Is a credit card annual fee worth it?
A fee card must earn more than your alternative after costs. Subtract the alternative card's rewards as well as the new card's fee; earning enough to cover the fee alone does not mean switching is worthwhile.
By WealthGeist ยท Calculation methodology, not an issuer endorsement.
What to check
- Separate first-year offers from recurring annual value.
- Count a travel credit only when you would naturally use it, not at its advertised face value.
- With flat rates and no caps, break-even spending is the extra annual fee divided by the difference in reward rates. A $120 extra fee and a 1 percentage-point advantage means $12,000 a year. Category caps and benefit conditions require the full calculation.
A worked comparison
Illustrative annual spending: $12,000 at grocery stores, $6,000 dining and $12,000 other purchases. Balance paid in full. No welcome offers, benefit credits or service relationships included. Actual merchant coding may differ.
| Card | Rewards | Annual fee | Ongoing value |
|---|---|---|---|
| Scotiabank Gold American Express Card | $1,020 | $120 | $900 |
| CIBC Dividend Visa Infinite | $720 | $120 | $600 |
| Scotia Momentum Visa Infinite | $660 | $120 | $540 |
| Scotiabank Passport Visa Infinite | $480 | $150 | $330 |
| Tangerine Rewards World Elite Mastercard | $390 | $120 | $270 |
Calculated from the verified catalog at build time. This example does not establish the best card for you. See assumptions and methodology.
Sources and corrections
Each linked card page lists its issuer source and verification date. Unsupported or stale terms are excluded from calculations. Read how calculations and corrections are reviewed.