Are premium credit cards worth paying the annual fee for?

I distinctly recall the first time I encountered a credit card with an annual fee exceeding $400. I laughed at the thought: "There's no way I'd ever sign up for something like that."

Fast forward to today, and I possess several premium credit cards. This often shocks my relatives and those unfamiliar with the world of points and miles. They often ask, "Are those premium credit cards truly worth their hefty annual fees?"

My response? It varies.

On one hand, many individuals believe that premium credit cards are worthwhile due to the array of benefits they provide. On the other hand, there are those who prefer to keep their spending minimal and find it hard to rationalize the steep costs of these luxury-oriented credit cards.

Let’s explore the benefits of premium credit cards to help you determine if one might align with your lifestyle.

Notable premium credit cards

Before diving into the benefits of premium credit cards, let’s first review a few examples.

Perhaps the most well-known option is The Platinum Card® from American Express, which carries a staggering annual fee of $695 (see rates and fees). A slightly more affordable choice is the Marriott Bonvoy Brilliant® American Express® Card, which grants automatic Platinum Elite status in Marriott Bonvoy, but has an annual fee of $650 (see rates and fees).

As we move further down the price range, you'll encounter premium credit cards such as the versatile Chase Sapphire Reserve® with a $550 annual fee, or the Hilton Honors American Express Aspire Card, which provides elite Diamond status, also for a $550 annual fee (see rates and fees).

The information regarding the Hilton Aspire card has been gathered independently by Dinogo. The details presented on this page have not been verified or supplied by the card issuer.

Several premium credit cards from leading U.S. airlines offer lounge access as an exclusive benefit for cardholders. These include the Delta SkyMiles® Reserve American Express Card with a $650 annual fee (see rates and fees), the United Club℠ Infinite Card costing $525 annually, and the Citi® / AAdvantage® Executive World Elite Mastercard® (see rates and fees) with a fee of $595.

The Capital One Venture X Rewards Credit Card is a relatively new addition to the premium credit card landscape and features the lowest annual fee at $395 (see rates and fees).

Having explored some popular premium credit cards and their associated costs, let’s examine the benefits they provide to determine if those hefty annual fees are justified.

Lounge access

This perk is perhaps the most apparent advantage of these cards and is sure to pique the interest of your friends and family. Premium credit cards typically offer some form of lounge access, though the specifics and ease of access can differ significantly from one card to another.

At one end of the range, there are cards that grant access to numerous lounges, permit you to bring guests, and impose no restrictions based on the airline you are flying that day.

Holders of the Amex Platinum, Chase Sapphire Reserve, and Venture X cards can benefit from Priority Pass Select membership, which allows unlimited visits to Priority Pass lounges and the option to bring guests into the lounge. Enrollment is necessary.

If you possess the Platinum Card, you will also gain access to American Express Centurion lounges, Delta Sky Club lounges, Escape Lounges — The Centurion Studio Partner, Airspace lounges, Plaza Premium lounges, Lufthansa lounges, and various Global Lounge Collection partner lounges. Please note that some benefits require prior enrollment, and access to Delta lounges is restricted to when you are flying on Delta that day.

Starting February 1, 2025, eligible Platinum Card Members will receive 10 visits per eligible Platinum Card per year to either the Delta Sky Club or Grab and Go when traveling on a same-day Delta-operated flight.

Venture X cardholders also enjoy access to Plaza Premium lounges and Capital One lounges.

Sapphire Reserve cardholders can access six Chase lounges, with plans for an additional five to open soon.

Conversely, some credit cards grant entry to airline-affiliated lounges. Access to these lounges is only available when flying with that specific airline, and these cards do not provide entry to other lounges. This includes access to Admirals Club lounges with the AAdvantage Executive World Elite Mastercard, United Club lounges with the Club Infinite card, and Delta Sky Club lounges with the Delta SkyMiles Reserve card.

Starting February 1, 2025, Reserve Card Members will receive 15 visits annually to the Delta Sky Club. To qualify for an unlimited number of visits each year beginning on this date, total eligible purchases on the card must reach $75,000 or more between January 1, 2024, and December 31, 2024, and in each subsequent calendar year.

Annual credits

Among the various perks provided by premium credit cards, these are the most straightforward to evaluate since they come with specific monetary values attached.

Take the Amex Platinum for example, which provides more than $1,400 in annual value if you enroll and utilize the benefits. This includes reimbursement for your Clear Plus membership fee and up to $200 in airline incident credits each year. Additionally, you’ll have access to up to $200 in hotel credits annually. Enrollment is necessary.

The Venture X also benefits cardholders by providing $300 in annual travel credits for bookings made through the Capital One Travel portal and grants 10,000 bonus miles on each account anniversary.

Cardholders of the Sapphire Reserve enjoy up to $300 in annual travel credits, which are easier to redeem as they apply to a broad definition of "travel" and are automatically applied to the first $300 of qualifying purchases in a year. There’s no need to book through a specific website.

Marriott Bonvoy Brilliant cardholders are entitled to up to $300 in dining credits each year on their card. This is issued as statement credits, allowing for up to $25 in credits for restaurant purchases monthly, including takeout and delivery. Enrollment is necessary.

Elite status

Hilton Aspire cardholders are granted top-tier Diamond status with Hilton Honors for the duration of their account. This elite status offers suite upgrades, bonus points for stays, and complimentary breakfast or food and beverage credits during your visit.

Marriott Bonvoy Brilliant cardholders automatically achieve Platinum Elite status with Marriott Bonvoy, which provides benefits such as welcome gifts of bonus points, free breakfast, potential upgrades to suites at check-in, and faster points accumulation.

Amex Platinum cardmembers can enroll for Gold Elite status with both Hilton Honors and Marriott Bonvoy. These status levels offer bonus points for each stay, enhanced points-earning rates for hotel room payments, and upgrades to preferred rooms — although not to suites.

Conversely, while these are not elite status levels, you can enjoy status-like perks with the United Club Infinite, Delta SkyMiles Reserve, and AAdvantage Executive cards.

With the Club Infinite card, you will receive two free checked bags for yourself and one companion on the same reservation when flying with United, in addition to priority check-in and other elite-like perks. Delta Reserve cardholders benefit from a free first checked bag on Delta-operated flights for themselves and up to eight companions on the same reservation. For AAdvantage Executive cardholders, both you and up to eight companions on the same reservation can enjoy a free first checked bag on American Airlines flights, along with priority check-in, priority boarding, and expedited airport screening where available.

The Venture X and Sapphire Reserve cards do not provide any form of permanent elite status.

Alleviate travel anxiety

Travel can be quite overwhelming, even when everything unfolds smoothly. The bustling crowds and lengthy lines can be challenging to navigate. Premium credit cards can alleviate some of this stress by facilitating quicker passage through crowds and offering assistance when unexpected issues arise during your journey.

Focusing on the first challenge of crowds and lines, premium credit cards can assist by providing reimbursement for your Global Entry or TSA PreCheck application fees. Furthermore, the United Club Infinite and Sapphire Reserve cards will also cover your application fee for Nexus, a program designed for cross-border travel between the U.S. and Canada. To qualify for reimbursement, ensure that you use your eligible card for payment. If you have an American Express card, you might need to enroll in this benefit beforehand.

Another program that helps speed up your passage through airport security is Clear Plus. If you pay for your annual membership with your Amex Platinum, your fee can be reimbursed. Remember to enroll for this benefit before you make your payment.

Premium credit cards typically come with perks such as trip cancellation insurance, trip delay insurance, coverage for lost or delayed baggage, and emergency insurance for injuries or emergencies that may occur during travel. These benefits can significantly ease stress and provide support when issues arise during your trip.

Trip cancellation insurance will reimburse you for lost expenses if you need to cancel a trip for a covered reason, which can differ among insurance providers. Typically, they cover scenarios such as being called into work or a family illness that prevents you from traveling. Trip delay insurance will compensate you for additional costs incurred during a delay, like meals or hotel stays, if your flight is delayed longer than anticipated.

If your luggage is lost or delayed, you can get reimbursed for necessary purchases made while you wait—think essentials like clean underwear and toiletries—or for the value of your belongings if your bag is permanently lost. It's important to note that only the United Club Infinite and Sapphire Reserve cards offer benefits for delayed baggage.

Premium credit cards also offer protection for your rental car during your travels. It's crucial to understand whether your card provides primary coverage or secondary coverage. Both the Venture X and Sapphire Reserve offer primary rental car insurance, while American Express cards (including the Delta Reserve, Platinum Card, Hilton Aspire, and Marriott Bonvoy Brilliant) provide secondary coverage.*

Safeguard your purchases

Premium credit cards also provide protection for you and your possessions while you're at home. This coverage includes benefits such as purchase protection, extended warranty, return protection, and cellphone protection.

Purchase protection covers items bought with your card that may become accidentally damaged, lost, or stolen for a specified period.

The extended warranty feature can extend the manufacturer's warranty by an additional year when you make a purchase with an eligible credit card. In contrast, return protection usually applies to items bought within the last 90 days on your card if the store refuses to accept returns.

Cellphone protection offers coverage for a stolen or damaged phone purchased with an eligible credit card or a phone linked to a mobile plan whose bill was paid with your eligible card in the prior billing cycle.

*For American Express cards, eligibility and benefit levels can differ by card. Terms, conditions, and restrictions apply. For more information, visit americanexpress.com/benefitsguide. The policies are underwritten by New Hampshire Insurance Company, part of AIG.

Points-earning potential

It's important to note that premium credit cards may not always be the optimal choice for every purchase. They probably aren't the best option for daily expenses either.

Nonetheless, there are certain categories where using a premium credit card can help you earn additional points and miles on your purchases.

For instance, the Amex Platinum Card stands out as the top card for buying airfare. Cardholders earn 5 points for every dollar spent on flights booked directly with airlines or via Amex Travel (on the first $500,000 in these purchases annually, after which it reverts to 1 point per dollar).

Moreover, most premium cobranded cards provide an exceptional return on purchases made within their specific brand. For example, holders of the Hilton Aspire card can accumulate 14 points for every dollar spent at Hilton properties — a far superior earning rate compared to other cards.

While these premium cards may not be the ideal choice for everyday transactions, they can deliver substantial benefits if you frequently spend in their designated bonus categories.

Conclusion

As illustrated, premium cards offer a plethora of benefits, but these vary significantly. The annual fees can range from $395 to $695, which is a $300 difference. Whether premium credit cards justify their annual fees will depend on the perks you utilize and the value they bring to you personally.

If the value you receive from the card is nearly equal to the annual fee, it’s likely that you’ll find it worth having. Those who can fully leverage the benefits of their premium credit cards might benefit even more: you could discover that the bank is effectively compensating you for keeping the card each year, as you're accessing greater value than the cost of the annual fee.

For Capital One products mentioned on this page, some benefits are provided by Visa® or Mastercard® and may differ by product. Please refer to the respective Guide to Benefits for more details, as terms and exclusions may apply.