, it's not commonplace. If you have a few hours to kill between connecting flights, you might as well enjoy them. Airport lounges offer a quiet space to relax and grab a drink or two along with complimentary food.

Free travel insurance

Premium cards such as the SimplyCash Preferred Card from American Express typically come with comprehensive travel insurance coverage including lost/stolen baggage protection, flight delay insurance, trip interruption insurance, emergency medical coverage, and even coverage on rental vehicles. Buying travel insurance is an important step a lot of people tend to skip when travelling. With these cards, you won’t have to worry about being covered if anything goes wrong while you’re out of your home province.

Beyond the big ones, there are a wealth of other travel perks that may be available depending on your program and the card chosen.

  • Annual travel credit

  • Airport valet service

  • Flight discounts

  • Airport parking discounts

  • Hotel discounts

  • Car rental discounts

  • Complimentary seat upgrades

  • Complimentary hotel room upgrades

  • Hotel partner program memberships (such as the Starwood Preferred Guest program)

Premium credit cards make you a Very Important Person

“Ooh, how’d you get Beyonce tickets?? They sold out so quick!”  

That’s what all your friends will say when you get exclusive access to concert presales and other VIP offers made available to premium cardholders. These offers could include anything from dining experiences to art shows and performances.

Premium cards typically come with 24/7 concierge services as well that can help save you time booking trips, discovering the finest restaurants, or putting together unforgettable experiences wherever you are in the world.

Premium credit cards are the best way to earn rewards points or cash back

More than anything else, the important thing about a premium credit card is how much value you get back from using it. Premium cards usually come with more generous reward programs than others. Beyond this, they also usually offer a whole ton of points as a sign-up bonus. Since these cardholders are expected to spend fairly large amounts on their cards, the rewards points or cash back programs will typically earn more than 1% on purchases with no limit on how much you can earn.

So, should you consider a premium credit card?

If you’re asking this question, chances are your credit score is in excellent shape and you earn a relatively good salary, because all of these cards will have minimum income requirements starting at around $75,000.

There are more premium credit card options than ever now, and part of that is to increase appeal to middle income earners. Some of these cards may not come with the flashiest of perks, but they can offer good value for those looking to dip their toes into the premium card market without dropping $500 a year.

If you’re good on that front, the next question you need to ask yourself is more personal. How many of the perks do you think you’ll use? How often will you use them? A free golf club membership is amazing, but if you don’t golf then it’s worthless.

The main factor in determining whether your card is worth its fee is how much you expect to earn back from spending. On the American Express Platinum card, one of the most expensive premium cards available, you’d need to spend $55,920 on the card every year to cover the $699 annual fee using earned membership reward points (1.25 points per dollar spent, 100 points = $1). Even with a more affordable card like the BMO CashBack World Elite MasterCard, one would need to spend $7,500 a year to cover the $120 annual fee using its base rewards rate of 1.75% cash back on all purchases. It’s much more affordable, but it’s still an important factor to consider.

On top of the earned value, there’s all the money you’re now saving on discounts, complimentary insurance, and other benefits.

While cards with $500 annual fees may have the absolute best perks, I think the more affordable premium cards like the World Elite Mastercard are the best choice for most consumers. They offer enhanced rewards, cool benefits, and the prestige of a premium card without the ridiculously high fees.

So yes, the perks of premium credit cards can indeed be worth it. Just remember to actually use them if you’ve got ‘em!

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