Qatar Business Class

Why it can be worth paying an annual fee for a miles and points credit card

Links on Head for Points may pay us an affiliate commission. A list of partners is here.

I get numerous emails from Head for Points readers asking for advice on which miles and points credit card they should get.  These often come with the caveat “but I don’t want to pay a fee for a card”.

I don’t agree with this approach.  Let me explain why.

Most credit cards in the UK do not carry an annual fee.  It is very likely, before you became interested in miles and points, that you had never paid a fee for a credit card in your life.

I can see why you wouldn’t want to.  You know that the card company gets a cut from the retailer every time you buy something.  You know that they add a 3% foreign exchange fee whenever you spend abroad, and whenever you end up withdrawing some cash on it (which, however much you try to avoid it, always happens once or twice a year).  You may accidentally miss a payment date occasionally and run up some interest.  Paying for the privilege of generating this revenue for the credit card company seems wrong.

I think you need to look at it differently.  Forget that you are paying for a credit card.  Look at it as simply paying for the benefits offered.

Should you pay a fee for a credit card?

Taking the British Airways Premium Plus card as an example

Some people take one look at the £195 annual fee on the British Airways American Express Premium Plus credit card and are put off instantly.

Purely from the point of view of the sign-up bonus, being put off by the fee is a mistake, of course.  The card is currently offering 25,000 Avios for signing up when you spend £3,000 within 90 days.  The majority of Head for Points readers would jump at the chance of buying 25,000 Avios for £195 which is basically what you are doing.

The fee becomes even more realistic when you look at the 2-4-1 voucher:

Would you pay £195 to buy a voucher which allowed you to get two Avios redemptions (BA planes only) for the miles of one?  This would save you 180,000 Avios on two Club World tickets to Tokyo for example.

This is clearly a ‘no brainer’ for anyone who understands the value of Avios.  180,000 Avios are worth at least £1,800 if used sensibly.  More importantly, if you wouldn’t otherwise be able to earn enough Avios for two Club World tickets to Tokyo, it lets you undertake a trip that would otherwise be impossible.

You need to spend £10,000 to trigger the voucher each year, of course, but you need to channel your credit card spend somewhere anyway.  The £195 fee also lets you earn 50% more Avios on every purchase – 1.5 per £1 – compared to the free British Airways American Express card and you get a 2-4-1 voucher valid for two years rather than one year.

If you think that spending £10,000 on an American Express card in a year is tricky, don’t forget about BillhopWe covered this service again a couple of weeks ago – it allows you to pay any household bill (not a mortgage or credit card) with an Amex card in return for a fee.  This is a good way of running up a few thousand pounds of Amex spend if you are short of £10,000.

Should you pay an annual fee for a credit card?

And some other examples …..

Here are some other examples where, if you treat the fee as paying for a benefits package, it makes sense:

Would you pay £99 per year for Platinum status (2nd tier) in IHG Rewards Club – which usually needs $4,000 of ex-VAT hotel spending – plus a free night in any of their hotels, potentially worth £250+? Especially if you got £100-worth of IHG Rewards Club points in the first year you signed up?

When you put it like that, the IHG Rewards Club Premium Mastercard sounds like a good deal.  You need to spend £10,000 per year to trigger the free night, but you need to put your credit card spend somewhere.

Would you pay £140 per year for the right to upgrade two Virgin Atlantic economy redemptions to premium economy, or to get a 2-4-1 voucher on economy redemptions?  Especially if you also got 15,000 Virgin Flying Club miles in the first year for signing up?

When you put it like that, the Virgin Reward+ Mastercard looks good value (you need to spend £10,000 to trigger the two vouchers).  That’s before you factor in the excellent ‘1.5 miles per £1’ earning rate.

Would you pay £575 per year to get travel insurance for your family and five other nominated people under 70 years old, car hire insurance, Hilton Gold, Marriott Gold, Radisson Rewards Gold, Shangri-La Jade, Melia Gold, Eurostar lounge access, Delta lounge access, two Priority Pass cards each admitting two people for free to 1000 airport lounges, and exclusive benefits at luxury hotels including guaranteed 4pm check-out?  Especially if you got 30,000 Avios or other miles in your first year?

This is clearly more of a ‘heavy hitters’ package, but the American Express Platinum charge card will give you all of the above.

Is it worth paying a fee for a credit card?

Not all credit cards justify their fee …..

I don’t want to suggest that all fee-bearing miles and points cards justify the annual fee.

American Express Preferred Rewards Gold is harder to justify after the free first year.  You are paying £140 from year 2, with the main benefit being two free airport lounge passes.  It might work if you spend £15,000 to trigger the annual bonus of 10,000 Membership Rewards Points, but I would consider it marginal.

The Lufthansa Miles & More Diners Club and Mastercard has a £79 fee.  For the first year it is worth it for the 10,000 miles sign-up bonus.  After that, even the strong earning rate of 1.25 miles per £1 doesn’t justify the fee unless you are spending a chunky sum each year.  For many people the only reason for paying £79 is that having this card, and using it once per month, stops your Miles & More miles expiring.

The Starwood Preferred Guest American Express card has a £75 fee.  Similarly, for the first year it is worth it for the 30,000 Marriott Bonvoy points sign-up bonus.  Even at 3 Marriott Bonvoy points per £1, however, you need to a big spender to justify £75 for Year 2+.

However, if you can get your head around the concept of paying an annual fee, you will find that many miles and points card do offer value for money.

Should you pay an annual fee for a credit card?

Learn more about the credit cards mentioned above

Here is the legally required interest rate information on the credit cards mentioned above, together with links to our detailed reviews:

American Express Preferred Rewards Gold – sign-up bonus of 10,000 Membership Rewards points when you spend £3,000 in three months – apply hereour American Express Gold review is here – representative APR 57.6% variable including fee (free in year 1) based on a notional £1200 credit limit, interest rate on purchases 22.9% variable

The Platinum Card from American Express – sign-up bonus of 30,000 Membership Rewards points when you spend £4,000 in three months – apply hereour American Express Platinum review is here – this is a charge card which must be repaid in full each month

British Airways American Express – sign-up bonus of 5,000 Avios when you spend £1,000 in three months – apply hereour BA Amex review is here – representative APR 22.9% variable

British Airways American Express Premium Plus – sign-up bonus of 25,000 Avios when you spend £3,000 in three months – apply hereour BA Amex Premium Plus review is here – representative APR 76.0% variable including fee based on a notional £1200 credit limit, interest rate on purchases 22.9% variable

Starwood Preferred Guest American Express – sign-up bonus of 30,000 Marriott Bonvoy points when you spend £1,000 in three months – apply hereour Starwood Amex review is here –  representative APR 39.7% variable including fee based on a notional £1200 credit limit, interest rate on purchases 22.9% variable

Virgin Atlantic Reward+ Mastercard – sign-up bonus of 15,000 Virgin Flying Club miles after your first purchase – apply hereour Virgin Atlantic Reward+ review is here – representative APR 63.9% variable including fee based on a notional £1200 credit limit, interest rate on purchases 22.9% variable

Miles & More Global Traveller Diners Club and Mastercard – sign-up bonus of 10,000 Miles & More miles after your first purchase – apply here – our Miles & More Traveller review is here – this is a charge card and your balance must be cleared in full each month

Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history.  By recommending credit cards on this site, I am – technically – acting as a credit broker.  Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.

Save the £4.99 fee when you join Revolut via our special HFP reader offer
Virgin Atlantic and Delta changing US flight services from Heathrow, Gatwick and Manchester

Click here to join the 14,500 people on our email list and receive the latest Avios, miles and points news by 6am.

Amazon ad
About Head for Points

We help business and leisure travellers maximise their Avios, frequent flyer miles and hotel loyalty points. Visit every day for three new articles or sign up for our FREE emails via this page or the box to your right.


  1. How long does it normally take referrals (from Platinum) to post ?
    I have read 8-12 weeks but is it really that long ? Don’t really fancy keeping Plat. for another 3 months.

  2. Credit card related topic: Section 75.

    I’ve tried searching online for an answer to this, but no luck. Does anybody here know for sure, through personal experience, whether or not it’s possible to use two or more credit cards to split the bill on one purchase, and thereby be jointly protected by all of the involved credit card companies?

    • Sectioned says:

      Nope. But why would you need to be jointly protected? You can buy any item and pay cash, and as long as more than £100 is spent on the item [even if it is £9,900 cash and £100 credit card] then yoiu are covered under section 75.

    • Sectioned says:

      Or are yout trying to do some sort of fiddle, like the majority of posters on this board seem to want to do?!?!

      • Failure to pick up on something fairly obvious led to a snide insinuation of wrong-doing. Thanks for nothing.

        If multiple credit card companies were jointly liable, it might increase the chance of a successful claim without the need to waste time with the ombudsman. For example, if Virgin Atlantic reject the claim there’d still be a chance that HSBC would allow it.

        • I think bringing more parties into the transaction would just complicate matters. It would bring in a further line of communication and could slow down the settlement.

    • Genghis says:

      I started an Amex S75 claim once having paid on the Amex and the deposit on an MBNA card. Amex didn’t have issues with it.

    • Joseph Heenan says:

      I think it entirely depends on the retailer whether they’ll let you use multiple cards or not?

      In practice I think for most online transactions I think it’s rare to be able to use more than one card. When you’re dealing in person it’s more possible. e.g. in the past I’m sure I had no problem getting a travel agent to split a relatively large transaction across different cards due to not having sufficient credit on any one card.

      • Shoestring says:

        yep the point is ‘jointly & severally’ covered – puts you in a very good position – the credit card is giving you very generous insurance if things go wrong, including cover for your consequential damages

        also, the minimum to spend on the credit card is just £1, the purchase value must be between £100 and £30,000 (you don’t need to spend minimum £100 on the credit card)

        • Thanks, that was my thinking, but was concerned I couldn’t find any mention of it/previous examples on the internet. How sure are you that the legislation backs up the principle?

      • It’s an upcoming £21k purchase sans finance at a car showroom. I believe they are used to customers splitting across cards in places like that. They better be anyway, because I’ll walk if they say no. I negotiate hard, the way the government should have been since 2016…

  3. What would the recommendation be for a single person who spends 6k a year on credit cards?

    2.5k spending on airline travel (oneworld) – never going to spend 10k or 15k a year. Thanks

    • Are you sure? There are so many ways to boost spending – supermarkets, gift cards, council tax, utility bills (even if using visa/MC rather than Amex. I’ve found I can even pay my £300 pm PCP payment for my card on MC which obviously boosts it a lot. And if you get Curve and withdraw £200 pm, that’s £2400 per year covered.

    • Assuming you can do that 6k all on AMEX, then one of the free cards with a reward scheme which pays around the 1% mark?

      But you could also look at increasing your spend. If you know you can spend £6k pa through normal spending and you go for one of the MasterCard or Visa options above, you can easily “spend” an extra £1,200 pa by using a Curve card for the free allowance. Can you pay your utility bills with a minimum direct debit and pay the rest by credit card? Do you regularly dine out with people who pay cash or by debit card? Take the cash or get them to send you the money and put it all on your card. If you’re a bit short of the target, buy gift cards for the supermarket you always shop at.

    • Don’t pay any fees, pick up occasional sign up bonuses if you can, stick (unless you earn miles via work) to a transferable currency so you’re not forced into a scheme where you may never get enough for a reward.

  4. Bobster says:

    I’m going to be £2k short of a Plat Business spend bonus. Aside from front-loading by buying gift cards etc. Is there any other way? What would happen if I bought a fully flex flight and refunded it?

    • Bonus is removed if you go under the spend target via a refund.

    • You’d need spend the 2k by other means (even after the deadline) before you refund the flight. They’d take the bonus back if you don’t

    • Buy a fancy laptop from Argos. Don’t open it. Take it back within the 30 days and tell them you don’t need it any more as you lost your job. Put a different card in for the refund. Try a debit card first, but if they notice it’s not an Amex then put in a different Amex.

      If they notice and you don’t have another Amex, then it won’t work of course.

      • Don’t do that using a Curve card for the refund.

        • I was refunded through curve to my ihg plat. Not changing the cards though. Even Managed to get 15£
 referrall bonus processed as a refund

  5. James D says:

    Given the recent changes I am now focusing on referals. What is the accepted wisdom about how long new cards need to be kept open for and how much they need to be used before cancelling? I would be looking at this as a long-term strategy and so keen not to annoy anyone.

    • Not sure but wouldn’t be trying a long term strategy – rules change too often. I’d do a mixture of referrals and longer churning with breaks away from amex

  6. With regard to paying a fee for a credit card, I think people have such a mental block about this that many won’t pay it until they’ve actually experienced the benefits. Even my OH, who has now had a good couple of years of premium travel, is still a bit iffy about the BAPP fee. I find it helpful to add it to the cash element of our reward flights using the 2 4 1 then compare that to 2 revenue tickets. As the article says, the difference is stark – £1500 for taxes/fees plus BAPP fee compared with (for example) £7000 for 2 flights to Miami, going out in F and back in J at peak period.

    • Spurs Debs says:

      I agree with you Anna, my flights next year to Tokyo out in F back in J would cost £8700, I paid with 241 voucher I think it was 180k points and £1200 in taxes/fees. Add in the £195 card fee and I’m still quids in!

      • Joseph Heenan says:

        When I work it out I always compare against the cheapest J flight as I’m highly unlikely to pay cash for F (unless it was a massively good offer).

        Travelling F for points is still a nice bonus that you can attach some value to though, alongside the ability to cancel redemption bookings for an almost full refund.

        My last redemption also to Tokyo, comparing 241 F redemption to J cash flights, lumping in £195 card fee, I worked out I got 1.1p per avios, which I’m happy enough with. (I’m in ‘the regions’ though so the cheapest comparison is almost always KLM, anyone near Heathrow that would want to fly direct would find cash prices from Heathrow are generally higher and hence would do a lot better than 1.1p).

    • You need to compare that with a good Qatar airways sale fare or something you would actually fork out for. No-one with any sense would pay 9 grand for a flight to Tokyo.

  7. I’ve now closed all my AMEX cards so I can re-start the clock on earning points through sign-up bonuses in two years time.

    I will however need an AMEX card soon to pay for some reward flights and I do like to have an AMEX for occasional spends such as Costco.

    Now the Costco card has gone, what AMEX card can I get that will not stop me earning sign-up bonuses?

    • Harry T says:

      Use a friend or family member’s Amex? Failing that, the SPG card won’t block you from the Platinum and BAPP bonuses, but will block you from an SPG bonus for another 24 months after cancelling.

      • Any options without a fee that won’t stop sign up bonuses on BAPP and PLAT?

        • I don’t know if one but this could be a good opportunity to get the SPG, warm the sign up bonus fast (if you’re eligible) then cancel after a month!

          • earn, not warm (still early where I am) 😂

          • I’m looking for a card I can just keep long term for occasional Costco shopping and paying the fees on reward flights.

            I’m not bothered about earning points of any kind with this card as I will concentrate on the two year cycle with BAPP and PLAT for AVIOS.

          • Shoestring says:

            your ‘dilemma’ can be easily dismissed 🙂

            you don’t need an Amex card to pay fees on reward flights – only on 2-4-1s – you won’t be earning any more 2-4-1s without BA Amex and if you have a 2-4-1 voucher waiting to be used, just borrow a cards from somebody to pay the fees as already suggested

            just use another points or cashyback card to earn a few points at Costco, eg the free Virgin card, can’t see remotely why you need an Amex card to go shopping at Costco

          • I have an outstanding 2-4-1 voucher to use soon and all my reward flights to date have been through a 2-4-1.

            Costco only accept AMEX credit cards and that’s why I would like to have a long term AMEX card in my back pocket that doesn’t have a fee or interfere with BAPP and PLAT future sign up bonuses.

          • Does holding the free basic AMEX charge card prevent you from getting sign-up bonuses?

          • Yes, if you activate Membership Rewards on it.

          • Shoestring says:

            Costco UK now accepts Visa/ MC/ Maestro

            In USA they switched away from Amex-only a year ago ISTR, I think they prefer Visa now

          • Costco warehouses will only take AMEX credit cards.

            They will take all major credit cards online.

          • Shoestring says:

            well then, you’d be better off paying in cash – you stated already that you want a free Amex card, but also want to restart the 2 year clock, sometimes you can’t reconcile all these wishes

            in any case we can’t see Amex continuing its relationship with Costco more than a few months

        • Nectar (Year 1 only)

          • Hi Rob

            Can you confirm that holding the Nectar card long term won’t stop me receiving any sign up bonuses on BAPP and PLAT?

            Thanks. Lee.

          • Yes. Plat only looks at Membership Rewards card, BAPP only looks at BA cards.

          • Shoestring says:

            but you said you needed a free card and it’s £25 in year 2, so not sure about your ‘long term’ requirement

    • I kind of leaves me with the basic card which is no fee or paying £25/year for the nectar card.

      Do any of these cards prevent sign up bonuses on BAPP or PLAT?

  8. Credit card acquisition: i’m homing in on 60 years of age, and i already have several credit cards, ie my noddle credit report says i’m extended. they’re not taking into account my property income as most of the world doesn’t do that. so despite a perfect 100% record of payment, never missing a bill and owning my own home my application for virgin premium card was rejected, with a dont try again for at least 6 months… sort of note.
    different companies have different criteria. what kind of criteria does BA have for its premier card?

    • Harry T says:

      Virgin have terrible systems for approving people for cards. They rejected me whilst I was holding the Platinum Amex. I wrote a letter to them on Rob’s advice and they approved me for the Rewards Plus in the end.

      Regarding Amex, you can use their eligibility checker on their website to assess your odds of being approved. In my experience, if you hold another Amex, you always seem to get approved for another one (though this may not hold true if you have a lot of Amex cards or big credit limits).

      • Thanks Harry I may give that a try…. i’m shuffling the existing debt to 0% offer on MBNA and will close down at least one card, to improve the optics.

  9. I am thinking of cancelling the ihg paid card, as ihg status doesn’t really get you anything and i didn’t get 10k through it this year. I have about 4 days before the statement is generated with next years fee so I guess I have to move fast.

    How do I cancel – nothing is clear on the website. Is it just a matter of phoning the call centre? can they do it quickly enough to stop being charged? can i be “downgraded” with the same card number to keep ihg gold or is it a case of totally cancelling and then applying later should i wish to? (not really sure I could be bothered, but if I can keep the same card no and not pay the fee that’s win-win)

  10. I think the Gold is worth keeping but depends how you can use it. Our travel and foreign spend puts us over the 15k spend plus we pick up 10k bonus points =25k minimum without including triple points. The free lounge passes we rarely use but waiting for the yearly bonus is a niggle. The 140GBP yearly fee after 1st year is mitigated by cash offers via Amex so we can’t complain as it stands.

    • Would it not be worth cancelling once you get the anniversary points and either reapply or even better refer a partner to get another year free plus referral points

      • Shoestring says:

        it’s my Gold card that keeps getting me £25 off £40 @Amazon so I am rather fond of it 🙂

        Had that over 20x in the last 2 years

        add on the lounge passes (which sometimes they don’t even charge you for once you use up the free 2…shss 🙂 )

      • We do refer each other and put each on as supps which we get extra points for, but then it’s a waiting game for the bonus. Also as the great Shoestring said there are other benefits if you look for them!. It’s the card that just keeps giving.

  11. OT: report for BJ and TripRep….checked out of a Hilton yesterday (and checked into another today). Everything triggered- I got the 5K/night resort points and 2.5K “media offer” as they call the promotion. So I assume the other 5K will trigger when I check out today. This was very good as I booked the resort with points and got over 30K back with the 2 offers triggering. I was worried it might not work on reward stays but it does.

Please click here to read our data protection policy before submitting your comment.