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That’s over $100 a month in fees, but what do I get in return?
I carry the Chase Sapphire Reserve ($450), Citi Prestige($350), and Amex Business Platinum ($450) at the same time. Some of the benefits of these cards cross over, but even with the redundancy I am net positive when it comes to the value of benefits I use for the year. A lot of people cancel cards when the annual fees come due, and I’m certainly not advocating keeping a card that isn’t valuable, but your analysis shouldn’t be based on the fee, but rather the “value” of the card. I’ll walk you through my thinking and how I end up turning a “profit” on $1250 a year in fees.
The biggest crossover benefit between the 3 cards is the Priority Pass membership.
So let’s just pro-rate that across 3 cards. A normal membership cost $450 a year, but we’d never pay retail. Let’s value that benefit at $150, or $50 per card.
The Chase Sapphire Reserve:
I unfortunately missed out on the 100k sign up, but was able to lock in a 50k offer a couple of weeks ago. In addition to that I applied after the annual fee credit changed from calendar year to cardmember year. This means that instead of earning $600 in travel credit my first cardmember year like those who signed up earlier, I’ll earn just $300.
The annual fee is $450.
- 50k = $750 in travel redemptions thru the Chase Travel.
- $300 travel credit
- $50 for Priority Pass membership
- 3x points on all dining, 1 point more than Sapphire Preferred
- If I spend $300 a month on dining that is 3600 a year more in points. Or $54 in redemptions thru Chase Travel
The first year of the card I will earn $1154 in benefits. Ongoing I’d earn roughly $405 a year knocking the fee down to just $44. That is $50 less than I’d pay to keep a Sapphire Preferred open. A no-brainer. Now that you can only carry a Reserve or a Preferred it doesn’t make sense keeping anything but the Reserve at this moment.
I have Citi Priority which knocks my annual fee down to $350 from $450 which helps with the value proposition.
- Annual $250 airline credit. ( the first year I received $500 because I straddled years. 2nd year will earn $250. So that’s $750 over 24 months of card ownership)
- $50 Pro-rated Priority Pass
- Free 4th night on 4 night+ stays.
In order to end up ahead the 4th night free benefit only has to be worth $50. I know in the next year I’ll be able to take advantage of this benefit and extract value over $50. In addition to this, I have to keep in mind the Citi 24 month rule. If I were to close this card I would reset the clock on getting a sign up bonus again. The opportunity cost then is another sign up bonus on either the Citi Premier or Prestige in July of 2018.
I did an analysis of why I was keeping the Citi Prestige for another year if you’d like to read more on it.
Amex Business Platinum
I maintain an Amex Business Platinum which still has a $450 annual fee. Hopefully this won’t pop up to $550, like the personal versions, before my annual fee hits in December.
- Airline fee Reimbursement – $200 a year fee reimbursement on incidentals.
- 10 GoGo free wifi passes – $200
- ( I value these at $10 each. Usually the pass is much more than this, but we’ll be conservative)
- Referrals – over the last 12 months I’ve received 100k in referral points
- Priority Pass – $50
Taking the referral points out of it, which are worth $1500 ( valuing Amex points at 1.5 cents – the valuation with a 35% bonus refund when booking revenue tickets through Amex travel) I’m still breaking even on the card. This is without taking into consideration Amex FHR, Centurion Lounge access, or Amex offers.
If Amex continues to incentivize ownerships with Baller referrals I’d be silly to ever get rid of this card. I will say that the spend requirement on the current offer has deterred everyone I know that would have otherwise been interested. 20k spend in 3 months is hefty.
Annual fees are hard to swallow, and always request a retention offer, but paying one may end up earning you more in value than you’re spending upfront.