I have a credit card with a $699 annual fee

Hello PF blogosphere, I am committing a grave personal finance sin to be added to the list here and paying for credit card. There’s no-fee credit cards all over the place, so why would someone choose a card with a fee — and an astronomical one at that?

Earlier this year, I got the MBNA cash-back card and for the most part, it’s been great. However, recently they changed some of their rewards criteria which made the card less valuable to me, namely setting a cap on their 1% cash-back to spending of $1,250 per month.

I spend on average $2,500 per month on my credit card, with some months as high as $4,000 to $5,000.

This is a combination of both work and personal spending, and as a result I was getting a $50 cheque in the mail as a cash-back reward approximately every 2 months. However, MBNA’s new rules means this would get cut back to about every 4 months. While I appreciate that the MBNA is still a no-fee card, it’s now offering me considerably less for using it.

So I went out at got a American Express Platinum card.

Now, you’ve probably already guessed that I’ve been eyeing the Platinum card ever since I learned about the elusive black Amex/Centurion Card. While I still can’t stomach paying that annual fee for that titanium beast, I am wholly enchanted with the prospect of qualifying for that card — mostly so I can screech “I AM THE 1%” and post photos on Rich Kids of Instagram and do other such superficial things that are all part of being in a pissing contest with rich people. The Platinum Amex is my gateway drug to douchey affluence.

Just kidding… mostly.

The card was actually recommended by a coworker who uses it regularly on our business trips. Once she told me all the rewards she was receiving, I was sold.


  • $200 annual travel credit that can be applied to things like airfare and hotel stays.
  • 1.25 reward points which never expire (unlike stupid airmiles!) for every dollar spent that can be redeemed for travel and other things.
  • TRAVEL INSURANCE. Including travel health insurance and baggage insurance, as well as flight delay and cancellation insurance (which I need, because god knows I never pay for it and I nearly missed my connection to Amsterdam at the Heathrow airport this year)
  • PURCHASE PROTECTION. Up to $50,000 per calendar year for purchases on the card that end up broken, lost or stolen — or even items you can’t return to the store for a refund.
  • Complimentary room upgrades and complimentary nights at luxury hotels, plus little perks like late check-outs and gift-cards to in-house hotel restaurants and spas.
  • Complimentary access to airport lounges.
  • Complimentary or discount companion tickets for first or business class international flights — if you were around for my twitter rant in July, you already know I’m never sitting in coach/economy class on an international flight ever again.
  • Complimentary enrolment in various car rental and hotel member programs.
  • “Front of the Line” access to pre-sale concert tickets to ensure the Maroon 5 debacle never happens again.


  • Annual fee of $699.
  • Some places don’t take American Express (which is why I won’t be cancelling my MBNA card)
  • Strict income and credit requirements to qualify for the card.

 Why the American Express Platinum card makes sense for me

– I travel a ton, both for work and for pleasure. This results in a lot of hanging out in airports, lots of hotel stays and lots of car rentals. I’m no jet-setting executive, but it adds up.

– When I travel for work, I stay at hotels like the Four Seasons and it’s not unusual for me to extend my stay at these places with some vacation days. While I could pick out a hostel or even a budget hotel wherever I am, I usually splurge and stay at the luxury hotel I’m already at. YOLO!

– I’m way more about enjoying my money than hoarding it, so I’d rather opt for a perk like a hotel room upgrade in lieu of a cash-back program, even though I’d never actually pay out of pocket for a room upgrade (does that even make sense? whatevs.)

The math:

$699 annual fee - $200 travel credit = $499 of rewards required to be obtained every year to break even on the card.

If I spend $3,000 on the card in the first three months I’ll receive 60,000 points, which translates directly into 2 round-trip tickets within Canada or $500 in gift cards at stores like Coach or Banana Republic. I will not disclose how much I’ve spent at those places in 2012 but rest assured, it’s more than $500.

In short, the card will pay for itself the first year.

… but I’ll need to keep track of my usage and the rewards I get from it to see if this will be a long-term relationship. If the perks are not with the price, I’ll cancel the card so fast Amex won’t know what hit them, but for right now, I stand to reap some cool rewards.

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  1. “If I spend $3,000 on the card in the first three months I’ll receive 60,000 points, which translates directly into 2 round-trip tickets within Canada.”

    But two round-trip tickets within Canada retail far less than $3K…

  2. I love Amex! I know you travel a lot but if you are looking for a low fee card with lots of cash back, I would look into Blue Cash Preferred Card from Amex. They only charge $75 a year and I make almost $90 from the every month in cash back credit. The reward structure is insane and I have not been able to find anything similar anywhere else.

    • Is that available in Canada? Sometimes I find credit cards really differ across the board. Like in the USA there’s so many cards with interest rates at 5: and 8% whereas I feel like all of them here are at 19%

  3. John S @ Frugal Rules says:

    We just our first Amex card. Thankfully it does not have a fee and has a really good reward program. The $699 does seem steep, BUT it sounds like you’d really benefit from it with all of the travelling you do. If you get a good value from it, then go for it.

  4. I think this is kind of crazy, but I have problems paying any annual fee for a credit card for some reason, even if the cash-back balances it out in the end. Maybe for my next credit card, I’ll consider it after running the numbers.

    Do you plan on using your credit card just as much if merchants start charging a fee to use it?

  5. I wondered.who uses these cards but now that you have spelled it out it at least makes sense for the first year. I have a Visa Black card on my blog and I wondered if anyone ever sign up for cards with $495 plus annual fees. As long as you get more value than the fee I see no problem with it.

    • Yeah I definitely had to do the math for it. It’s really the hotel upgrades that made me go for it. Work books these hotels for me and then I stay a bit longer for fun, and with this card I get room upgrades, complimentary nights and gift cards to the hotel spa/restaurant. I think that will be the biggest payoff.

  6. Until the end of this month you can call MBNA and upgrade to a Smart Cash World Mastercard which is still no-fee but eliminates $1250 spending cap and gets you 5% cash back on gas/groceries for another 6 months.

  7. It looks like Amex is changing how the rewards work on that card next year (cap on the 6% based on your anniversary date after 1/15/13). So I would double check that in the future to make sure they aren’t screwing you over with the new version.

    The US Bank Cash+ looks promising and you earn about 6.25% if you use it correctly and it has no annual fee, so that might be a nice alternative.

  8. My reply was supposed to be to Debt and The Girl, but apparently my work computer when bonkers… sorry

  9. That is a pretty crazy fee! I’m always a bit suspicious of my ability to properly convert non-cash rewards to their cash equivalent so I’m hesitant about using cards with a fee that aren’t cash back. Do you pay for work travel stuff up front and then get reimbursed? That can really run up your spending and rewards.

    • Yah, I charge all my flights, hotel stays and car rentals (and food!) to my personal credit card and then I’m reimbursed by work. That’s what nets me so many points!

  10. That fee LOOKS crazy but it really seems like you would make out very well being a heavy traveler! If you value the airline upgrades and companion tickets it looks like a lot of great rewards if you put that much on your card. I would make sure that most places you spend accept it beforehand though.

    • So far I’ve only had 2 places not take it: a restaurant and a grocery store. Everywhere else has been great! I redirected all my automatic bills to it, then bought concert tickets, electronics, groceries (from a store that accepted it!) and went out to dinner a few times and it’s been accepted at all those places so far =)

  11. “gateway drug to douchey affluence” = awesome statement, haha. The MBNA card is irking me as well, we used to get a cheque approx every five weeks (calculated by spending, not by timing of cheque receipt). We got a different card through our bank and have been using that as the primary card for awhile, it returns at a much better rate now. We’re probably going to give up an cancel the MBNA one.
    Enjoy your new card – those perks at hte beginning sound sweet :-) Do you ever have issues with places not accepting Amex? In university, it was only good at the grocery store, pretty much nowhere else took them.

    • So far everywhere has taken it with the exception of Superstore and a bar lol I keep my debit card and the MBNA card on me just in case the Amex isn’t accepted, but ultimately I want to charge as much as I can to this card to max out the rewards.

  12. That sure is some fee.. But I guess you’ve done the math, and since you are travelling so much already, I guess It wouldnt hurt to try for one year. But make sure to keep track on everything!

  13. grownupandstuff says:

    I get what you’re saying but I’d still be helluva uncomfortable paying that much. It’s good that you’ve done the math, but if you were to pay $200 and then save that extra $499 a year to an RRSP then at least you’re definitely going to make use of it, rather than those years when you might not scrape up all the benefits to break even! The first year is definitely the best with that big points injection though.

    We pay $125 for the BNC Platinum and we’re very happy getting about 5-6x that back in rewards. (includes the purchase protection, travel points and automatic travel insurance)

  14. Dang! You a Baller! :)
    So far we only have 2 credit cards totaling to $4k credit line. We have a cash back discover card, and one bank credit card. I like the discover card. I don’t like the bank card. I only got it because I needed to build my credit (I had none). And my banker made it feasible to get a credit card. The rewards suck. I’m actually looking for another rewards card.

  15. You’ve got your head on your shoulders. Enjoy all the new perks!

  16. $699 does sound steep. My wife and I use a Perkstreet debit card that gives up to 2% cash back with no annual fees. It works out really well and we enjoy getting money back instead of points for our everyday purchases.

  17. Sounds like you’ve though it through. Oh and I love this line “gateway drug to douchey affluence.”. Hopefully you’ll still hang out with us plebs.. :)

  18. That fee is way too steep for me, but at least you did the math. If it works for you, then it wouldn’t matter what I said anyways. I don’t like fee cards because they banks get nice fees anyway if you don’t pay your bill on time. The fee does create a quality user base though.

  19. The fee doe seem high, but the rewards seem awesome!

  20. Whoa girl — what do you do for a living that allows you to travel so much?

    • I have a really unique job =\ It’s hard to explain. Essentially I visit major Canadian cities (Vancouver, Toronto, Calgary) 1-2 times each per year. It’s nowhere exotic (yet!) but it works out to a lot of time on the road.. + my personal travel!

  21. I think I only spend $3000 on my credit cards combined, so even though mine don’t really have great rewards (Scene points anyone?), I probably won’t switch them for a while. But if I had to travel a lot for work, then I’d definitely look into a card like the one you have.

  22. I save good for you! Far too few people do the cost benefit analysis of choosing the best credit card for them in terms of overall rewards after the annual fee is taken into consideration. I think this is very short sighted.

    You have a great deal going at least for the first year and you can easily crunch the numbers after that and see if it works out in your favour to keep it for subsequent years.

    Ignore all the naysayers, you did the right thing!

  23. Sounds like a good fit for you. For me it would just encourage me to continue to spend heaps of money to get rewards so I could justify further spending. I’d prefer to just opt out of the whole game.

    • That is definitely one of my concerns but one of the things I like about this card is the full balance is due at the end of the month, or the interest rate becomes 30%. On other cards if I’m a few days late I don’t care, because what’s $5 in interest? (I know, I am the worst) But with this one I will NEVER EVER be late or EVER spend more than I have.

  24. It strangely makes sense! Especially if some of your company expenses get you rewards before you are reimbursed for it!

  25. Nnng, I want one of these so badly but I don’t think it’s the right decision for me…possibly ever. I JUST WANT THE FREE STUFF (even though I know it’s not actually free, haha)!

  26. Some of those benefits sound really enticing. It’s pretty big fee, but it looks like the card is worth it if you do a lot of traveling and spending. Besides, you’re making the appropriate income now to have a premium credit card. I should get an American Express card too. Maybe not the same one you have, but I shop at Costco and they don’t take any other credit cards.

  27. WOW. What an astounding lack of knowledge about how the world of money works. Pretty much everything that’s wrong with our country can be traced back in some way to the kind of lefty, post-modernist and feminist garbage Bridget believes in. There is no need for any other party in Ottawa besides the Conservative Party; and the only time the Conservatives have done wrong is by doing something that’s ideologically left-wing.

    Feminism has never done anything to make womens’ life better.

    Left-wing perverts and sickos like Bridget have been riding the public gravy train for too long. I don’t want our credit system to acknowledge such an ignoramus. I’ve seen her blog and it is insidious and disgusting. She doesn’t address ideas she disagrees with, rather she attacks the identities that hold them.

    Her left-wing hatred & ignorance is dividing our country and it shows in her vitriolic and self-aggrandizing ranting. Every other sentence on “I have a credit card with a $699 annual fee” begins with “I” and I think that’s clearly a sign of mental unwellness. Healthy people don’t think about themselves obsessively the way Bridget does. Forget about her stupid credit card! – She is just being totally guided by her ideology, her partisanship and her Marxism anyhow.

    And I was also disgusted by how she shamelessly shows an underage down syndrome child consuming alcohol.

    Please apologize for yourself Bridget or at least this latest post.

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