There was a time, not too long ago, when breaking even with a travel rewards card was the goal. Let me explain.
The ability to earn points with your purchases was enough reason to justify an annual fee. In fact, for years, that was all the American Express Green Card offered.
The Rise of Added Perks
In the early 2000s, credit card companies started sweetening the deal to attract more customers. Instead of just earning points, cards began offering tangible benefits like free hotel nights and waived checked bag fees. These perks elevated the value proposition and made paying annual fees more palatable.
Co-branded credit cards quickly gained popularity. These cards, typically costing $50 to $100 annually, provided benefits that matched or exceeded the fees. Hotel credit cards, in particular, exemplified this trend. Take the IHG Select Card, for instance—for just $49 a year, you could get an unlimited free night certificate. Similarly, Marriott and Hyatt offered free night certificates with their cards, making these fees feel negligible compared to the value provided.
Although many of these free night certificates are now capped to exclude more expensive stays, they still offer exceptional value relative to their cost. For many, this marked the beginning of a shift toward credit cards providing perks that go far beyond simple points earning.
American Express Changes the Game
But it was American Express that redefined the landscape, pushing the industry to where cards must offer significantly more value than their annual fees. Breaking even is no longer enough.
Take the Platinum Card, for example, with its hefty $695 annual fee. At first glance, that seems excessive. Yet, the card is more popular than ever. Why? Because Amex advertises over $800 in upfront value, including credits that cover streaming services, airline incidentals, and prepaid hotel bookings. These alone help justify the annual fee for many cardholders.
And that’s just the start. The Platinum Card also offers unmatched travel benefits, such as top-tier lounge access, including the Centurion Lounge network and Priority Pass lounges. Cardholders enjoy automatic status with hotel chains like Marriott Bonvoy and Hilton Honors and elite benefits with car rental programs like Hertz. Add in TSA PreCheck and CLEAR credits, and the travel perks alone can save frequent travelers significant time and money.
The list doesn’t stop there. Lifestyle perks like annual credits for Saks Fifth Avenue purchases, Equinox memberships, and Walmart+ subscriptions add even more value. While some of these benefits may feel niche, for those who take full advantage, the Platinum Card transforms from a high-fee card into an essential tool for travel and everyday savings.
While it’s fair to call the Platinum Card a glorified coupon book—requiring you to redeem each credit to unlock its full value—the value is undeniable if you’re diligent. In my second year with the card, I calculated almost $900 in benefits, excluding credits I didn’t use. Here’s how I did it.
The Struggle for Competitiveness
This shift has made other, otherwise excellent, cards less competitive. For example, the Capital One Venture X offers solid break-even value: a $395 annual fee offset by a $300 travel portal credit and 10,000 points (worth at least $100). You’re ahead without trying. But in this new landscape, “just breaking even” feels inadequate. Even with additional perks like lounge access (albeit less extensive than Amex), TSA PreCheck, cell phone protection, a PRIOR subscription for curated travel experiences, and a 6-month membership with The Cultivist for museum access, it struggles to feel revolutionary.
While Capital One is clearly trying to add value in ways similar to American Express—by offering curated travel experiences and memberships like The Cultivist—it doesn’t quite hit the same mark. These benefits might appeal to some cardholders, but for most of them, these perks lack the broad, impactful value that drives loyalty to a particular card. They feel more like added fluff than substantial benefits to justify the card’s annual fee. While Amex’s strategy offers a wide range of high-value perks that resonate with a broader group of consumers, Capital One’s efforts, though well-intentioned, don’t feel as substantial or comprehensive.
Entry-Level Cards Feel the Pressure
Even entry-level travel cards now feel the pressure to deliver oversized value.
Take the Sapphire Preferred. Once the best travel card on the market, it’s now an afterthought for serious points and miles collectors. Still, it has evolved to remain competitive. Beyond travel and dining bonuses, it now offers a $50 annual credit for hotel bookings through Chase Travel and a complimentary DashPass membership (worth $120 annually) for reduced fees on DoorDash and Caviar orders. That’s quite a package for a $95 annual fee. And yet, many argue that the Sapphire Preferred needs a significant refresh to better compete.
What Comes Next?
This new baseline of oversized value has no apparent endpoint. Today, we expect at least 2% back or better on almost all purchases and categories. No-annual-fee cards now offer 5x points on select categories. Where can we go from here? What’s next?
There are whispers of cards covering passport fees or adding live entertainment credits. Both ideas seem plausible, and I wouldn’t be surprised to see these perks emerge by 2025 or 2026.
Your Thoughts
What about you? Do you think we’ve gone too far, or do you thrive on the challenge of maximizing every statement credit?
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