How Could a Credit Card With a $700 Annual Fee Possibly Be Worth It?

Are cards with high annual fees a waste of money or a good deal?

When most people think of the expense associated with credit cards, it's interest charges they are worried about. But, there are actually a number of credit cards that charge you an annual fee just for carrying the card in your wallet -- even if you never charge anything and don't pay a dime of interest.

The annual fees on certain cards can be quite high, with some totaling nearly $700 per year. While this may seem like an astronomical sum and a huge waste of money, the reality is that these cards can sometimes offer so many perks and benefits that they are well worth the price.

How a card with a $700 annual fee could pay for itself

While paying a card issuer $700 for the privilege of doing business with it may seem ridiculous, you need to look carefully at what you get for your money before you decide if the card is worth it or not.

For example, The Platinum Card® from American Express comes with a whopping $695 annual fee. (See rates and fees.) But the card offers:

• $200 back in statement credits at participating hotels booked through American Express Travel (terms apply)
• $240 in digital entertainment credits for eligible purchases including U.S. subscriptions to popular streaming services such as Hulu, Disney+ and even the New York Times (terms apply; enrollment required)
• $155 in credit if you pay for a Walmart+ membership using your card (terms apply; enrollment required)
• $200 in Uber Cash that can be spent with Uber and Uber Eats (terms apply; enrollment required)
• $200 in statement credits when qualifying airlines charge fees to your credit card for in-flight purchases (terms apply)
• $300 in statement credits to cover digital or club memberships at Equinox (terms apply; enrollment required)
• $100 in statement credits for purchases made at Saks Fifth Avenue (terms apply)
• $189 in statement credits if you pay for a CLEAR membership on your card (which provides fast-tracked airport security; terms apply)

If you claim all of these statement credits, they add up to over $1,500 -- more than double the nearly $700 annual fee that you paid out.

And that's not even mentioning the other perks the card offers, including access to Global Collection lounges when you are flying as well as rewards points earned for flights, hotels, and other purchases you make on your card. (Terms apply; enrollment may be required, depending on the benefit.)

Take a look at what perks you'll actually use

A quick look at the different statement credits you could qualify for can help you decide if a card is worth paying for or not. But you need to consider whether you can earn statement credits for things you would have spent money on anyway.

For example, if you are already using a streaming service or ordering monthly from Uber Eats, then getting statement credits for doing so would provide you with added value and help justify the card's annual fee. But if you aren't doing those things, then it might make little sense for you to start just to get some statement credits to cover a card's high cost.

So, don't discount cards with high fees and cross them off your list entirely because of sticker shock -- but do take the time to see whether the perks they offer make sense for your situation before signing up.