When is it worth paying an annual fee for a miles and points credit card?
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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). You may accidentally miss a payment date occasionally, or your direct debit bounces, and run up some interest.
Paying for the privilege of generating this revenue for the credit card company may seem 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.

Taking the British Airways Premium Plus card as an example
Some people take one look at the £250 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. The card is currently offering 25,000 Avios for signing up when you spend £3,000 within 90 days. Many Head for Points readers would jump at the chance of buying 25,000 Avios for £250 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 £250 to buy a voucher which allowed you to get two Avios redemptions (BA planes only) for the miles of one? Especially if you got access to reward seats that non-cardholders can’t book? 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, and (180,000 x 0.8p) £1,440 if you turn then into Nectar points. 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.
Following recent changes, the voucher also works well for a solo traveller – you save 50% on the Avios required for a ticket for one person. In our Tokyo example, you would save 90,000 Avios in Club World.
You need to spend £10,000 to trigger the voucher each year, of course, but you need to channel your credit card spend somewhere.
Compared to the free British Airways American Express card, the £250 fee also lets you earn 50% more Avios on every purchase and earn double Avios on BA spend. You also get a 2-4-1 voucher valid for two years rather than one year and usable in ALL classes rather than just Economy.

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 £160 per year for the right to upgrade two Virgin Atlantic economy redemptions to premium economy, or from premium economy to Upper Class, or to get a 2-4-1 voucher on economy or premium 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 Atlantic Reward+ Mastercard looks good value (you need to spend £10,000 to trigger the annual voucher). This is 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, car hire insurance, Hilton Gold, Marriott Gold, Radisson Rewards Gold, Melia Gold, Eurostar lounge access, Delta lounge access, two Priority Pass cards each admitting two people for free to 1300 airport lounges, £100 per year to spend in Harvey Nichols, £300 per year to spend in selected restaurants and exclusive benefits at luxury hotels including guaranteed 4pm check-out? Especially if you got 60,000 Avios or other miles as a bonus in your first year, with a £200 Amex Travel credit thrown in for good measure?
This is clearly more of a ‘heavy hitters’ package, but the American Express Platinum charge card will give you all of the above. The ‘60,000 points + £200 travel credit’ bonus is only available to 25th October 2022.

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 four free airport lounge passes and 24 x £5 Deliveroo credits. It might work if you spend enough to trigger the spending bonuses of up to 12,500 Membership Rewards points per year but otherwise I would consider it marginal.
- The £240 annual fee for the Barclaycard Avios Plus Mastercard is trickier to justify after the first year if you are a big spender. The annual upgrade voucher is identical on the free card and the £240 card – the only difference is that the paid card triggers it at £10,000 of spend and the free card at £20,000 of spend. If you can hit £20,000 easily then the extra 0.5 Avios per £1 earned on your spending doesn’t offset the fee.
- The Marriott Bonvoy American Express card has a £75 fee. For the first year it is worth it for the 20,000 Marriott Bonvoy points sign-up bonus. Earning just 2 Marriott Bonvoy points per £1, you need to a big spender to justify £75 for Year 2+. The real value here is the 15 elite night credits you get each year – most people treat it as a cheap way of getting a head start on status renewal – but if you’re not chasing Gold, Platinum or Titanium Marriott status then this isn’t relevant.
These three examples show that not all fee-based cards necessarily offer long-term value. 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.

Learn more about the credit cards mentioned above

American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review

The Platinum Card from American Express
60,000 points AND a £200 Amex Travel voucher until 13th June! Read our full review

Barclaycard Avios Plus Mastercard
CRAZY 50,000 Avios for signing up (to 30th May) and an upgrade voucher at £10,000 Read our full review

British Airways American Express Premium Plus
25,000 Avios and the famous annual 2-4-1 voucher Read our full review

Virgin Atlantic Reward+ Mastercard
30,000 points bonus (to 13th June) and 1.5 points for every £1 you spend Read our full review

Marriott Bonvoy American Express
40,000 bonus points and a free night voucher – only until 30th May! Read our full review
Want to earn more points from credit cards? – May 2023 update
If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.
In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.
You qualify for the bonus on these cards even if you have a British Airways American Express card:
SPECIAL OFFER: Until 30th May, the sign-up bonus on the Barclaycard Avios Plus Mastercard is doubled to a crazy 50,000 Avios! Apply here.
SPECIAL OFFER: Until 30th May, the sign-up bonus on the free Barclaycard Avios Mastercard is doubled to 10,000 Avios. Apply here.

Barclaycard Avios Plus Mastercard
CRAZY 50,000 Avios for signing up (to 30th May) and an upgrade voucher at £10,000 Read our full review

Barclaycard Avios Mastercard
10,000 Avios for signing up (only to 30th May) and an upgrade voucher at £20,000 Read our full review
You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.
SPECIAL OFFER: Until 13th June, the sign-up bonus on The Platinum Card is doubled to 60,000 Membership Rewards points – and you get £200 to spend at Amex Travel too! Apply here.
SPECIAL OFFER: Until 13th June, the sign-up bonus on the Virgin Atlantic Reward+ card is doubled to 30,000 Virgin Points. Apply here.

British Airways American Express Premium Plus
25,000 Avios and the famous annual 2-4-1 voucher Read our full review

American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review

The Platinum Card from American Express
60,000 points AND a £200 Amex Travel voucher until 13th June! Read our full review

Virgin Atlantic Reward+ Mastercard
30,000 points bonus (to 13th June) and 1.5 points for every £1 you spend Read our full review
Earning miles and points from small business cards
If you are a sole trader or run a small company, you may also want to check out these offers:

American Express Business Platinum
40,000 points bonus and a £200 Amex Travel credit every year Read our full review

American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review

British Airways Accelerating Business American Express
30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

Capital On Tap Business Rewards Visa
Get a 10,000 points bonus plus an extra 500 points for our readers Read our full review
For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending.

Barclaycard Select Cashback credit card
1% cashback and no annual fee Read our full review
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