How to Use Our Credit Card Rewards Calculator
To get started, follow these three simple steps.
- Choose a card. Select a credit card from the drop-down menu. It can be a card that you currently own or one that you are interested in getting.
- Enter your monthly expenses for each category. Enter the amount you spend each month on each spending category. If you don’t keep track of your monthly bills, you can get an idea of how much you spend by reviewing your monthly credit card or banking statements.
- Hit the calculate button. Once you’ve finished entering your expenses, click the calculate button. Your results will show an estimate of the annual rewards you’ll earn from using the card and indicate whether the annual fee is worth it based on your spending habits.
Factors to Consider When Evaluating a Credit Card’s Annual Fee
Below are some key factors to consider when deciding if a credit card’s annual fee is worth it.
One-Time Sign-Up Bonus
Cards that offer huge sign-up bonuses may charge higher annual fees. In many cases, this one-time reward can offset the annual fee in the first year. After the first year, if your rewards and perks aren’t providing enough value to justify the annual fee, the card may not be worth it anymore. This is why it’s also important to consider the long-term cost of owning the card beyond the sign-up bonus.
Annual Credits and Perks
Some credit cards offer a number of perks and credits to cardholders. For example, certain cards have annual anniversary credits just for keeping your card open each year. Some travel cards offer statement credits— generally every four years—for TSA PreCheck and Global entry. Other cards offer some nice perks such as free DashPass or other free memberships. If you take advantage of all the card’s offerings, there’s a chance the value you receive might be greater than the annual fee.
Many credit cards also offer the opportunity to earn cash-back rewards on everyday spending categories, like gas stations, grocery stores, and dining out. Selecting a card with a high earnings rate in a category you spend a lot in may allow you to earn enough points to make an annual fee worthwhile.
Can Credit Card Annual Fees Be Waived?
Getting a credit card issuer to waive a fee is possible, but it’s not guaranteed. Here are some options to consider:
- See if you qualify for waived fees as a military servicemember: Under the Servicemembers Civil Relief Act (SCRA) and the Military Lending Act (MLA), military servicemembers and their spouses can qualify for waived annual fees on certain credit cards. Check with your card issuer to see if they offer a military fee waiver, and how you can receive one.
- Ask them to waive the fee: Start by contacting your card issuer’s customer service department and asking them to waive the fee—the bank or issuer usually lists a phone number on the back of your credit card that you can contact.
- Request the retention department: If simply asking does not work, ask if the credit card company has a retention department you can speak with. Sometimes, the customer service rep working for this department can waive the fee as an incentive to keep you as a customer.
- Ask for a downgrade: Another possible solution is to ask for a downgrade. Some credit card companies may allow you to switch to a card with a lower or no annual fee. And if that doesn’t work, consider canceling the credit card. Just make sure you understand how it could affect your credit first.
Even if you’ve already paid the annual fee for the year, some companies can reimburse you for the annual fee in the form of a statement credit if they agree to waive the fee.
When Are Credit Card Annual Fees Worth It?
Having a credit card with an annual fee can make sense for most individuals, but it really depends on a person’s unique spending habits. A credit card’s annual fee may be worth it if the value you receive from taking advantage of the credit card’s benefits can offset the yearly fee. If you have an annual-fee card and can utilize all of the annual credits, statement credits, and membership discounts, you’re likely earning more than what the card costs to own.
On the other hand, paying an annual fee for a credit card isn’t worth it when its cost outweighs the benefits you’ll receive from the credit card. For example, if you don’t travel much, getting a travel card with an annual fee doesn’t make sense because you wouldn’t take advantage of the card’s benefits enough to justify the cost. It’s important to compare your regular spending and habits with the card’s offerings to see if you can come out ahead.