Why I Gladly Pay Over $1,000 per Year in Credit Card Fees

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If a friend tells you they pay over $1,000 each year in credit card fees, your first thought might be that they're doing something very wrong. Or that they're struggling with credit card debt. Either way, it doesn't sound good.

I write about credit cards for a living, and I pay over $1,000 per year in fees for mine. It goes against the traditional advice to keep fees to a minimum, but I have a good reason for it. Here's why it works for me, and why fees aren't always bad when you're using quality credit cards .

They're all annual fees

The only reason I pay so much in fees is because I have several cards with annual fees. A couple of them are on the expensive side, too. They're top travel cards with hefty price tags and lots of features.

So, even though I pay quite a bit in fees, it's worth clarifying that:

• I'm not paying any credit card interest. I pay all my card balances in full every month.
• I'm not paying foreign transaction fees. I always use cards with no foreign transaction fee on international spending.
• I'm not paying cash advance fees, balance transfer fees, or any other types of fees.

If I was paying over $1,000 per year in interest on credit card debt, I'd work on paying that debt off ASAP. You don't get any value from paying interest; it's just a fee that costs you extra. The same is true with most credit card fees, including foreign transaction fees and cash advance fees.

But you can get value from paying an annual fee. Credit cards with annual fees normally have more perks than no annual fee cards. If you're able to use those perks, you could potentially save more money overall.

I'm getting my money's worth from all of them

I always make sure I'm coming out ahead with my credit cards. Every year, I check that the value I'm getting from a card's benefits is more than I'm paying for the annual fee. If not, I downgrade it or close it.

For example, my most expensive card is a Hilton hotel card that costs $550. It includes a complimentary free night award every year and automatic Diamond status. Thanks to Diamond status, I get free upgrades when available and either free daily breakfast for two or a daily food and beverage credit.

Those benefits, and the hotel points I earn, save me far more than $550 every year. Just last month, I saved over $2,500 staying at a five-star hotel thanks to my Hilton card.

Spending credits are another way you can get your money's worth from cards with annual fees. One of my favorite travel cards costs $395. But it has a $300 annual credit for bookings through the card issuer's travel portal and offers $100 worth of rewards each year. Because I always use those benefits, the card pays for itself.

How to decide if credit card fees are worth it

Avoiding credit card fees is a good general rule, but there are exceptions. There are two common situations where paying a credit card fee makes sense:

• A credit card has an annual fee, but the benefits will save you more money than the cost of the fee.
• A credit card has a balance transfer fee, but it also has a 0% intro APR on balance transfers that you can use to pay off credit card debt.

In these situations, do the math to see if paying a fee is worth it. If a credit card has a $95 annual fee, add up the value of the benefits it offers and the rewards you expect to earn. If it has over $500 in benefits that you're confident you'll use, then that $95 annual fee is well worth it.

Or, let's say you're paying off $5,000 in credit card debt at a 20% APR. You find a balance transfer card with a 0% intro APR for 18 months. Most balance transfer cards charge a 3% to 5% balance transfer fee, but you'll save much more than that on interest charges.

If you want to keep it simple and avoid fees, there are plenty of no annual fee credit cards available. But credit card fees aren't always a bad thing. A balance transfer fee can get you a better deal on paying off debt, and an annual fee could get you a card with more money-saving benefits.

We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .