Increased charges for high-end credit cards: Who still finds value in these financial assets?
Premium Credit Cards: A Strategic Choice for Frequent Travelers
Getting a transferable points credit card from one of the big banks can be a wise move for points beginners. However, for those who carry a balance, premium credit cards with their high interest rates may not be the best option.
Credit card companies are increasingly targeting younger consumers with lower spending, offering perks to encourage them to use their cards for everything. Some examples of premium cards with high annual fees include Chase's new premium card at $795, Citibank's new premium card at $595, and American Express' platinum card at $695.
But what do these premium cards offer that justifies their high fees? Beyond the common benefits of airport lounge access, premium credit cards provide a range of valuable perks.
These perks include generous travel credits, such as up to $300 or more annually that offset the annual fee by reimbursing travel-related expenses. There are also reward points bonuses and higher earning rates on travel and dining purchases, often with accelerated points. Premium credit cards also offer elite status and upgrades within hotel and airline loyalty programs, multiple airport lounge network access, additional luxury perks, and flexible points redemption options.
These cards are ideal for travelers who spend enough annually on travel expenses and value premium experiences that justify the cost, such as extensive lounge access, travel credits, elite status recognition, and high-tier rewards. They are less advantageous for infrequent travelers or those unable to leverage the numerous benefits offered.
Some examples of notable premium cards and their special advantages include The Platinum Card® from American Express, Chase Sapphire Reserve®, Citi Strata Elite℠ Card, Hilton Honors American Express Aspire, and Marriott Bonvoy Brilliant® American Express.
In conclusion, premium credit cards are worthwhile when the cardholder can capitalize on the broad set of travel, credit, rewards, and status benefits to effectively offset or exceed the high annual fees. Otherwise, less expensive cards might offer better value.
Brian Kelly, founder of The Points Guy, suggests starting with a transferable points credit card, but not necessarily a premium card with a high annual fee. It's not advisable to stick with a co-brand card from a specific airline in 2025, as you want points that can transfer to multiple partners.
Chase Sapphire now offers StubHub credits as a perk for its premium cardholders, adding to the value of these cards. The value of credits offered by premium cards depends on individual spending habits and preferences. It's recommended to get a credit card with a bank like Chase Sapphire, Amex Gold, or Capital One Venture X, as they offer transferable points to various airlines and hotels.
If you're not using lounges and don't want statement credits, premium cards might not be for you. The Chase premium card's lounge access and credits can make it a good deal for some consumers, despite the high annual fee. Beyond the annual fee, the Chase premium card includes lounge access and allows two guests.
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