Is an Annual Fee Travel Card Worth It? A Guide for Occasional Flyers
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Is an annual-fee travel card worth it if you only fly a few times a year?
Is a travel credit card worth the annual fee if you only travel a few times a year? Lacey has her eye on a Chase, Sapphire Preferred, or Delta card, and we brought in a travel credit card expert to help her figure out which ones, if any, make sense for her situation.
Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles.
And I'm Elizabeth Ayoa. Now, Lacey sent their question in by text. I'm going to do the honors of reading it to you today. Now that I've had my first full-time job for nearly two years, I'm planning to get a new credit card. I currently have the Bank of America Custom Cash Reward and Apple Card. My family lives in another state and I fly back a few times a year to visit, so I've been considering a travel card. But my preferred choices, the Chase Sapphire Preferred or a Delta card, have annual fees. How should I evaluate whether or not an annual fee is worth the perks? Thank you, Lacey.
To help us answer Lacey's question, we're joined by friend of the pod and host of the Smart Travel podcast, Sally French. Sally, welcome back to Smart Money.
Thank you, Sean and Elizabeth, for having me on. I love to be on Smart Money. You guys kicked us off and Smart Travel is just like the little sister of you guys. So I'm glad I could follow in your footsteps.
We're a happy family. Exactly. And I have to correct you, Sally, the big sister, not the little one, okay?
Oh, that's right. Well, big sister when we come to talk about travel rewards because we can hook up Lacey with possibly some big travel rewards here if we get this credit card answer right.
All right, Lacey, so get your notebook ready. So let's first discuss the credit cards that Lacey already has. Before reading this question, I did not know about the Bank of America credit card, and I also don't know much about the Apple credit card. Sally, tell us ways that Lacey could maximize these cards for travel, and let's start with the Apple card.
Well, it's funny that Lacey is considering cards with annual fees because Lacey has two really great cards that don't have annual fees. So for the listeners who don't know, the Apple card is compelling because it earns an unlimited 3% back at Apple. And then other merchants which are affiliated with the card, those currently include Walgreens, Duane Reade, Nike, Mobile, Ace, Uber. Those are just a few. And then you also earn 2%. When you use your card with Apple Pay, I don't know about you guys, but I feel like pretty much every merchant takes Apple Pay now.
Yeah, at this point. And also, I would say it's probably well north of half of all the transactions that I make are with my phone, the Apple Pay.
Right. Yeah, I hate to pull out my wallet, but my phone is in my hand all the time anyway.
My phone is my wallet at this point, yes.
I am all about Apple Pay. So I really think that getting 2% back is the gold standard on all of your purchases. And because Apple Pay is probably almost all of your purchases, that's already a really, really great card right there. So love that. That should probably continue to be an everyday spend card for Lacey and anyone else really out there.
The catch, though, is that it doesn't really have travel rewards. I assume that's what Lacey's really hoping to get. So what kind of perks reward-wise can someone expect from this Apple card?
you're basically just getting the cash back. And here is where I'm gonna offer a hot take. Even though I come from Smart Travel and we're all about maximizing the points and miles, it is basically a part-time job. It is my full-time job to understand how to transfer points and miles. And if you can really do it right, you can get an outsized redemption. And I've seen people who say, I have miles that maybe could be worth one cent each. But I have maxed it out to earn 6% back in value because I transferred them to an airline and I flew business class and it was international. And typically the only way we see those outsized redemptions is for international business class.
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Chapters
5 chapters
1
Is an annual-fee travel card worth it if you only fly a few times a year?
0:00–7:04
2
What cards does Lacey already have and how can they be maximized for travel?
7:04–8:12
3
What travel‑relevant perks does the Apple Card offer versus travel rewards?
8:12–19:31
4
How does the Bank of America Customized Cash Rewards card compare for occasional travel?
19:31–33:25
5
When does a Delta SkyMiles or branded airline card actually pay for itself?
33:25–36:20
Speakers
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