Premium Cards vs. No Annual Fee: The Breakeven Math

Is that $550 card worth it? Here’s how to calculate.

Breakeven Formula

(Premium Card Value - Fee) vs. (Free Card Value)

Sapphire Reserve ($550)

• $300 travel credit = $250 net fee
• 3X vs 1.5X earning difference on $10K dining/travel = $150 extra value
• 1.5¢ vs 1¢ portal on 50K points = $250 extra
• Lounges: 6 visits × $40 = $240

Total value above free card: $640 → Worth it

When Premium Isn’t Worth It

• You won’t use travel credits
• You don’t visit lounges
• Your spending is too low
• You won’t optimize redemptions

The Bottom Line

Premium cards can be worth it—but only if you use the benefits. Do the math for YOUR spending and travel patterns.