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TPG reader Kyle messaged me to ask about credit cards with high annual fees:
“When, if ever, does it make sense to have two premium credit cards? I have the Citi Prestige, so I get lounge access minus the Centurion lounges. Should I also get the AAdvantage Executive MasterCard even if I have to spend $7,500 in 3 months? Does anyone carry two premium cards, and if so, why?”
My dad taught me when I was a kid that cheap is expensive. For example, if you buy a very cheap pair of shoes, they’ll likely break and you’ll need to purchase another pair soon. Assuming you can afford it, you’re better off just buying a decent pair to begin with. The same can be said of credit cards.
A lot of people focus on the annual fee and look for cards that don’t have one, but no-fee cards often come with underwhelming sign-up bonuses and meager perks. I recommend looking at mid-tier (cards with annual fees around $100) or premium cards if they’re within your budget.
Credit cards can get expensive, and that brings me to Kyle’s question about whether it ever makes sense to have two premium credit cards. He already has the Citi Prestige card, and he’s wondering if he should also get the Citi AAdvantage Executive World Elite MasterCard with the current increased sign-up bonus.
In general, having two premium cards can definitely be worthwhile. Some benefits might overlap (like Admirals Club lounge access in this case), but you’ll get a lot of unique benefits as well. If you have two cards in transferable points programs (like the Citi Prestige card and The Platinum Card from American Express), then you have a wider selection of transfer partners to choose from, which helps you redeem your rewards more efficiently.
As for the two cards Kyle is asking about specifically, they each have compelling benefits that make them worthwhile.
The Citi Executive Card has an annual fee of $450, but it currently offers a sign-up bonus of 75,000 AAdvantage miles when you spend $7,500 in the first 3 months. You also get great benefits like Admirals Club membership (with guest privileges), a $100 application fee credit for Global Entry or TSA PreCheck and the opportunity to earn 10,000 Elite Qualifying Miles when you spend $40,000 in a calendar year.
Right off the bat, if you can hit that $7,500 spending requirement to earn 75,000 miles, then the card is already worth getting. I value AAdvantage miles at 1.7 cents apiece, so 75,000 miles is worth $1,275, and can get you a one-way first class ticket to Asia, or plenty of other awards that will easily cover the cost of the $450 annual fee. Plus, this card allows you to accrue AAdvantage miles, while the Citi Prestige does not.
If you can reach the $40,000 annual spending threshold, the 10,000 Elite Qualifying Miles could help you earn Executive Platinum status, which is worth thousands of dollars in value just from the eight systemwide upgrades alone. In my opinion, this card is worth getting regardless of the other cards in your wallet.
The Citi Prestige card is one I’ve been eyeing and plan to get this fall. Although the annual fee is also $450, you get a $250 annual air travel credit, so if you travel at least once a year on a paid flight, the annual fee is effectively reduced to $200. The card currently offers a sign-up bonus of 50,000 ThankYou points after you spend $3,000 in the first 3 months, and you can transfer those points to twelve different airline and hotel partners. I personally love using my ThankYou points on Singapore Airlines, which has an amazing first-class product.
The rest of the annual fee can be easily made up with the 4th free night hotel benefit, with can give you a complimentary 4th night at any hotel. You also get other benefits like free rounds of golf and another $100 Global Entry credit — I actually don’t know how they sustain all this on just a $450 annual fee!
In conclusion, I definitely think it can make sense to carry two premium cards. If you’re getting three times the value of the annual fee just from the sign-up bonus alone, plus a bunch of perks that make your traveling easier and more enjoyable, it’s a no-brainer. Of course, it’s not for everyone, and only you can decide whether it makes sense for you. But if you’re a savvy frequent traveler and have the means to front the annual fee, I’d say go for it.
I’d love to hear from readers out there, especially those who carry (or have thought about carrying) more than one premium card. Do you think it makes sense? Please share your thoughts in the comments below.
Citi® / AAdvantage® Executive World Elite™ MasterCard®
|Intro APR||Regular APR||Annual Fee||Foreign Transaction Fee||Credit Rating|
|N/A||15.49% (Variable)||$450||0%||Excellent Credit|