The Finance Blogger

Would you pay a credit card annual fee for a credit card that gives you a number of benefits. I guess it depends on what those benefits are and whether you can actually use them or not. The writer just terminated one credit card account because it was costing $120 per year and I was not even using the card. Sure it gave me car insurance when I rented a car, health benefits for travel and purchase insurance on items that I might purchase, but if you do not use the card, then it is definitely not worth while to keep the card and continue paying the annual fee in our opinion.

So we ditched the card and now use another credit card with no annual fee that provides us with travel points which is what we are really looking for. The point is to assess the benefits, can you use them and what does it cost you to get this card.

Credit Card Annual Fee Can Be Worthwhile

Regardless of what the fee is, it is the benefits that are valuable. They are usually more valuable than the annual cost, if you use them. For example, if you rent a lot of cars and your credit card includes rental car insurance, you can save far more than the cost of the credit card. Another example is insurance for some of the things you purchase using your credit card. A friend bought an iPhone using his credit card. After the warranty was finished from Apple, his phone stopped working.

Fortunately his credit card purchase insurance paid for a new card saving him a great deal of money and paying him far more than the annual fee. Another popular benefit is cash from points that can be used to buy trips, pay for hotels and airfare. If you use these features then it can be quite valuable.

Another example is a credit card that gives you points towards a hotel chain. Marriott, Hilton and Holiday Inn all do this along with others. If you travel and stay in hotels a lot, this might be something that would be interesting. With one card we looked at they charged you $120 per year, but then gave you a coupon for one free night a year.

That pretty well pays for the annual fee and we will use this annual certificate for sure. Depends on your life style and what is valuable to you and your family!

For more thoughts and ideas about credit card use, click here.

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