How much do I have to spend to make a premium card break even?

A few months ago, we looked at up-front justification (or at least softening the blow) of the annual fees on some premium credit and charge cards. This was mainly intended to show that most of these cards have up-front benefits that compensate for the $450+ annual fees.

Several conversations on online travel and rewards forums have shown that the distinction between the annual fee and the potential value of the card are not as clear as they could be. And some people are looking solely at the sign-up bonus vs the annual fee.

So today we’ll take a deeper look at how to determine if one or more of these cards is for you.

Spoiler: If you don’t travel in a way that you can use your own cards, odds are none of these cards will be of much use to you beyond the first year, if that. 


We reviewed the American Express Platinum charge cards (both personal and business), the Chase Sapphire Reserve credit card, and the Citi AAdvantage Executive credit card.

The annual fee softening summary is:

  • Amex Platinum (Personal): $550 fee. $200 fee rebate, $200 Uber credits, $100 Saks credit. Remaining effective fee: $50.
  • Amex Platinum (Business): $595* fee. $200 fee rebate, $200 Dell credits. Remaining effective fee: $195.
    (Gogo in-flight wifi passes may further reduce this by up to $70 ($7 per pass).)
  • Chase Sapphire Reserve: $450 fee. $300 travel credit, . Remaining effective fee: $150.
  • Citi AA Executive: $450 fee. $400-550 lounge membership. Remaining effective fee: Less than $0 (sorta).

The original post included a value of $17-20 per year for the TSA Pre/Global Entry credit, and erroneously omitted this benefit from the Citi card. We’ve removed it from all four here. If you can use it, you come out another $17-20 a year ahead.

*Note that the Amex Business Platinum card has taken the title of most expensive premium card in our review. In February 2019, the annual fee increases to $595, and a new Dell benefit could more than compensate for the $145 increase in annual fee (as the Uber and Saks credits did for the Personal Platinum hike a while back). Read about the changes to the Amex Business Platinum card here. 

Also note that there are very competitive alternatives within the Amex and Chase families, in the form of the re-released Amex Gold Charge Card (formerly Premier Rewards Gold) and the classic Chase Sapphire Preferred. If you travel at least once a year and eat out at least once a month, these are worth checking out.

  • Amex Gold Card: $250 fee. $100 airline fee rebate, $120 dining credit. Remaining effective fee: $30.
  • Chase Sapphire Preferred: $95 fee (waived first year). No credits.

Since the AA Executive Mastercard is mainly valuable for Admirals Club lounge access, we’re not doing the math on it in this article. You do earn AAdvantage miles on top of the lounge membership, but if you have this card, you probably use their lounges enough to appreciate the benefit. Note that they’ll be following Delta’s lead and limiting lounge access to American Airlines ticketholders later this year. 

How do we make up the remaining fees?

One way to consider the remaining fees is with a sign-up bonus. A 50,000 point bonus can be worth $500 or more, which makes up for multiple years of the effective annual fee.

On an ongoing basis, though, we wanted to see how much spending would be required to zero out the fee altogether. We are assuming that you can use the full benefits listed above.

We are also not including the value of lounge access, Amex or Chase Offers, ShopRunner, rental car insurance, or other benefits that could tip the scales heavily in your favor. Priority pass for two people traveling together is easily $50+ each way if you can use it, for example, and a couple of hours in a Centurion Lounge could be worth more than that per person. 

Too Long; Didn’t Read (Yet)

If you use all the benefits listed in the bullet points above, you can probably justify these cards with $750-5000 in focused spend per year. The $750 is grocery and restaurant spend for Amex Gold. The $5,000 would be for air and prepaid hotels with the other Amex cards, and travel or dining on the Chase cards.

If you can’t justify this much spending in bonus categories, these may not be the cards for you. You’d have to look at the alternate benefits, and consider whether a lower level and/or cash-back card would be a better fit.

It’s also worth noting that if you carry a balance and pay interest, this probably wipes out your reward value. For some businesses, the interest and fees may be tax deductible anyway (consult your accountant or tax attorney), so it may not be an issue.

    Worst case Best Case Best case
Lender Card Cash Out General Category
Amex Platinum  $            8,334  $            5,000  $          1,000
Amex Business Platinum  $          32,500 (was 41,667)  $          19,500 (was 25,000)  $          3,900 (was 5,000)
Amex Gold  $            5,000  $            3,000  $              750
Chase Sapphire Reserve  $          15,000 N/A  $          5,000
Chase Sapphire Preferred  $            9,500 N/A  $          4,750

Show Your Work?

For any of these options, there are ways to get a much better redemption value, and maybe even ways to get much worse. We did the math based on predictable redemption values, but at most we look at a couple of the hundreds of ways to use points from any of these cards.

Amex Membership Rewards

With American Express, there are a lot of options to value your points. The worst case values are in the 0.6 to 1.0 cent range for their “Use Points For Charges,” Amazon pay with points, and Uber “use points” options.

The Points Guy estimates redemption value (i.e. for travel) at 1.9 cents per point fairly consistently, and with the Amex Business card you can get a 35% rebate on points used to buy travel under certain circumstances (business or first-class flights on any airline, or any flight on your designated fee rebate airline). That sets a value of 1.54 cents per point that’s easy to achieve.

So for personal Platinum charge cards, to make up $50, the worst case is 0.6 cents per point.

  • Spending $8,334 a year on the Platinum card would potentially let you cash out and break even.
  • If you can use a LOT of Uber credit, $5,000 in spend would get you $50 in Uber value and break even.
  • Category Spend: 5x MR points for airline flights booked with airlines directly or through Amex Travel, or prepaid hotels through Amex Travel. You could spend as little as $1,000 a year to break even with Uber credit, or $1,667 for the terrible Pay with Points value.

For business Platinum charge cards, we need to make up $250.

  • Spending $41,667 a year would let you cash out and break even. Ugly but it works.
  • With only $25,000 annual spend, you get $250 in Uber value and break even.
  • Category Spend: The airline and hotel 5x categories also apply for Business Platinum, so we’re looking at about $8,333 for cash out or $5,000 for Uber value.
  • Extra bonus: If you make purchases over $5,000, you get a 50% bonus on MR points (1.5 per dollar spent).
  • If you count the 35% rebate, you only need to spend $16,234 to break even when using MR points for qualifying flights.

For the Amex Gold Card, we need to make up $30, if we can use that dining credit every month. For every three months you don’t use the dining credit, add these numbers again (so if you only use six months in a year, $15,000 for cash out).

  • Spending $5,000 a year would let you cash out and break even.
  • Spending $3,000 would make up the remaining fee in Uber credits.
  • Category Spend: Amex Gold gives 4x MR points on restaurants and supermarkets (so $1,250 or $750 respectively) and 3x MR points on flights as above (so $1,333 or $1,000 respectively). You’d probably end up with a mix of these.

Chase Ultimate Rewards

Chase rewards are often most useful when transferred to one of many travel partners (such as British Airways, Southwest, JetBlue, United, Hyatt, IHG, and Marriott). The value here depends on what you redeem them for with the partner.

The baseline worst case redemption is a cash back value of 1 cent per point. This is predictable, and can be applied with a statement credit or gift cards.

Another option, which becomes more valuable as you move up the Sapphire food chain, is to use the Chase travel portal and redeem at 1.25 cents (Sapphire Preferred) or 1.5 cents (Sapphire Reserve). These aren’t always the best redemptions, but they are predictable and repeatable, so we’ll work with them as well. 

For the Chase Sapphire Reserve, we need to make up $150.

  • Spending $15,000 a year gives a $150 statement credit, which breaks even.
  • Category spend: Dining and travel earn 3x UR points, so $5,000 spend on these categories breaks even. Note that your $300 travel credit no longer earns points, so you kinda need to spend $5,300.
  • Travel redemption: If you can redeem through the Chase Travel Portal, take 1/3 off the numbers above.

For the Chase Sapphire Preferred, we need to make up $95 after the first year.

  • Spending $9,500 a year gives a $95 statement credit, which breaks even.
  • Category spend: Dining and travel earn 2x UR points, so $4,750 in these categories gets you there.
  • Travel redemption: If you can redeem through the Chase Travel Portal, take 1/5 off the numbers above.

Wrap it up for us?

If you choose a premium card which maps to your spending habits, you may find it easy to break even and go beyond the annual fee.

For people who book their own travel, either of the Chase cards and either of the Amex Platinum variants would be a good fit. If (like us) you are not able to book most of your air travel and hotels on your own cards, you will probably find Amex Gold or the Chase cards a better fit.

The decision will be a personal one, and as we’ve mentioned before, you may not find that any of these is worth keeping more than a year.

Disclosure: We do not post referral links to any credit cards, nor are our posts endorsed, reviewed, or even necessarily known to the card issuers and networks. If you are interested in a personal referral link to a specific card (which may provide our main blogger Robert with bonus points), contact us through the site or our Facebook page and we’ll see if we can get a referral link for you.

3 thoughts on “How much do I have to spend to make a premium card break even?

  1. Pingback: Justifying a premium credit or charge card for your traveling pleasure – rsts11travel

  2. Peter D

    This was very helpful and validates my decision to get the Chase Sapphire Reserve card (especially when the bonus was 100K).

    What I rarely see in articles like this is an analysis of airline-linked cards. I’ve had the Amex Delta SkyMiles Platinum for years and it’s useful when I can use the companion pass (some years we don’t). But I’m guessing hardcore travelers would say Amex Platinum is better when not tied to any one airline?


    1. At the 100k signing bonus, it was an absurdly good deal. Even with a 50k bonus you’re evening out the annual fee for 3 years or more.

      We’ve had the impression (without much data gathering to back it up) that the premium air and hotel cards are good if you’re not quite at the top status tiers, but when you get to the top, the card benefits may not be as special. CSR, Amex Platinum, and even Founderscard can get you status uplifts, and as you mention, they don’t tie you to one airline (which is good if your needs vary). Might have to dig into that for a future post though.


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