I just spent some time cleaning up from one of my previous application sprees  last winter. What I found is that I’m actually keeping some of the cards with an annual fee on them! Usually I Convert Credit Cards Instead of Paying Annual Fees  or cancel them after redeeming the sign up bonus.
Until now, it was very rare that I kept an annual fee card beyond the first year. After I determined it made sense to downgrade my American Express Preferred card  to avoid the annual fee going forward (this card was previously my exception based on the math), I decided to run the math on all cards before I convert or cancel them.
I was surprised at how many I kept! Here are the cards with an annual fee that I’m keeping (and why):
I Paid an Annual Fee on These Credit Cards
IHG Rewards (Priority Club) Visa. After we used our 80,000 points  for lots of free nights, I figured I’d dump the card. However, the annual fee is $49 and comes with an annual free night certificate. $49 for a hotel room at a nice place is a steal! We’re going to redeem our free night at the Palazzo in Las Vegas. In addition, the card comes with a 10% rebate on points. When you stack it with IHG point breaks hotels , you can maximize the benefits!
Citi ThankYou Premier Card. I ran the calculations on How to Maximize the Value of Your $500 Citi Premier Card Bonus . I calculated that it’s worth it to pay the annual fee in the second year. After Citi recently announced they will reduce the annual fee to $95 next month, I’ll receive a minimum of $330 in Thank You Points  for a profit of $235. It’s my go to restaurant card . I will likely downgrade this card in the third year in favor of my Fidelity 2% Cash Back Credit Card .
Starwood Personal Credit Card from American Express. We spent the holidays on a Free Trip to Steamboat . The kids loved it so much; they can’t wait to go back again next year. In order for us to earn enough Starwood points, I need to keep open one card, either the personal or the business card. They both have a $65 annual fee. While the business version comes with Open benefits, I’m going to keep open the personal card and close the business card. Why? Because you can open another business card and get the sign up bonus again. The terms state: “Welcome bonus offer not available to applicants who have or have had this product within the last 12 months.” The terms on the personal card are once in a lifetime now (even though I got it again !!!)
Club Carlson Visa Card. My boys joined a ski team this year. The team stays at Club Carlson properties. This ended up being a great use of some of my 85,000 bonus points ! With this card, we got an automatic upgrade to the executive suite and the second night free for both weekends. In addition, the renewal gives you 40,000 points (enough for the 2 night stay at the Category 4 hotel we stay at). Otherwise, we’d spend over $400 at that hotel for the weekend in a suite. For a $75 annual fee, I’ll keep it as long as we have plans to stay at those hotels each year! Although, they do have a business version, so I may look into a switch to either my husband’s account, or a business account in the future to pick up another free year!
BOA Virgin Atlantic. Normally, I wouldn’t keep this card since it has a $90 annual fee. However, they sent me a lucrative balance transfer option. Getting an offer from a current card is one of My Evolving Credit Card Arbitrage Strategies . When I factor in the annual fee, the cost of the balance transfer is about 1%. I will cancel this card next year though!
How to Track Annual Fees
I keep very detailed records about all of our credit card application sprees  on an excel spreadsheet. One tab for each spree that tracks the card through application, spending requirements, bonus redemption, adding it to Quicken  and closing the card. I added a tab to the end of the spreadsheet and have moved all of the cards above to a new tab to track cards that I’ll pay an annual fee. I’m tracking the value of the benefit, the date to reevaluate the card, and when I plan to close the card. The last thing I want to do is pay an annual fee for a calculated profit or savings, then forget to redeem the benefit!
Always Do the Math
While I never thought I’d renew a few cards with an annual fee (let alone a bunch of them!) it pays to do the math for each one. Review your needs, where you shop, what you buy, and how you redeem your cards. If you can save money on things you plan to buy anyways, it can make sense to pay an annual fee. However, if it doesn’t pay off don’t pay the annual fee!
Do you keep any annual fee credit cards? If so, which ones and why?
More on Credit Cards
- How Much Do Credit Inquiries Really Matter? 
- Avoid Joint Credit Cards to Double Your Sign Up Bonuses 
- Convert Credit Cards Instead of Paying Annual Fees 
- Tips and Tricks for Planning Credit Card Application Sprees 
- Credit Card Application Spree Q & A 
- Our Credit Limits: Over $1,000,000!