Business & Investment

Credit card: Benefits and annual membership fees

You’ll be accustomed to being flooded with credit card ads every time you turn on your TV, check your email, or fly.

Many of these ads promise cheap vacations, free flights, or hundreds of dollars in cash back as long as you apply for a credit card.

But are these claims true? Can a small plastic card really give you that kind of perk?

The answer is…

sometimes.

It really depends on which card you get and how you use it.

After all, credit card companies are trying to make money.

They do this in several ways.

One is to charge a ridiculous amount of interest on your credit card balance …

… But you don’t have to worry about it because you read it Articles about credit cards And you always know that you should pay back your credit card in full every month.

Another big way for credit card companies to make money is with annual fees.

Your annual fee may be $ 30, $ 100, or hundreds of dollars … or you may not have any annual fees!

Before deciding which credit card to apply for, it is important to check if the card has an annual fee.

Also, if there is an annual fee, you need to determine if the benefits offered by the card are worth the fee you have to pay each year.

So today we’ll look at three real credit cards and talk about whether each one is worth you.

One uses the point-based award system, one uses the cashback award system, and the other is a travel award card.

let’s start!

Point system reward

City Premier Mastercard

Annual fee: $ 95

advantage:

  • 3 points for every $ 1 spent at the restaurant
  • 3 points for every $ 1 spent in the supermarket
  • 3 points for every $ 1 spent at a gas station
  • 3 points for every dollar spent on a flight
  • 3 points for every $ 1 spent at the hotel
  • 1 point for every $ 1 spent on all other purchases
  • $ 100 off annual hotel stays over $ 500
  • No foreign transaction fees
  • You can transfer your points to the airline’s loyalty program, redeem them on Amazon or BestBuy.com, or redeem them for gift cards.

For more information

Earn points incredibly fast with the City Premier Card.

Earn 3 points per dollar for almost all categories and 1 point per dollar for all other purchases.

These points earned can be used for shopping at Amazon or Best Buy, or redeemed for gift cards.

You can also transfer your points to eligible airline loyalty programs.

Keep in mind that for most credit cards, 100 points is equivalent to a reward of about $ 1.

Therefore, with the City Premier Card, you will have to spend between about $ 3,200 and $ 9,500 per year to cover your annual membership fees.

Of course, if you choose to take advantage of this benefit, a $ 100 discount on hotel stays worth at least $ 500 will also cover your annual fee.

Citi is currently running a sign-up promotion to earn 80,000 points when spending $ 4,000 on a card during the first three months of opening an account.

Cashback reward

Chase Freedom Unlimited Visa Card

Annual membership fee: None

advantage:

  • 5% cash back on trips purchased through Ultimate Rewards
  • 3% cash back on drugstore purchases
  • 3% cash back on meal purchases
  • 1.5% cash back on all other purchases
  • Rent-a-car collision damage compensation
  • Travel cancellation insurance

For more information

Cashback cards generally do not require an annual membership fee. This is great news for you.

The amount of cashback you receive from your credit card purchase is automatically tracked by your credit card company.

When you are ready to take advantage of cashback benefits, you will usually receive cash in the form of statement credits. This will reduce the amount you have to pay with your credit card statement.

In some cases, you can also receive a check or bank transfer instead.

Chase also runs a sign-up promotion that offers $ 200 cashback when you spend $ 500 on your card during the first three months. Also, for the first year, you’ll get 5% cash back on grocery purchases (excluding Walmart and Target).

You can get a 0% APR for the first 15 months, but that’s not a problem as you pay off your credit card balance in full each month.

One of the obvious advantages of the Chase Freedom Unlimited card is that there is no annual fee.

If you don’t think it’s worth paying your credit card each year, a cashback card like this might be a good choice.

Not all of the special travel awards you get with a travel award card are available, and you can’t buy products at a discounted price like a card with a points award system, but you can use them for free. Money just to use the card!

Travel rewards

City AAdvantage Platinum Select World Elite Mastercard

Annual membership fee: $ 99

advantage:

  • 1 free check bag on American Airlines flights (applies to you and up to 4 companions)
  • Board an American Airlines flight with a previous group
  • 25% Off Food and Drink on American Airlines Flights
  • Earn 2 miles for every $ 1 spent on restaurants, gas stations and American Airlines flights
  • Earn 1 mile for every dollar you spend on other purchases
  • No foreign transaction fees

For more information

This American Airlines credit card is a great example of a travel award card that applies awards to a particular company.

This card grants “miles” that can be used to purchase flights, cars, hotels, seat upgrades and other awards instead of the cashback reward system.

It may seem like you’re getting a stick short end with a card whose rewards are only available to one company, but that’s not always the case.

Most credit cards offer additional rewards for purchases at restaurants, gas stations, and / or grocery stores.

However, with this particular card, you can earn double miles when you buy an American Airlines flight or on one of the flights.

If you don’t travel often or you don’t fly with American Airlines all the time, these rewards may not be for you.

But if Americans are the airline of your choice, you’re in luck.

For example, if you live in or near Charlotte (Charlotte Airport is an American hub), or if your flights are always connected via Charlotte, you may use American Airlines frequently.

If you travel a lot and you spend most of your time with Americans, a card like this will give you miles that will really earn you in the long run.

Not to mention the benefits of having a free check bag.

Checking bags on American Airlines usually costs $ 30 per flight.

Therefore, if you use a check bag to fly two round trips in the United States, you have already paid the annual fee.

This may not be the case if you tend to travel lightly, but if you have packed a lot of luggage and need to check your bag, or if you have items that are prohibited from being stored in carry-on baggage. Very useful if you need to transport. bag.

The benefits of early boarding may not be a big deal, but what makes the card more attractive is non-monetary benefits!

In addition, most of the time this card has a sign-up promotion.

You can now earn 50,000 miles by signing up for your card and using it with a $ 2,500 purchase in the first three months. You will also be exempt from the $ 99 annual fee for the first year.

This can be a great promotion to take advantage of, even if you don’t plan to use your card very often.

Before applying

One of the most important things to consider before applying for a credit card is your credit score.

Some cards require a good or good credit score for approval, while some are intended for individuals with a fair credit score.

Recommended to use Credit karma To help you find the right card for your credit score. Credit Karma provides weekly updates to your credit score and recommends a credit card that you are likely to approve.

Final idea

Whether a credit card is suitable for you depends entirely on how much you use the card and what purchases you make with it.

If you have signed up for a travel award card but have never purchased a flight or stayed at a hotel, you may be wasting money on your annual membership fees.

If you sign up for a rewards card but don’t use it often, the points you earn may not be enough to cover your annual membership fees.

If you don’t plan to buy a lot with your credit card, we recommend signing up with no annual fee. That way you can collect some rewards without worrying about losing money!

Credit card: Benefits and annual membership fees

https://www.wallstreetsurvivor.com/credit-cards-benefits-vs-annual-fees/ Credit card: Benefits and annual membership fees

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