Nobody likes paying credit card annual fees, but some cards lessen the sting by giving you free 'travel credits' every year, to spend on flights, hotel stays or car hire, the value of which can often surpass the annual fee paid.
For example, if your card has a $195 annual fee but a $200 travel credit – and you’d have otherwise spent $200/year on travel anyway – the card practically becomes ‘free’, because for the same amount of money spent, you’re getting your travel booking and a points-earning credit card, which rewards you throughout the year.
Here’s what’s on the table right now.
1. AMEX Platinum charge card + AMEX Platinum Reserve credit card
The feature-packed American Express Platinum charge card includes a standard travel credit of $300 every year, alongside other perks like unlimited lounge access with Virgin Australia, Delta Air Lines and Priority Pass, to help justify its pricey $1,200 annual fee.
However, Platinum charge cardholders are also entitled to apply for a free Platinum Reserve credit card from AMEX as well (contact AMEX once you have the Platinum charge card), which offers its own $400 travel credit. That means for the one $1,200 annual fee, you’ll getting $700 of that back in travel credits, which puts the ‘cost’ of the charge card at $500.
That’s barely more than you’d pay for a Virgin Australia lounge membership to access those lounges – or an unlimited Priority Pass membership for global lounging privileges – so if you make good use of these, or the card’s many other benefits, it’s easy to come out ahead while still paying a four-figure fee!
2. American Express Qantas Ultimate credit card
At $450/year, the AMEX Qantas Ultimate credit card is one of the pricier choices in the market, but that fee is offset with the inclusion of a $450/year Qantas travel credit, which you can use towards a flight booking with Qantas: just not with other airlines, or on hotel stays or car hire.
Trick is that you just have to make your flight booking via the American Express Travel website to use that travel credit – rather than it being a traditional Qantas ‘flight voucher’, as such – but the prices you’ll see here are the same as on the Qantas website: and you’ll still earn points and status credits on eligible fares.
On top, you’ll also earn a solid 1.5 Qantas Points per $1 spent on the card on everyday purchases; 2.5 Qantas Points per $1 spent directly with Qantas (such as on flight bookings made via the Qantas website), and 55,000 bonus Qantas Points for eligible new cardholders who apply and spend $3,000 on the card within the first three months.
3. American Express Explorer credit card
Prefer to earn frequent flyer points with other airlines like Virgin Australia or Singapore Airlines instead? Then the American Express Explorer credit card is worth a look, as you’ll earn the equivalent of 1.5 frequent flyer points per $1 spent through the Membership Rewards Gateway program.
There’s a $395 annual fee to pay, which is again more than negated by a $400 yearly travel credit, and you can also pocket 50,000 Gateway points (equal to 37,500 Velocity points or KrisFlyer miles) when you apply and spend $3,000 on purchases within the first three months.
Other perks on this card include two complimentary visits to the AMEX Lounge at Sydney Airport when flying with any airline, free smartphone screen insurance when you buy your phone or pay your contract using the Explorer card, and more.
4. American Express Platinum Edge credit card
The American Express Platinum Edge credit card isn’t overly expensive at $195/year, but rather than paying a fee each year and getting nothing back in return, this card also offers – you guessed it – a yearly $200 travel credit.
You can also earn the equivalent of three frequent flyer points per dollar spent at major supermarkets, again in programs like Virgin Australia Velocity and Singapore Airlines KrisFlyer, via the Membership Rewards Ascent scheme.
There’s no points capping, and you’ll also pick up two frequent flyer points per dollar spent when filling up at petrol stations; one point per $2 spent on utility, insurance and government payments, and one point per $1 spent everywhere else.
5. American Express Velocity Platinum credit card
While the AMEX Velocity Platinum card doesn’t have a ‘travel credit’, as such, it does still include a complimentary return Virgin Australia domestic flight every year, so if you’d have taken a return flight anyway – and will make use of the card’s other perks like two Virgin lounge passes – you’ll again come out ahead.
A $375 annual fee applies, with an earn rate of 1.5 Velocity points per $1 spent on most everyday purchases; 2.5 Velocity points per $1 spent on Virgin Australia flight bookings, and an offer of 50,000 bonus Velocity points when you apply, are approved and spend $3,000 within the first three months.
Spending $50,000 per year also unlocks 100 bonus Velocity status credits, which could help you climb the frequent flyer ladder to Silver, Gold or Platinum status, or help you retain your existing status for another 12 months.