These offers are no more available on our website: Chase Sapphire Reserve (r), Delta SkyMiles (r) Reserve American Express Card You have many options with premium rewards cards. The huge annual fees may give you cause for concern. The potential benefits of these cards often outweigh their costs by a large margin. There’s a reason […]
These offers are no more available on our website: Chase Sapphire Reserve (r), Delta SkyMiles (r) Reserve American Express Card
You have many options with premium rewards cards.
The huge annual fees may give you cause for concern. The potential benefits of these cards often outweigh their costs by a large margin. There’s a reason I pay over $3,000 annually for half a dozen premium reward cards. It’s my admission fee, and I get access to over $17,000 in perks.
Like you, I was also cautious about how much I spent on premium rewards cards. This is what prompted the creation of Total Benefit Value. To help you decide if the annual fee is worthwhile, it estimates the dollar value of premium card benefits.
We also created an ease-of use rating to help you determine how easy it might be for you to cash in on your card’s benefits.
Let’s look closer at these tools and how they can help you choose the right credit card for you.
What is the Total Benefit Value? How does it work?
The Total Benefit Value is an estimation of the value of premium rewards cards’ benefits.
It is a starting point. If you use each benefit only once, this is how much the card could potentially be worth. You could earn even more value if you use them often. You could lose out if you don’t make use of every benefit.
You can decide how often you use these benefits. It is impossible to predict what benefits people will use. Our goal is to give a guideline that illustrates what we can do. You can then compare the card’s annual fee to determine if it is worth it.
What is the Total Benefit Value for a Card?
Sign-up bonuses are the first thing I consider when looking for a new credit card.
This is my favorite part of getting a rewards card. If you are like me, you get excited thinking about all the places you can travel with your new credit card points or miles.
You can only get the welcome bonus once. What happens after your first year? Is it possible to still be in love with your card? Are you having second thoughts or are you still in love with the card?
This is where the Total Benefit Value comes in. This figure is a dollar value that measures the annual value of credit card perks and benefits. It lets you know how much you can expect to receive year after year.
What are the benefits of the Total Benefit Value?
The premium rewards cards offer high-end perks that are what really make them stand out. These benefits can take many forms.
- Premium Rewards Cards often offer airport lounge access and statement credits for travel, dining, and lifestyle spending.
- You might also find more specialized airline rewards cards that offer flight credits, discount on award flights, companion tickets and complimentary first-class upgrade.
- Hotel Premium Rewards Cards may offer you free nights, hotel credit, or elite status, which gives you access to perks such as late checkout and room upgrades.
These are only a few premium benefits that we included in our Total Benefit Value.
How do we calculate the Total Benefit Value?
The Total Benefit Value includes all benefits that we can reasonably estimate, with the exception of rewards. We felt that the emphasis should be on the underlying benefits and not just points and miles.
The estimated value of core benefit, which provide a fixed amount such as statement credit for dining and travel, was included.
We were relying on the assumption that a cardholder and one travel companion would each use the recurring benefit once per year when we found it.
Some recurring benefits are too abstract and some fluctuate so much that it was impossible to assign a dollar value without guessing. Temporary benefits that you only get once were also excluded, like one-time statement credit or complimentary memberships that start charging after the first year. It must be an ongoing benefit that is available again in a year to qualify.
We looked at each type of premium card.
Premium rewards cards
We found that some of the most sought-after premium rewards cards come directly from credit card issuers. The Total Benefit Value was calculated for five standard premium rewards cards.
To show you how valuable these cards can be, we added all of the benefits and perks that we could measure.
- An annual airport lounge membership. We included the cost of a two-person day pass in airport lounges that do not offer annual memberships. We used the price for a two-person guest pass to lounges that are exclusive to cardholders. We assumed that a lounge’s price would be $30 per person for two persons, as this is the minimum amount you can expect to pay to get in.
- Travel credit for airlines and hotels, car rentals, cruises. Clear, Global Entry, TSA PreCheck(r).
- You can treat yourself to a hotel or cruise stipend on every trip
- Dining Credits at restaurants such as Shake Shack and The Cheesecake Factory
- Food delivery credit from apps such as DoorDash and Uber Eats.
- Grocery delivery credit from apps such as Instacart or Gopuff
- Lyft and Uber rideshare credits
- Entertainment credits are used to subscribe to media outlets like Hulu, Disney+ and ESPN+.
- Credits for places such as Equinox or SoulCycle
- Shopping credits at places like Saks Fifth Avenue
- Subscriptions which cover your membership fees to services such as Uber One, Lyft Pink and DashPass, Walmart+, Shipt, and Shipt
- In general, miles and points earned by using a credit card to make purchases are rewards that are not included in the Total Benefit Value. However, if you receive bonus points every year on the anniversary of your account opening, this is considered a benefit. We multiply the number bonus points by Credit Karma’s point valuation to determine how much it is worth.
The best credit cards that have an annual fee
There are so many variables in other benefits that it’s difficult to estimate how much they will add to the card. We therefore excluded them from the Total Benefit Value calculation. These benefits include:
- Reward points you can only get by spending
- Credit card insurance (like cellphone insurance or travel insurance) prices can vary based on the company you choose and the level of coverage.
- Elite status as the value it provides varies from person-to-person
- Temporary access to airport lounge as it is not an ongoing card feature
- Coupons such as Chase Offers and Amex Offers are temporary because they offer only temporary discounts that come and go.
- Reservations, concierge and support lines you can call to get assistance. They are often only available to cardholders and might not be for purchase.
- No-foreign-transaction-fee offers because we don’t know how often someone will travel internationally nor how much they’ll spend
These key features aside, there were some differences between hotel and airline premium rewards cards. We couldn’t account them all with one-size fits all approach.
Airline Premium Rewards Cards
You can also connect premium rewards cards to other popular airline reward programs. The Total Benefit Value was calculated for six premium airline rewards cards.
We calculated the value of the following perks in addition to those already mentioned:
- Companion Tickets allow you to bring a friend or relative along for the price of a ticket.
- First-class seat upgrades which give you free access to the seats, when they are available, for the price of a regular main cabin ticket
- Flight credits and Discounts that will refund a portion of your award flight miles
- No additional fees for checked bags, priority screening, priority boarding, priority check-in and priority baggage handling. This will help you save money on costly airline fees
What did we leave out?
- We don’t know how much each person will pay, so we offer discounts on in-flight purchase
- Upgrades to seats are available only to frequent flyers who have loyalty status. They are not always available to all cardholders.
- Southwest Airlines offers two free checked bags and no change fees . These benefits are provided by the airline and not the credit card issuer.
Hotel premium rewards cards
You can also connect premium rewards cards to other hotel reward programs. The Total Benefit Value was calculated for four premium hotel rewards cards.
We calculated the value of the following perks in addition to those already mentioned:
No-cost nights- You earn a predetermined amount of bonus points by staying in a hotel regardless of how much you spend.
What did we leave out?
- Earn by only spending
- Choice Awards you can only unlock by spending
- Elite status offers complimentary room upgrades, late checkout and breakfast
What is the Ease of Use rating?
The Total Benefit Value rating is complemented by the Ease of Use rating.
The Total Benefit Value is a measure of how valuable a credit card’s benefits might be, but the Ease of Use rating indicates how easy it may be to use them. Some cards make the benefits easy to find, while others can be difficult to use.
The Chase Sapphire Reserve(r), offers a travel credit you can use for all purchases, including hotels and airfare. The Platinum Card (r) of American Express provides a statement credit, but it can’t be used for airfare. Both Hilton and Marriott offer property credits that are only available at their most luxurious hotels.
It is important to consider both the Total Benefit Value as well as the Ease of Use rating before you decide which premium rewards card is right for your needs.