Disclosure: This post contains affiliate links and we may receive a referral fee (at no extra cost to you) if you sign up or purchase products or services mentioned.
Yeah, this was something I was initially against. Why on earth would anyone pay that much money to open a credit card?!
After several years of thinking that way, I’ve since changed my mind. And I recently applied for and got a credit card with a $395 annual fee!!
It was something that we’d never done before. Premium cards like this are expensive and they never seemed worthwhile to us.
Sure you get some good perks with them, but could a $395 fee every year be worth it?
I’m going to say that this can be an emphatic “yes”… if you can make use of the benefits.
In our case, I think we’re getting a steal for the almost $400 price tag that the Capital One Venture X credit card charges per year. Crazy, right?
Let me tell you the thinking behind it and why I wanted to open a credit card like this one.
Why the idea to open a credit card with a big annual fee can be worth it
Let’s start this discussion by saying that if you want to open a credit card – any credit card – you should toss out the idea if you’re not able to pay off your credit card bills in full every single month.
But if you’re already paying your credit card bills off every month, why not earn thousands of dollars in free travel in the meantime?
Many of you already know that we love our travel rewards and I’ve written about this quite a bit:
- The #1 Best Way To Track Credit Card Rewards
- The #1 Easy Way We’re Getting the Southwest Companion Pass
- Our Travel Perks Are Drying Up and That’s Big $$$!
- Free Nights – We’ve Had 5 at Hilton Hotels Recently
- We Got Turned Down for a Credit Card… Ok, Four!
- Travel Rewards – 12 Free Flights Earned in 9 Months!
Up until now, every time we’d open a credit card, it would fall under one of three categories:
- No annual fee
- Annual fee (waived the first year)
- A small annual fee under $100
The logic was simple. When you want to apply for a credit card, choose between the ones with the lowest fees and then leverage everything the card has to offer. We make sure to spend enough on the credit card to get the bonus offered and also take advantage of the other perks offered.
But lately, I realized that even though I never wanted to open a credit card that falls under the so-called premium cards with annual fees in the hundreds of dollars, the return on these cards can be much higher.
The perks of the Capital One Venture X credit card that sucked me in
After thinking about it, it didn’t take me long to do the math and realize that if I was going to open a credit card, the Capital One Venture X card would be the right one for us.
The benefits make a lot of sense and will save us a lot of money, particularly with our travel plans over the next year. Here are the perks that make this worth it…
❖ 75,000 bonus miles* – You earn 75,000 bonus miles after spending $4,000 on purchases in the first 3 months. That’s valued to be about $750 in travel! So that one benefit alone essentially earns us almost twice the cost of our fee right off the rip. We’ll shift all our spending to this card over the next three months, but we should be able to hit that without too much of an issue.
Approximate Value: $750
The other cool thing is that we’re earning miles through the spending we’re doing to get the bonus as well. When you book through the Capital One Travel portal, you earn 10x miles on hotels and rental cars and 5x miles on flights. Otherwise, you earn an impressive 2x on all other purchases… yeah all other purchases!
Assuming we spend just the $4,000 needed to get the bonus without going through the portal for anything and then just stopped, that would be another 8,000 miles we’d have earned.
Approximate Value: $80
❖ $300 annual travel credit* – When you book travel through the Capital One Travel portal, you receive up to $300 back as a statement credit per year. We already know that we’ll be doing a bunch of travel, so we’ll make sure to leverage this so it doesn’t go to waste.
Approximate Value: $300
❖ Unlimited access to over 1,400 airport lounges and food credits for you and 2 guests* – This is one of the benefits of the Capital One Venture X card that I’m super excited about. If you haven’t been to an airport lounge while waiting for a flight, you might be surprised by how night and day the difference can be. Depending on the lounge, you’ll find some or all of these perks:
- Comfortable areas and seating for relaxing
- Private working areas
- Free Wi-Fi
- Places to charge your devices
- Bars with complimentary drinks (alcoholic and non)
- Complimentary snacks or even meals
- Nice restrooms and sometimes even showers
Lisa and I (and now Faith) have been spoiled by the airport lounges and miss them when we don’t have free access. They’re just much nicer and more comfortable places to wait for your flight.
Although there are a few Capital One lounges and some Plaza Premium Lounges, the bulk of the lounge access for the Venture X card is through a complimentary Priority Pass membership. Although we’ve had lounge access several times before, we were usually limited to a certain number of passes per year or it was only the cardholder and just one guest who received free access.
The membership you get with the Capital One Venture X card isn’t even a plan you can buy directly through Priority Pass (though it lines up pretty closely to their top plan). With the membership through the Venture X card, you get unlimited access to their lounges all year and you can bring two guests with you. It also includes impressive food credits at some airport restaurants.
We plan to do a lot of smaller trips over the next year so this will work out great for the three of us. Just to give you an idea, we have a cruise coming up very soon. We plan to get to the airport here in Cleveland and then head to an airport lounge while we wait for our flight. We’ll have a few snacks there for breakfast.
Then we get to Miami and likely won’t be able to check into our hotel for the night yet so we’ll have lunch at the Corona Beach House. That restaurant will give us $30 off our bill… each (cardholder and two guests)! That’s $90 off the total bill for the three of us!
After the cruise, we’ll head back to Miami airport and we have a looooooong wait for our flight. It’ll probably be about 5 or 6 hours assuming we don’t putz around Miami for a little bit first. Priority Pass to the rescue! We can relax in a lounge (or more than one) and also eat lunch at the Corona Beach House with the food credits.
There are a couple of other restaurants that I’ve seen listed elsewhere too (like Margaritaville) but I didn’t see them listed in the app so we’ll see… dinner?
This is just for one trip. Think about how valuable this can be throughout all our upcoming travels.
This might not be the sole reason to open a credit card like the Capital One Venture X card… but it helped tip the scales for us to want it!
Approximate Value: $1,000 – I’m just throwing a small estimate on this but I would bet it will be much higher.
❖ $100 credit for Global Entry or TSA PreCheck* – This one speaks for itself. If you don’t have TSA PreCheck (or better yet, Global Entry), this is fantastic. The expedited clearance is wonderful when going through security. TSA PreCheck is for domestic travel when you’re passing through security. Global Entry dramatically speeds up the process to almost nothing when returning to the U.S. from another country and going through customs.
The cost of TSA PreCheck is currently $85 and Global Entry is $100. Either of those covers you for 5 years. Here’s the beautiful thing though – Global Entry includes TSA PreCheck so for an extra $15 you’re getting a nice bargain.
Either way, when you open a credit card like the Capital One Venture X card, this reimbursement has the cost of one person covered. If I remember right, it doesn’t even need to be the cardholder – once the card is used to pay for the cost, the credit should automatically appear sometime soon thereafter.
We all already have Global Entry, which includes TSA PreCheck so we’re good to go right now (and it has been soooo worth it!). We used other credit cards to cover my cost and my wife, Lisa’s, while we paid out-of-pocket for program entry for our daughter, Faith, a few years ago. But when we need to renew our Global Entry status in a couple of years, you can bet your bottom dollar we’ll be leveraging cards like this one to ensure it’s covered again.
Approximate Value: $100
There are other perks as well such as that it carries no foreign transaction fees (great for international traveling!) but let’s just look at the more tangible aspects that I just went over.
TOTAL APPROXIMATE VALUE: $2,230
$2,230! That’s what makes this a premium credit card. Sure, it has a higher annual fee, but look at what we’re essentially getting out of it.
You could argue that the lounge access isn’t essential – we could sit in the regular waiting areas by the gate and pack our own meals for the airport. Without this card, that’s exactly what we would usually do.
But even if we subtract the lounge access and food credits completely, that would still leave us with a $1,200+ value. It’s hard to argue that getting back over $1,200 for $400 isn’t a good return on your money.
Fortunately, though, we don’t have to subtract out the lounge access and food credits benefit because it comes with the card so we might as well take advantage of it. It makes the airport visit of each trip a little more fun, less stressful, and more comfortable. Throw in the free food and drinks and we’re set!
There are other premium-type credit cards out there with similar benefits. A good example is the Chase Sapphire Reserve card and it’s a really good credit card to have in your wallet. However, that card has a $550 annual fee versus the $395 for the Capital One Venture X card… that’s $155 more!
Considering how similar the benefits are, the Venture X card is a great deal!
So, I’m excited to have our new Capital One Venture X card. We’ve had it for a few weeks now and we’ve been funneling all our spending toward it so we can get that 75,000-mile bonus. And our cruise is coming up soon so we’ll be taking advantage of the airport lounge access (and free food!).
If you’re on the quest to enjoy some of the benefits of travel rewards, check out some of the posts I mentioned earlier in this article. And, of course, I’d always appreciate it if you apply for any cards through the links on my Recommended Credit Cards page. These are cards that we’ve used and like and some others that we might go after in the future.
And if you didn’t read my recent article on a fantastic way to track your credit card rewards, you can see that post here: The #1 Best Way To Track Credit Card Rewards. The founder, Zac, is a great guy and the site/app is tremendously useful… and free!
Have you ever applied for or considered applying for a credit card with a higher annual fee for the benefits?
Plan well, take action, and live your best life!
Thanks for reading!!
*Note: These benefits are current at the time of writing. To see the current benefits of this card or any others, go to my Recommended Credit Cards page. I continuously update that page to ensure it’s current.
8 thoughts on “Is It Worth It to Open a Credit Card With a Huge Annual Fee?”
That looks like a nice card. I’ll check it out. Although, we won’t be traveling much over the next few years.
I’m sure they’ll change up some things once you’re ready to travel again, but the perks make it worth considering something like this when you do. 🙂
Great post Jim, I have just a regular Capital One Visa card, with no annual fee, and have had it for 6-7 years. I do get some handsome rewards with my current card, but I wonder if it would be worth upgrading to the Venture X. It’s a slick looking card, kinda looks like the AMEX Black card. People will mistakenly think i’m some high roller with that bad boy!
Haha, be the high roller!! 😉 You could consider upgrading but you’d lose out on the initial bonus so that would be a letdown. If it’s a card you really do want though, you should be able to close out your current card, wait 30 days, and then apply for the Venture X card. You’d have to confirm that’s the case, but that would allow you to get the valuable signup bonus.
I just did this last year and you are so right about lounge access being a game changer! I’m banking point to hopefully fly to Europe next year in lie flat seats!
That’s fantastic, Stephanie – make the magic happen and enjoy your trip!!
I love this card. In fact, we both got it when it came out late last year. We had to spend $10k over 6 months (twice), so I just had to be diligent in planning out how we would spend the money. We were also able to also get a $200 Airbnb credit, which came in very handy this year. I appreciate how the miles post pretty quickly — don’t have to wait until the end of the statement, even for the bonus! I will say, for the travel credit, don’t use it on airfare. We booked a ticket on United with the travel credit via the portal. When we ultimately cancelled the ticket, I had a hard time using the credit on United (because it was booked via third party). I had to call a few times and they eventually let me use the funds for a future ticket. So going forward I am just gonig to use the travel credit for hotels. It works really well, especially when booking hotels where were don’t have status (such as non-chain hotels internationally).
We pay $1,500 in annual fees for 10 different credit cards, but I am pretty sure I can count more than $1,500 in benefits we have gotten from the cards, without even thinking about the additional value of the points from the cards.
Wow, that’s some hardcore travel rewards! You guys are ballers and are really rocking and rolling with this stuff – nice job!
Good info on the travel credit, too. We’ll definitely keep that in mind when we end up using it.