Today I was presented with one of those offers for a credit card where by paying an annual fee of about $50 it mentions you can earn points for every dollar you spend. In this case though you need a lot of points to even get the equivalent of a real dollar. Ultimately you probably need to spend somewhere in the high four digits to even recoup the $50. And that is to simply break even when you think about it.
It does surprise me when people enroll into these types of credit cards and then mention how it’s so fantastic that they get rewards even if it is a scenario where they don’t use it enough to make it a good deal. I’m inclined to say most people should simply go with the no annual fee cards as most of them provide just as good rewards. If you think about it, for the average spender if you pay to get double the rewards to the point where you broke even technically you are still only getting one reward. Except now you basically guaranteed the company that you are going to spend another $50 with them when you wouldn’t have normally. Something to think about.
Unless you are using like a business credit card where you know you will be spending five if not six figures consistently then that would be a different story.