**Premium Travel Credit Card Fees Are Rising: Should You Still Pay for Perks?**
In recent years, consumers have seen the annual fees for some of the most popular premium travel rewards credit cards climb to new heights. Major issuers like American Express, Chase, and Citi are leading the way, justifying these higher costs with expanded perks and rewards. However, with such steep fees, financial experts caution that consumers must carefully weigh whether these cards are still worth the price.
**Premium Card Annual Fees Are Up Sharply**
On Thursday, American Express announced that both the consumer and business versions of its flagship Platinum credit card will now cost $895 annually—a significant 29% jump from the previous fee of $695. Just a month earlier, Chase increased the annual fee on its popular Sapphire Reserve card from $550 to $795, representing a staggering 45% hike. Meanwhile, Citi introduced the Citi Strata Elite, a new premium travel card, at $595 per year.
These aren’t isolated incidents. Across the credit card industry, premium travel cards are raising fees and, in some cases, restricting access to once-standard perks. For example, earlier this year, Capital One revised its lounge access policy: Venture X Rewards and Venture X Business cardholders, who pay $395 per year, will lose complimentary guest privileges at airport lounges starting in February.
**Why Are Fees Increasing?**
Credit card issuers have been steadily increasing annual fees for premium travel cards, arguing that these changes reflect expanded benefits, such as airport lounge access, travel credits, elite status with airlines or hotels, and generous sign-up bonuses. Many of these perks are designed to appeal to frequent travelers seeking luxury and convenience. Nevertheless, higher annual fees mean the cost-benefit analysis for consumers is more important than ever.
Ted Rossman, a senior industry analyst at Bankrate, says that annual fees are not “inherently bad,” but consumers must ensure they’re getting enough value from the card to justify the expense. “It’s getting harder to maximize, though,” Rossman notes, especially as the cost of holding these cards rises and some perks become more restricted.
**The Hidden Cost: Interest Rates on Premium Cards**
Beyond annual fees, premium travel cards often carry higher interest rates than standard cards. While the average credit card annual percentage rate (APR) hovers around 20%, rates on premium travel cards can be closer to 25% or even 30%. This makes carrying a balance on these cards especially costly.
Sally French, a travel expert at NerdWallet, cautions that anyone who cannot pay off their balance in full each month is unlikely to get good value from a premium rewards card. “Any interest that you owe will easily diminish the value of any of these benefits,” she says. In other words, if you tend to carry debt from month to month, the rewards and perks may not outweigh the interest payments and fees.
**Types of Travel Credit Cards: Co-Branded vs. General**
When evaluating travel credit cards, it’s important to distinguish between two main types: co-branded and general travel cards.
**Co-Branded Travel Cards** are tied to specific airlines, hotel chains, or cruise lines. They typically offer benefits that are most valuable when used with that particular brand. For example, an airline co-branded card might include perks like free checked bags, priority boarding, in-flight discounts, or the ability to earn points faster on that carrier. If you are loyal to a specific airline or hotel chain and travel with them frequently, these cards can offer significant value.
However, the benefits are usually limited to that brand. “It’s only free checked bags on that airline,” French points out. For instance, a Southwest Airlines credit card will not offer you benefits when flying with United or Delta. Some airlines are members of broader alliances like Star Alliance, Oneworld, or SkyTeam, which can expand your options for redeeming points or miles, but the best perks usually remain brand-specific.
**General Travel Credit Cards**, on the other hand, are not tied to a single airline or hotel chain. These cards typically offer rewards points that can be redeemed with a variety of travel partners or used for general travel expenses. According to French, these are ideal for people who do not want to be “married to a specific brand,” as they offer greater flexibility in how and where you earn and redeem rewards.
**Annual Fees: What Are You Really Paying For?**