Featured Review: Credit Cards worth Paying Annual Fees without Spending

Featured Review: Credit Cards worth Paying Annual Fees without Spending (NOT updated)

Updated April 16, 2016. Please see our updated review here.

In this review, we will cover some credit cards that we think worth paying annual fees without ever making a purchase with them. For most of them, you don't even need to carry them in your wallet but rather putting them in drawers collecting dust. The idea is that even though these cards may not be great in rewards compared to our favorites, they offer special perks that value much more than the annual fees you are paying.

American Express Platinum Card ($450)

Benefits in a nutshell: The effective annual fee after considering the $200 annual airline credit is actually $250. With that you enjoy complimentary access to 100+ domestic airport lounges (Delta, Alaska, Airspace, Centurion, Priority Pass Select) and 550+ international lounges (through Priority Pass Select) and VIP amenities (such as breakfasts, upgrades, late check-out, and $100 food and beverage credit per stay, etc.) at over 700 luxurious hotels worldwide through Fine Hotels and Resorts (FHR), which is arguably the best luxury hotel booking program provided by a credit card.
Why not putting spending on the card? It only returns one Membership Rewards point per dollar spent, not exactly exciting, and you will have much better deal with Amex EveryDay Preferred which returns 1.5~4.5 Membership Rewards points when you have at least 30 transactions per month.
In the drawer? Yes, unless you need to enter Delta, Airspace and Centurion lounges. You will receive a separate Priority Pass Select membership card to access other lounges. You can book FHR hotels in your Amex online account or by calling Platinum Travel Service, and you can charge the hotel expenses to any Amex cards such as the aforementioned EveryDay Preferred or one of our favorite miles/points cards Amex SPG.

Bank of America Alaska Airlines Visa ($75)

Benefits in a nutshell: You receive an annual economy class companion certificate for you to take a companion at only $99 on any Alaska flight including those to/from Hawaii and Alaska. This companion certificate is the best among those offered by credit cards since most others are limited within contiguous U.S. Obviously, when used wisely, this alone can save you hundreds of dollars.
Why not putting spending on the card? It returns one Alaska mile per dollar spent for general purchases (and 3x on Alaska), and even though these miles are very valuable we think you can do better with Amex SPG whose points can be transferred into 30 partner programs including Alaska at 1:1.25 ratio when transferred in bulks of 20K.
In the drawer? Yes.

Chase JPM Ritz-Carlton Visa ($395)

Benefits in a nutshell: The effective annual fee after considering the annual $300 airline credit is only $95. The four major perks come with that are: 1) three club level upgrades at Ritz-Carlton each year, 2) complimentary Ritz-Carlton & Marriott Gold status for the first year and after $10K annual spending thereafter, 3) access to 25 domestic lounges and 330+ international lounges for you plus one guest through Lounge Club, and 4) primary rental car collision coverage.
Why not putting spending on the card? It returns one Ritz-Carlton/Marriott Rewards point per dollar spent for general purchases (and 2x on airfare, car rental and dining, and 5x on Ritz-Carlton & Marriott), and these points are generally considered less than one cent a piece (our current valuation is 0.65). You would be better off using a 2% cashback card such as Citi Double Cash or a miles/points card with bonus categories such as Chase Sapphire Preferred. However, if you want to maintain Gold status after the first year, you need to spend at least $10K, and if you want to activate the primary rental car collision coverage you need to charge the entire car rental purchase to the card.
In the drawer? Yes, unless you are working on maintaining Gold status or you are renting a car. Club upgrades and Gold status will be linked to your Ritz-Carlton/Marriott Rewards account and you will receive a separate Lounge Club membership card for airport lounge access.

Chase IHG Rewards Club MasterCard ($49, waived for 1st year)

Benefits in a nutshell: You receive an annual free night at any IHG hotels, which may be redeemed at their top of line hotels such as InterContinental Bora Bora Resort & Thalasso Spa. On top of that, you are also granted IHG's top tier elite status Platinum as long as you have the card; this status doesn't have great published benefits (so not as great as SPG Platinum, Hyatt Diamond, Hilton Diamond, or Marriott Platinum) but it some parts of the world (such as Asia) it can still be very valuable.
Why not putting spending on the card? It returns one IHG Rewards point per dollar spent for general purchases (and 2x on gas, groceries and dining, and 5x IHG hotel purchases), and these points are generally considered less than one cent a piece (our current valuation is 0.5).
In the drawer? Yes.

Chase Marriott Rewards Premier Visa ($85, waived for 1st year)

Benefits in a nutshell: Your receive an annual free night at any Category 1-5 Marriott brand hotels worldwide. Currently Marriott has nine categories and this certificate is mostly good toward mid-range hotels; however, in some parts of the world, you can still find very nice hotels in these categories. In addition, you also receive 15 nights credit each year toward elite status, which can be valuable to Marriott frequent guests.
Why not putting spending on the card? It returns one Marriott point per dollar spent (and 2x on airfare, car rental and dining, and 5x Marriott), and Marriott points are generally considered less than one cent a piece (our current valuation is 0.65).
In the drawer? Yes.

Chase Hyatt Visa ($75, waived for 1st year)

Benefits in a nutshell: You receive an annual free night at any Category 1-4 Hyatt brand hotels worldwide. Currently Hyatt has seven categories and this certificate is mostly good toward mid-range hotels; however, just like with Marriott, you may still find very nice hotels in these categories.
Why not putting spending on the card? It returns one Hyatt point per dollar spent (and 2x dining, airfare and car rentals, and 3x Hyatt purchases), and even though Hyatt points are considered second to SPG points in value among hotel currencies (our current valuation is 1.2 cent per point), we will recommend using Chase Sapphire Preferred instead since its 3-2-1 earning structure covers more categories and its Ultimate Rewards points can be transferred to 11 partner programs including Hyatt.
In the drawer? Yes.

Chase Fairmont Visa ($95, waived for 1st year)

Benefits in a nutshell: As long as you have the card, you receive Fairmont mid-tier status Premier, which alone will make paying the annual fee worthwhile since you receive one suite upgrade, one room upgrade, one third night free certificate, and two $25 dining/spa certificates each year. In addition, when you spend at least $12K each year, you will earn an annual free night at any Fairmont/Raffles/Swissotel hotels worldwide, which can be extremely valuable.
Why not putting spending on the card? It returns one Fairmont Rewards point per dollar spent for general purchases (and 2x on airfare, car rentals, transit, and commuting, and 5x Fairmont), and these points are worth about 1 cent a piece. So you'd better using a 2% cashback card such as Fidelity Visa or a miles/points card with bonus categories such as Citi Prestige. However, spending $12K a year to earn a free night is very well worth considering, especially when you have big Fairmont hotel spending anyway.
In the drawer? Yes unless you are working on earning the annual free night.

Citi Hilton HHonors Reserve Visa ($95)

Benefits in a nutshell: As long as you have the card, you will have Hilton Gold status, which is the best hotel mid-tier elite status on par with Marriott Gold and is worth much more than the annual fee. Note that you can achieve Hilton Diamond status with an annual $40K spending; however, we think it is not worth spending this much to achieve this higher tier status which doesn't bring much extra benefits. In addition, after you spend $10K each year, you will earn a free weekend night at any Hilton worldwide hotels, which can be very valuable.
Why not putting spending on the card? It returns three Hilton points for general purchases (5x on airfare and car rentals, and 10x Hilton), and Hilton points are generally worth much less than one cent a piece (our current valuation is 0.4 so 3x general spending doesn't translate to great rewards). However, spending $10K a year to earn the free weekend night will be a wise thing to do, especially when you already have big Hilton spending.
In the drawer? Yes unless you are working on earning the annual free weekend night.

Citi Prestige ($450)

Benefits in a nutshell: The effective annual fee after considering the annual $250 airline credit is $200. With that it offers three major perks: 1) access to 40 American Admirals Clubs for the primary cardholder plus two guests and 20+ domestic lounges (including Alaska) and 550+ international lounges through Priority Pass Select for you (primary cardholder or authorized user) plus two guests; 2) hotel privileges including 4th night free at any hotel at your choice through International Complimentary Night Hotels & Resorts program; 3) a 3-2-1 ThankYou earning structure with a potential 15%-25% annual relationship bonus.
Why not putting spending on the card? This card is actually a powerhouse when it comes to earning miles/points and that is why we recommend it for daily uses. However, some travelers may choose other great cards for spending and this card may still make sense even you don't spend a dime with it since the Admirals Club and Priority Pass Select with two free guests sound like a bargain for $200/year if you frequent airport lounges.
In the drawer? Most likely no, even though you will receive a separate Priority Pass Select membership. You need to show your card to get into Admirals Clubs and need to charge the hotel purchases to the card to use the 4th night free feature. And of course for most cardholders, its 3-2-1 rewards are just hard to resist.

US Bank Club Carlson Premier Visa ($75)

Benefits in a nutshell: You will receive 40,000 Club Carlson points every year you renew your card. Based on our current valuation at 0.25 cent per point, these bonus points are worth more than the annual fee. As long as you have the card, you will have Club Carlson Gold status, which is generally less valuable than Hilton Gold or Marriott Gold but may still be of good value. In addition, you will also receive an anniversary free night if you spend at least $10,000 in the previous year.
Why not putting spending on the card? It returns 5x for general purchases and 10x for Club Carlson hotels, and that translates to 1.25% and 2.5% cashback equivalent earning based on our current valuation, which is not that attractive.
In the drawer? Yes, unless you are working on earning the annual free night.