When was the last time you paid the annual fee for your credit card? Personally, I’ve never done so before. It’s one of those things you know you can get away with, especially if you’ve been using your credit card and paying your bills on time. Yet at the same time, banks religiously charge you a hefty annual fee in the hopes that you won’t check your statement.
Thankfully, most of us probably will get an annual fee waiver if we request for it. And if not, it’s not too difficult to cancel a credit card right away. Unless of course, you have instalment payments charged to your card.
But there are some instances when you can consider paying the annual fee. It might even be worthwhile doing so.
Really? When would that be?
The few cases when paying your credit card annual fee makes sense
1. When there are renewal bonuses being offered
Don’t be fooled into thinking that you should be paying the annual fee for the day-to-day rewards that your credit card gives you. Or that you need to pay for the administrative costs and convenience of using a credit card.
You should only consider paying the annual fee if the bank offers renewal bonuses. In Singapore, this usually comes in a form of air miles or reward points.
Here are some of the credit cards that come with renewal bonuses:
|Card||Annual Fee||Renewal Bonus||What’s that like?|
|DBS Altitude Visa Signature Credit Card||S$192.60||10,000 miles||51.9 miles / dollar or 1.9 cents / mile|
|DBS Altitude American Express Credit Card||S$192.60||10,000 miles||51.9 miles / dollar or 1.9 cents / mile|
|Citi PremierMiles Visa Card||S$192.60||10,000 miles||51.9 miles / dollar or 1.9 cents / mile|
The travel cards above generally offer you up to 3-10 miles per dollar, depending on what you’re paying for and whether you’re using one of their merchant partners. As you can easily tell, paying the annual fee gives you a whopping 50 miles/dollar, a huge step up from the usual earning rate.
If you were to consider the cost per mile, you’ll also realise that 1.9 cents per mile is not a bad deal. You’re likely to get a higher value from your miles redemptions even on some economy flights, and almost certainly on business class or first class flights.
2. When there are extra benefits only if you pay the annual fee
Not all of us enjoy playing the miles game. Well for those of us, there are other cards that offer other incentives in exchange for the annual fee.
The American Express Platinum Credit Card:
The American Express Platinum Credit Card is one such card. One of the best reasons to get the American Express Platinum Credit Card is the Love Dining programme. The dining programme entitles you to up to 50% off some of Singapore’s finest restaurants in hotels and beyond. If you’re a foodie and can afford these experiences, you’ll find making back your annual fee a breeze.
When you first sign up for the American Express Platinum Credit Card, you’ll also get a set of vouchers to get discounted room rates at the Swissotel and Fairmont, complimentary room upgrades, as well as more 50% off dining vouchers. These vouchers won’t be sent to you again if you choose not to pay the S$321 annual fee after the first year.
American Express Singapore Airlines KrisFlyer Ascend Card:
Another card from American Express that gives you an incentive to pay the annual fee is the Singapore Airlines KrisFlyer Ascend Card. When you pay the annual fee upon sign up, you’ll get benefits such as a complimentary night’s stay with Hilton Properties in Asia Pacific, and 4 free passes to participating SATS Premier and Plaza Premium Lounge.
When you renew your card membership, you get the hotel stay and airport lounge passes again. At a cost of S$337.05 a year, the membership feels a little expensive. That said, I have personally been offered a 50% discount on the annual fee, while still getting the complimentary stay and lounge access.
3. When there are amazing welcome gifts
The last scenario is when there are great sign-up gifts available only when you pay the annual fee. Here are a few:
|Card||Annual Fee||Welcome Gift||What’s that like?|
|HSBC Visa Infinite Card||S$650||35,000 air miles||1.85 cents / mile|
|Standard Chartered Visa Infinite Credit Card||S$588.50||35,000 air miles||1.68 cents/mile|
|Citi Prestige Card||S$535||25,000 air miles||2.14 cents / mile|
|UOB Visa Infinite Card||S$642||TUMI V3 luggage and packing cube worth S$1,010 (New-to-UOB card applicants)||A slightly cheaper way to buy the TUMI V3, which can be bought at S$870 on Lazada|
|DBS Insignia Visa Infinite Card||S$3,210||100,000 air miles + two-night stay at one of 40 luxury hotels and resorts in Asia||3.21 cents/mile, not yet considering how much the two-night stay might cost|
|American Express Platinum Credit Card||S$321||1 night stay at Swissotel The Stamford Singapore + B&O PLAY H5 + Samsonite Sigma 76cm Expandable Spinner||The hotel stay is complimentary upon card approval, but the other gifts require minimum spends.|
So, don’t pay your annual fee for nothing
To summarise, don’t pay your credit card’s annual fee for nothing. Make sure that you’re getting bonus miles or other benefits that are worth more than what you have to pay. These days, getting an annual fee waiver is simple. Just call up the bank and let them know that you would like a waiver. For some banks, you don’t even have to speak to a customer service officer!