How to Tell if a Credit Card With an Annual Fee Is Worth It | Cleveland Bradley County Teachers Federal Credit Union

When it comes to credit cards, there are certainly no shortage of options to choose from out there! Because of this, the credit card market has gotten competitive—with companies doing everything from incentivizing signups to offering incredible perks, there are many benefits you can reap the rewards of.

If you commit to using a credit card for necessities and paying it off in full every month, it can be a great way to take advantage of these perks and get a little extra cash in the process.

However, one element of the modern credit card is designed to offset the cost of providing all these bonuses to customers: the annual fee. While not all cards have an annual fee, the ones that do typically have plenty of enticing offerings that are supposed to offset it—but how do you know if it does for sure?

Read on for tips on how to find out!

How to Tell When a Credit Card’s Annual Fee is Worth the Cost

You will earn more cash back (even after subtracting the fee). Getting cash back is one of the main perks of using a credit card for regular expenses these days, and some cards offer as much as 5% cash back on specific spending categories—which sounds like a great deal! However, when comparing a high-return card with a card with a lower cash back rate and no annual fee, it is important to consider how much cash back you will earn with the annual fee subtracted. If it is the same amount or close to it, it is likely not worth the extra expense.

The card has non-monetary perks that provide value. In addition to cash back offerings, many credit cards provide perks that do not translate to a monetary value but still offer a nice perk. For example, many travel-focused cards will offer free travel insurance, airplane lounge access and more—so if these types of things have value for you, that is worth factoring in as well.

You are signing up for another credit card anyway. As with all things in life, no matter how good a deal is, you are not saving money if you are buying something you do not need! Managing multiple credit cards can be tough, so if you are not already planning on signing up for a new one, it will likely be best to wait until you have a need for a new card to consider any options.

If you are interested in more money management tips, we would love to chat! We have a variety of account options designed to help you stay organized. Contact us today to learn more.