Credit Cards: High Fee? No Problem.

I have a confession. I have 12 credit cards. That’s right, TWELVE.

Some of my cards have no annual fees, but for those that do, my total annual fee is over $1,000. But how much do I actually pay? $20. How do I do this? I’ll show you…

Each card has a special use; through careful management, I extract maximum value from them. This means reducing their fees to near zero.

I’ll dive into 2 of these cards, and show you why their hefty fees don’t scare me.

DISCLAIMER: First off, I pay each card in full every month, and I automate the process. If I didn’t pay off each month, the value of the cards ceases and I might as well give all my money to the bank.

Travel Card

My main travel card is a Chase Sapphire Reserve with an annual fee of $550. Whenever I pay for a travel expenditure, they immediately refund me, up to $300 each calendar year. The effective fee is now $500-$300 = $250.

Currently, they also provide an Instacart credit of $15 each month. I make full use of this as I grocery shop often, so 12 x $15 = $180. The effective fee is now $250-$180 = $70.

Currently, they are giving monthly $5 credit for using DoorDash. I discovered I use this app only for this credit. It simply covers one lunch per month. Sp, 12 x $5 = $60. My effective fee is now $70-$60 = $10.

The remaining $10 is more than offset by the points I get for using the card. Chase points are valued at around 1.7 cents each. If I can get at least 588 points per year, I offset the $10. (10 / .017 = 588)

This doesn’t even include all the benefits I get from the card such as primary car rental insurance, lounge access and a Global Entry credit of $100 every 4 years.

The Purchasing Giant

My main purchasing card is an Amex Gold Rewards, with a $250 annual fee. This is a charge card, meaning there is no preset spending limit, but I need to pay it off each month. This can force you to watch your spending.

The card offers $10/month credit for dining at various establishments. One of these is Shake Shack. So, every month I venture to my nearest for lunch. My effective fee is now $250 - (12x$10) = $130.

The card also offers $10/month for UberEats. I don’t care for food delivery, but I do place orders for pick-up and they provide a tiny credit for this option. Here’s another $10 credit for lunch. My effective fee is now $130-(12 x $10) = $10. Again, the benefits I didn’t mention more than makeup for any remaining fee, including the points I get and their value. But that’s for another post.

Be Careful

If I didn’t care about making up for the fees or have a plan in place, I would pay over $1,000 EACH YEAR for simply holding these cards. But through careful planning, and maximizing the benefits of each card, I can little that $1000 down to $20.

You should always read the fine print, and in this case, I’m careful about when to spend, how to do it, and reduce those large fees to almost nothing. If you are considering a large annual fee card, investigate all the ways you can reduce the fee, obtain credits or make it less scary.

The bank is already charging you for the fee. Don’t let them get away with it!

Save On,

Chris