Credit Cards with Annual Fees Under $100
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In my early 20s, the last thing I wanted to do was to pay an annual fee. For anything.
Who wants to pay a fee? Especially one that you have to pay once a year?
- Warehouse club? Back then, I saw no reason to buy 20 rolls of toilet paper.
- Gym membership? If I wanted to exercise, I could go outside and jog… for free.
- Travel credit card? I just wanted a credit card that will give me some cash back.
What Made the Difference
But things changed as I got older, traveled more, and started a family.
My interests changed and so did my needs.
And sometimes those wants and needs cost more. In return for such costs, I realized I could benefit greatly.
- My Costco membership costs $55/year, but it has saved me hundreds on everything from fresh fruit to outdoor furniture - and, yes, toilet paper.
- My Amazon Prime costs $99/year, but I get the stuff I want in 2 days, sometimes quicker.
- My Netflix costs about $95/year, but I get to watch movies and awesome TV shows without commercials.
(I’m still not on board with a gym membership, but I can see why it works for some.)
For things like that: you sign up, you pay, and you don't have to think much about it. But how about your credit card?
When you are just starting out, a rewards card with no annual fee is a good way to get used to the convenience and perks of owning a credit card.
But is now the time to upgrade to a credit card WITH an annual fee?
Maybe. Let's explore why now might be the time to act.
Why Free Is Not Always Good
Some credit cards with an annual fee have benefits that can justify the cost — if you are smart about it.
Your goal is to find a credit card that saves you enough money and time to justify the annual fee.
This is particularly true of cards that give you travel perks. You can often make your points and miles go far by booking directly through a credit card travel portal or by transferring them to an airline frequent flyer or hotel loyalty program.
Some cards do have crazy annual fees, and you may want to steer clear of them.
In my experience, the sweet spot tends to be a card with an under-$100 annual fee. I'll explain below.
Knowledge is Power
Hot Deal: Chase Sapphire Preferred
Why we like Chase Sapphire Preferred:
- Earn 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide.
- 1:1 point transfer to leading frequent traveler programs, such as United Airlines, Southwest, Marriott, Hyatt, and IHG.
- Premium travel and purchase protection benefits (including trip cancellation/trip interruption insurance, auto rental collision damage waiver, and purchase protection).
If you travel at least once a year, this can be a valuable money-saving benefit since you usually have to pay for these perks (such as trip cancellation/trip interruption insurance).
What does it cost?
- Introductory Annual Fee of $0 the first year, then $95
Who do we recommend this card for?
|© mathieu_distefano (CC BY-SA 2.0) via Flickr|
- People who like a lucrative sign-up promotion – which we'll explain below.
- People who spend more than $9,500/year on travel.
Why? Because you'll earn double the points on travel. If you spend more than $9,500/year on travel, this card will be more rewarding than a no annual fee credit card that earns only 1x points.
- People who spend over $183/week dining at restaurants.
Why? Because you'll earn double the points for dining at restaurants, including fast food.
- If you spend $183/week at restaurants, you will earn 19,032 points in a year. That is worth a $190.32 statement credit, just for feeding your dining-out habit.
- In comparison, a typical rewards credit card would earn you back just $95.16 for that restaurant spending.
- The difference is more than enough to justify the $95 annual fee. And if you make this your regular go-to card, anything more you spend will be gravy.
But that's not all. Instead of redeeming the 19,032 points for a statement credit, you can redeem the points toward travel. With the 20% discount on travel you can get by booking through the Chase Ultimate Rewards portal, those points become worth $237.90.
If you apply now, you can earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®.
Starwood Preferred Guest
Why we like the Starwood Preferred Guest Credit Card from American Express, a CreditDonkey Partner:
- You earn 1 Starpoint per eligible dollar spent. You can redeem Starpoints at over 1,300 hotels and resorts in over 100 countries (with no blackout dates).
- But here is the kicker. Instead of redeeming points for hotels, you can transfer Starpoints to airline transfer partners.
Many are on a 1:1 basis such as:
- American Airlines,
- Delta Airlines,
- Alaska Airlines,
- Hawaiian Airlines,
- British Airways,
- Air Canada,
- Virgin Atlantic,
- Qatar Airways,
- Korean Air,
- Asiana Airlines,
- Jet Airways,
- Air China,
- Air Berlin,
- Japan Airlines,
- Hainan Airlines,
- Thai Airways,
- China Southern Airlines,
- Korean Airlines,
- Miles and More,
- All Nippon Airways,
- and China Eastern Airlines.
- American Airlines,
- But there's more. You get 5,000 bonus Starpoints per 20,000 Starpoints transferred to an airline transfer partner (in a single transaction).
What does it cost?:
- $95 annual fee ($0 introductory annual fee for the first year)
Who do we recommend this credit card for?:
|W Hotel Bali pool © Simon_sees (CC BY 2.0) via Flickr|
- Travelers who like to stay at Starwood hotels such as Sheraton, Westin, St Regis, W Hotels, Le Meridien, Element, Loft, or Four Points.
- Travelers who like to fly American Airlines or any of their 1:1 airline transfer partners.
Why? Because unlike most airline credit cards that only offer 1 mile per dollar spent, you can effectively earn 25% more with this card — by taking advantage of the 5,000 bonus Starpoints whenever you transfer 20,000 points to an airline transfer partner.
Apply now and earn 25,000 bonus Starpoints after you make $3,000 in purchases within the first 3 months on your new card.
What can you do with 25,000 Starpoints? You can redeem them for free hotel nights or transfer them to an airline transfer partner.
To illustrate: a free night at a “category 3” hotel costs 7,000 points a night and a mid-tier "category 4" costs 10,000 points a night.
To learn more, read our Starwood Preferred Guest Credit Card review or visit American Express' secure website to apply now.
PS: I like to save up my points and book 5 night award stays.
Here's why: if you redeem Starpoints for 5 consecutive nights at a category 3-7 hotel, the 5th night is free. So that Category 3 hotel room for 5 nights costs 28,000 Starpoints (instead of 35,000!).
Gold Delta SkyMiles
Why we like Gold Delta SkyMiles Credit Card from American Express:
- You earn Delta SkyMiles: Earn 2 miles per dollar spent on purchases made directly with Delta and 1 mile for every dollar spent on all other eligible purchases.
- You get to check your first bag free on every Delta flight.
- You get priority boarding on Delta.
What does it cost?:
- $95 annual fee ($0 intro annual fee for the first year)
Who do we recommend this credit card for?:
|© dosenphoto (CC BY 2.0) via Flickr|
- Frequent Delta flyers
Apply now and earn 30,000 bonus miles after you make $1,000 in purchases within the first 3 months on your new card.
Where can you go with 30,000 miles? You can book one-way award tickets for travel within the Continental U.S., Alaska, and Canada starting at 10,000 miles (plus taxes and fees).
To learn more, read our Gold Delta SkyMiles review or visit American Express' secure website to apply now.
Ink Business Preferred
Ink Business Preferred lets you earn 80,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening. 80,000 points is worth $1,000 toward travel when you redeem via Chase Ultimate Rewards. Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases - with no limit to the amount you can earn. There are no foreign transaction fees. There is a $95 annual fee.
An Investment in Yourself
In life, you get what you pay for. The 5 cards I mentioned above are a great starting point in the world of premium credit cards.
To learn more about the cards, click the links above to visit the issuer's website. Terms and limitations apply.
Charles Tran is the founder of CreditDonkey, a credit card comparison and financial education website. Write to Charles Tran at firstname.lastname@example.org. Our data-driven analysis has been recognized by major news outlets across the country and has helped consumers make savvy financial and lifestyle decisions.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. This site may be compensated through the Advertiser's affiliate programs.
Disclaimer: The information for the Ink Business Preferred Credit Card has been collected independently by CreditDonkey. The card details on this page have not been reviewed or provided by the card issuer.