Earlier this week, Nick pondered which ultra-premium credit card he should keep. Ultra-premium cards typically offer terrific benefits in exchange for terrifically high fees (typically around $450 per year). Often the value of the benefits far outweigh those fees, but not always. Nick’s post generated a lot of discussion in which people sometimes asserted that Nick was wrong about how much he values various card benefits. But, that was exactly the point of his post: credit card benefits offer different value to different people depending upon their travel style, which airports and airlines and hotels they frequent, and more.
Most ultra-premium cards are worth signing up for because they have good to excellent signup bonuses that are worth more than the first year’s annual fee. That’s not the question. The question is whether the cards are worth keeping past the first year. When the second year annual fee comes due, do you keep or cancel?
Do the card’s benefits outweigh the annual fee? Each person should conservatively estimate the value of each benefit to them to figure this out. In most cases, I recommend trying to estimate how much you’d be willing to pay for this feature if it was available stand-alone as a subscription. For example, if a card offers free checked bags, you could save hundreds of dollars if you use that benefit often enough. But how much would you pay for an annual subscription to get free checked bags? That answer should be substantially lower than the amount that you think you’ll save. Otherwise, why prepay for that benefit?
To help you come up with your own estimates, I created a Google Doc spreadsheet with tabs for each of the common ultra-premium cards. Click here to open the spreadsheet.
The spreadsheet currently includes general estimates of how much each major card benefit may be worth, along with my own personal valuation to give you an idea of how I think about each.
To use the spreadsheet, create a copy of it and then overwrite the values in columns D and E on each tab with your own value estimates.
Tips for using the spreadsheet effectively
- Be conservative with your estimates. Enter values that you would pay for a subscription for that benefit rather than the amount you expect to save.
- Consider other factors not listed. Most of the benefits of my Sapphire Reserve card are available through other cards, but I love the fact that this single card gives me best in class earnings on travel & dining, best in class travel insurance, and increases the value of my Chase points earned on other cards. There’s something great (to me) about having a single card to turn to for all travel & dining spend.
- Once you identify cards that you know that you’ll keep year after year (like my CNB card pictured above), make sure to consider that when evaluating overlapping benefits on other cards. For example, I get 12 Gogo internet passes from my CNB card each year (really 48 passes since I get 12 from each CNB card), so I don’t value the same benefit on the Altitude Reserve card.
- You’re allowed to make irrational decisions if you can afford it. My personal valuation of the Altitude Reserve card comes out a bit higher than the card’s annual fee. But, even if it came out lower, I would consider keeping the card simply because I like it. I love knowing that I get good value from Apple Pay purchases. And I love getting 1.5 cents value per point through Real Time Mobile Rewards (and no, I do not earn an affiliate commission for this card).
The Card Roundup
At the time of this writing, the spreadsheet includes the following cards…
My Personal Keepers
Here’s where I landed after analyzing each card:
To understand the above results, keep in mind the following dependencies:
- The CNB card is an obvious no-brainer since it offers up to $1,000 per year in airline fee credits for $400. As a result, other cards that offering duplicative benefits were not valued as highly. For example, I don’t value getting Priority Pass from any of the other cards since this one gives me Priority Pass with unlimited guests.
- After analyzing both the consumer and business versions of the Amex Platinum card, I realized that the business card made more sense to me, so I zeroed out the duplicate benefits on the consumer spreadsheet. For example, there’s no advantage to having two cards that offer Emergency medical evacuation.
- Similarly, the values I assigned to the Delta Reserve business card assume one already has the consumer card, so some of the card’s benefits were zeroed out.
Also keep in mind:
- I live near a Delta hub (Detroit) and like to use Delta credit cards to manufacture high level elite status for both me and my wife.
- I rarely fly AA or United
- I’ve gotten very good at getting full value from credit card travel credits, so my net cost on many of these cards is far less than it appears.
Currently, I have all of the above cards except for the Platinum Business card, United Club, AA Executive, SPG Luxury Card, and Hilton Aspire. Based on the analysis, I should think about cancelling my consumer Platinum card when the annual fee comes due and upgrading my business Green to the Platinum Business card. And, I should consider getting the Hilton Aspire if I can ever free up credit card slots in my Amex portfolio.
My wife currently has the Amex Platinum Business card, Sapphire Reserve, both Delta cards, and the SPG Luxury card. We’ll probably drop her Sapphire Reserve card and add her as an AU on my account. And we’ll consider getting her a Hilton Aspire card at some point in the future. With her SPG Luxury card we’ll probably downgrade her to the regular $95 SPG card when the second annual fee comes due unless we decide that the 50K free night certs are worth that much more than the 35K certs.