When Does It Make Sense To Pay Your Credit Card Annual Fee?

Aaron Wong

Aaron Wong

Last updated 18 March, 2019

It's usually a reflex action to request for credit card annual fee waivers – banks have even automated to streamline the process. But when does it actually make more sense to fork out that annual fee rather than request for a waiver?

Opinions expressed reflect the view of the writer (this is his story).

Let’s face it: no one likes paying annual fees on credit cards. The bank already earns from the merchant every time you swipe your card – why should you pay them for the privilege of doing so? So unpopular are annual fees that most banks in Singapore automate the process of requesting for waivers. Call up their hotline, punch a few buttons and get an instant verdict.

But not all annual fees can be waived. Although it may be relatively straightforward to get a waiver on an entry-level S$30,000 income requirement card, most higher tier cards come with additional benefits that make banks unwilling to waive the fees.

So today’s question is: when does paying a credit card annual fee make sense?

The difference between card-specific, bank-specific, and issuer-specific benefits

When considering whether you should pay an annual fee, it’s useful to classify the card’s benefits into three categories: card-specific, bank-specific and issuer-specific.

Here’s an example of applying that framework to the Citibank PremierMiles Visa card, which has an annual fee of $192.60. Suppose the bank refuses to waive your annual fee. Is it worth paying $192.60 to continue being a cardmember?

Credit card annual fee: When does it make sense to pay it? | SingSaver

Here are some benefits of being a Citibank PremierMiles Visa cardholder

    1. You enjoy two complimentary lounge visits a year, as well as 10,000 miles when paying the credit card annual fee.

      Credit card annual fee: When does it make sense to pay it? | SingSaver



    1. You enjoy access to Citi Gourmet Pleasures, which gives discounts as selected dining establishments in Singapore.

      Credit card annual fee: When does it make sense to pay it? | SingSaver



    1. You also have access to the Visa Signature Luxury Hotel Collection, a special booking channel which gives Visa Signature cardholders a US$25 F&B credit, late check out, room upgrades, complimentary breakfast and Wi-Fi.

      Credit card annual fee: When does it make sense to pay it? | SingSaver




However, Citi Gourmet Pleasures and the Visa Signature Luxury Hotel Collection are available to anyone who holds a Citibank credit card and a Visa Signature credit card respectively. There’s no need to specifically hold the Citibank PremierMiles Visa to get these privileges, and therefore it doesn’t really make sense to pay out of pocket for them.

In contrast, the two complimentary lounge visits and 10,000 miles are benefits that accrue only to holders of the Citibank PremierMiles Visa, which is why these are the ones you should take into account when deciding whether or not to pay that $192.60.

Long story short – don’t mistake bank- and issuer-specific benefits for card-specific benefits! It may sometimes be confusing which is which, but some close study will pay dividends.

Weighing card-specific benefits

With that in mind, let’s look at the card-specific benefits of a few different miles and points earning credit cards:































Card Annual Fee Miles Approx value of miles @ 2 cents each* Card-specific benefits
Enjoy high tea promotions with AMEX cards

AMEX KrisFlyer Ascend

$337.05 N/A N/A




AMEX Platinum Credit Card

$321 N/A N/A
    • One night stay at Swissotel The Stamford




Citi Prestige

$535 25,000 $500
    • Unlimited Priority Pass lounge visits for cardholder +1 guest
    • Airport transfer
    • 4th night free on hotel bookings




Citi PremierMiles Visa Card - SingSaver

Citi PremierMiles Visa

$192.60 10,000 $200 2 complimentary Priority Pass lounge visits

Standard Chartered Visa Infinite

$588.50 35,000^ $700 6 complimentary lounge visits

HSBC Visa Infinite


($488 for HSBC Premier customers)

35,000 $700
    • Unlimited Priority Pass lounge visits for cardholder and supplementary cardholder



    • Airport transfer and fast track





*Why 2 cents each? It all comes down to how you value a mile. Have a read of this article for more information!

^Given with first year annual fee, subsequent renewal gets 20K miles

You can see that certain cards already pay for their annual fee through miles given in return.



Where the SCB and HSBC Visa Infinite are concerned, do be cautious of the second year’s annual fee because the miles given for renewal are much less!

The 25,000 miles given with Citi Prestige are “only” worth $500, $35 short of its annual fee, but one can argue the benefit of having unlimited lounge access for yourself and a guest, up to 8 complimentary airport transfers a year with a minimum foreign currency spend of S$1,500 in a quarter (although this goes up to a whopping $20,000 effective 1 April), and the fourth night free on any hotel booking more than make up the difference.

The AMEX KrisFlyer Ascend is a bit of an interesting case. Paying the annual fee gets you a complimentary night’s stay at selected Hilton properties across Asia Pacific. Depending on where you’re staying, that night could be worth anywhere from ~$60 (HGI Kuala Lumpur) to $1,300 (SAii Lagoon Maldives, Curio Collection). Choose wisely!

Given how easy it is to get lounge access with other cards that offer easier fee waivers (eg DBS Altitude Visa, Citi PremierMiles Visa), I probably wouldn’t value the four lounge vouchers that come with the AMEX KrisFlyer Ascend too highly.

At the end of the day, value is inherently subjective. Some people may see the complimentary Swissotel The Stamford stay that comes with the AMEX Platinum Credit Card as a huge benefit, because it saves them money they’d otherwise have paid for a staycation. Others see it as pointless, because they’re not the staycation type anyway.

Final word about cashback cards

In the analysis above, we’ve been looking at paying the annual fee on miles and points cards. But what about cashback cards?

Let me put this as clearly as I can: Paying the annual fee on a cashback card never makes any sense.

Think about it. Suppose you’ve got a cashback card that earns a flat 1.5% rebate on everything, with an annual fee of $171.20. Then suppose you pay the annual fee because the bank refuses to waive it. You’re now starting the year in a net loss position, and you’ll need to spend $11,413 ($171.20 divided by 1.5%) just to get back to zero!

That’s insane, and it’s why I prefer miles over cashback cards, any day, everyday.

Bottom line

No one likes paying annual fees on credit cards, but on certain cards it’s pretty easy to recoup the costs through the benefits offered. You certainly shouldn’t be paying something for nothing (ahem cashback cards ahem), but if the value proposition makes sense, go for it.

Compare and apply for the best credit cards on SingSaver

Ready to apply for a new air miles credit card and get the most value out of paying your credit card annual fee? Compare and apply for the best credit cards in Singapore on SingSaver and receive exclusive sign-up bonuses on top the bank's own welcome gifts!

Compare Best Credit Cards

Read this next:

Top 6 Air Miles Credit Cards 2019

Credit Card Sign-up Bonuses: How to Maximise Miles with Big Ticket Spending

3 Air Miles Credit Cards with the Best Bonus Offers

AMEX KrisFlyer Blue v Ascend: Which is the Right Card For You?

Credit Cards With Free Airport Lounge Access: What You Need To Know

By Aaron Wong

Aaron started The MileLion to help people travel better for less and impress “chiobu”. He was 50% successful. This is his story.

Aaron founded The Milelion to teach people how to travel better for less, with credit cards, airline and hotel loyalty programmes. With 500,000 miles flown and counting, he’s keen to debunk the myth that you can’t travel in style without breaking the bank.


Use a personal loan to consolidate your outstanding debt at a lower interest rate!

Sign up for our newsletter for financial tips, tricks and exclusive information that can be personalised to your preferences!