Is It Worth Paying Yearly Fees for a Credit Card?

This really depends on what kind of consumer you are and your individual system of value. As everyone knows, people all value things differently. For one consumer, a certain product may be priceless but for another consumer that same product could be as valuable as a paper weight. We all have our own value systems and for many those value systems define what and how we spend our money. If you don’t value something, you just simply won’t spend money on it.

Utility

What most consumers associate with value comes from a certain utility. When you receive a set amount of utility from a credit card, you might have no problem paying a yearly fee for it. If the value derived is worth the yearly fee, the credit card company will get repeat customers and new business. If it’s not, the credit card company will lose customers and see a decline in business. And utility can be defined as anything, if a certain credit card gives the allure of being “prestigious” and highly sought after, that is also utility. When consumers associate prestige with that credit card, that is in its own way also a utility. Some consumers might make charges of up to $250,000 a year or pay an exorbitant yearly fee to be able to own a prestigious black card for that sense of prestige.

Rewards Based Utility

Many consumers will pay yearly for a credit card if there is a reward that they cannot get somewhere else or a particularly unique offer that exists for credit card holders. Otherwise, if your credit card is not competitive, the marketplace should slowly but surely leave your credit card in the past. Consumers have gotten savvy enough where they no longer need to pay yearly fees for a credit card that doesn’t offer anything special. And for many this is what tends to happen overtime, as rewards can change on a rolling basis. Once those highly touted rewards are no longer available consumers may feel the need to ditch the credit card and its high yearly fee.

Plastic is Plastic

There are some consumers in the marketplace who will never pay a yearly fee for a credit card. For these consumers, they feel that “plastic is plastic” and no matter how many points they get back from taking Uber or dining out they just don’t feel the benefit is there for them. This conservative group of people make use of credit cards to the best of their abilities and try to maximize what they can with credit cards that don’t cost to maintain open lines of credit with.

Whether you choose to pay a yearly fee for a credit card or not is dependent on you and your value system. In recent years, the credit card marketplace has gotten very competitive and it may no longer be worth doing so. More credit cards offer good cash back rewards, travel-based rewards and points-based earnings without having to pay a yearly fee. The choice is ultimately up to you.