Are Credit Card Annual Fees Ever Worth Paying? I Say Yes: The Case for Pre-Paying Vacations at 90%+ Discounts

In the last part of my recent vacation post highlighting the true price – in terms of miles, points and dollars – I included in the overall monetary cost the annual fees from some of my credit cards. Since I was using the points or miles gained – the black line of the ledger – I felt it was necessary and proper to include the red side, too.

I have come a long way on annual fees. My father, even when I had no concept of credit cards, preached that paying an annual fee was stupid – why would you pay a bank to spend your money, especially since the bank makes money on each credit card purchase? In other words, the bank was making money coming and going, while you received nothing. The world of big points reoriented his view.

Now, we look at the annual fee as a vacation pre-payment, like an even more extremely-priced Hotwire, but with the selection of Orbitz or Travelocity. For instance, I booked 2 nights in Paris using Club Carlson points earned from a Club Carlson credit card signup bonus at a hotel that goes for €520 euro, or $689, according to XE. The two nights costs 100,000 points because it’s Category 6 hotel (award chart here) but since I have the credit card, I get the last night, or 50,000 points, refunded – a two-for-one deal (This is a bonus only available to cardholders)! The annual fee on the Club Carlson credit card is $50. So, I look at it as paying $25 a night for a room that costs almost $700, or 3.5% of the real price. I’m getting a 96.5% discount!

However, the caveat is on no planet, in this galaxy, do I have the ability to drop $700 on a hotel room. I’d rather pay rent for the whole month, instead. So let’s compare the $25 I would be paying for the Marriott Opera Ambassador to something I can afford – a hostel!

I went to the Hostel World website and input the city – Paris, dates – Sept 17-19, and guest number – 1. The hostels below, as you can view, are all more expensive than my hotel. Some are even twice as expensive!!

Hostels are fun, generally, and clean, sometimes, and I enjoy meeting and conversing with fellow travelers, but this vacation is about getting as much as I can for as little as possible. Since the rooms at the Marriott are larger, more luxurious and cheaper, it’s a knockout victory to the hotel.

This example uses a credit card with a pretty low annual fee – $50. Some cards have fees ranging in the hundreds of dollars, so it’s important to decide before applying for said card/s what your lodging price points. Even better, some cards waive the annual fee the first year, so it’s possible to come out totally ahead by spending nothing! So, research well and don’t spend anymore than is essential on lodging.

Thanks for reading and email me windowseatwindowsuite (at) gmail or tweet me (at) WindowSuite. Comments below are appreciated below, especially if you have stayed at this hotel before!

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