Is a Premium Credit Card Worth It? 4 Questions to Ask

A premium credit card is any credit card that has a relatively high annual fee to use. There are no specific cut-off amounts, but typically, a card with an annual fee of multiple hundreds of dollars will be considered a premium credit card. The Chase Sapphire Reserve card, with an annual fee of $550, definitely falls into this category. But is the card worth it for you? Here are four questions to ask yourself when you’re trying to decide.

1. What Is the Card Mostly Geared Toward?

First off, what categories does the card mostly reward you for? The Chase Sapphire Reserve card is mostly a travel credit card, with its biggest benefits coming from travel purchases. However, there are other credit cards that may give you more benefits with apparel or benefits when you make entertainment purchases. Make sure that the general benefits of the card align with the things that you tend to prefer.

2. Is There an Annual Credit?

An annual credit can be a great way to essentially reduce the annual fee of a card. When you use the Chase Sapphire Reserve card, you’ll get a $300 annual credit for travel purchases. As long as you use that credit, you’ll essentially have only a $250 annual fee instead of a $550 one. Additionally, there may be some annual benefits that have a yearly value attached, but don’t come in the form of a statement credit.

3. Will This Become Your Family’s Main Credit Card?

Any premium credit cards that offer significant purchase rewards can be best utilized if you choose to make a significant number of your family purchases using that credit card. If you’re planning to sign up for a premium credit card, you should try to use that premium card as much as possible. That way, you’re getting the maximum amount of benefit from your premium fee.

4. What Introductory Bonuses Are Available?

Introductory bonuses are a great way to get even more out of a brand-new credit card. The Chase Sapphire Reserve promotion for new users is 50,000 points, and if you’re able to qualify for it, you’ll be able to use it for up to $750 in travel redemptions when you redeem through the Chase Ultimate Rewards travel portal. When you account for the annual credit, that covers three years of annual fees for the card, which is quite the benefit as long as you’re able to get it.

Conclusion

Premium credit cards exist for a reason – people use them and enjoy their benefits. However, if you’re interested in a premium credit card, you need to make sure that you’re going to use it often enough to justify the annual fee. Most premium credit cards can essentially pay for themselves if you use them frequently, so if your family often makes purchases in certain categories, you may want to spring for the premium credit card to get the most out of those purchases.