Should I Hold Onto A Card Just for Elite Status?

Should I Hold Onto A Card Just for Elite Status?

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Perhaps one of the best (and underrated) benefits of holding certain credit cards – especially hotel credit cards – is the elite status they come with. For simply having the right card, you can sometimes get free upgrades, better service and more points. Who doesn’t love that?

But everything in life comes with a price. The price of some of these top-tier lifestyle cards is a prime example of paying the cost of elite status. Instead of staying in hotel after hotel, you are paying upfront to effectively jump the line and become a preferred customer immediately. The price for admission can be high: if you get all the statuses that come with The Platinum Card from American Express, it will cost you $550 starting on day one.

Is it worth keeping these cards just to guarantee elite status? Should you pay up front for elite status, or earn it every year? Before shelling out another annual fee, consider these two questions, along with an alternative option.

Will I get the value of the annual fee from elite status?

The problem with annual fees is that you must justify their cost year after year in order to make it worthwhile. Taking the Platinum Card from American Express as an example: Even after the $200 annual credit aboard one airline, you would still have to get $350 of value from a combination of elite status, points and other perks.

If a better level of service, upgrade potential and earning more points is more valuable than the annual fee, then there is no problem in paying for that status. Some frequent travelers would rather pay for the status and service rather than earn it through multiple stays with the same hotel.

On the converse, if that annual fee would be better used helping you get closer to your next trip, then your best bet would be to consider carefully if elite status helps you actualize the cost of status.

Will I stay at the hotel enough to justify elite status?

On the converse, you might stay enough with one hotel chain to naturally earn status with them. In that case, can you truly consider the annual elite status a benefit of that high annual fee credit card?

If you know you will be staying enough at one hotel to earn elite status, you have two things already going for you. First, your status is effectively guaranteed through the next year, giving you time to decide if you need to pay for it in following years. Second, the points that you would organically earn from staying at those hotels (especially when paying with the appropriate hotel card), may exceed those you would earn from your credit card with elite status.

If you have enough nights upcoming, consider the overall value your card offers. When you subtract the elite status, if it doesn’t add up, then the card may not be serving you very well.

Consider a card with elite status and no annual fee.

Although it might sound contradictory, there are some card that offer elite status and have no annual fee. My favorite is the Choice Hotels credit card, which offers gold elite status in Choice Rewards as long as you hold the card. If you are not a subscriber to traditional hotel rewards programs, the Capital One VentureOne Rewards card could also be a good option, thanks to earning 10X points on purchases from Hotels.com.

While credit cards can be rewarding, they only do so by getting value outside of your annual fee. By taking these points into consideration, you can help to ensure your travels remain frugal.

 

How do you ensure you get the most value from your credit cards? Let me know your thoughts in the comments below!

Travel

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April 16, 2018 at 07:08PM

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