Best credit cards for the annual fee

By , CardRatings contributor
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    American Express is a CardRatings.com advertiser.

    Even though it sometimes sounds absurd to pay money for the privilege of borrowing money, a handful of the best credit cards add enough value for cardholders to justify the cost of their annual membership fees.

    $: Starwood Preferred Guest® Credit Card from American Express

    In exchange for this card's modest annual fee, you'll earn Starpoints on eligible purchases at participating Starwood Preferred Guest hotels and resorts. Starwood's hotel brand roster now includes the stalwart Sheraton flag, the hip W Hotels chain, the Aloft airport lofts, and even the posh resorts of St. Regis and The Luxury Collection. Unlike many hotel chains, Starwood uses market-based pricing for rewards stays at its properties. Therefore, spending as little as $7,000 on the card can net you a room that would ordinarily cost $150 or more.

    Some rewards cards fans might suggest they can squeeze a little more value from competing rewards programs, especially when traveling to the handful of destinations not well served by Starwood hotels. However, if you redeem Starpoints exclusively for hotel nights, the SPG card offers one of the credit card industry's strongest rewards ratios. With generous bonus Starpoints packages for new cardholders, American Express and Starwood have developed one of today's most popular travel rewards cards. Terms and restrictions apply.

    Annual fee: $0 introductory annual fee for the first year, then $65

    $$: Barclaycard Arrival Plus™ World Elite MasterCard®

    The Barclaycard Arrival Plus World Elite MasterCard has sweetened its deal with a redemption bonus. Keeping your account in good standing means you get a 10 percent miles back when trading part of your balance for travel statement credits.

    Cardholders also get complimentary online access to their FICO scores, a perk that costs $7 or more every month from many credit reporting agencies. No foreign transaction fees on purchases made while you are traveling in another country means cardholders save 3-5 percent compared to many airline rewards cards. And Barclaycard, eager to expand their American footprint, will even waive the first year's annual fee for new customers.

    Annual fee: $0 introductory fee for the first year, then $89

    $$: Citi® Hilton HHonors™ Reserve Card

    Hilton and Citi teamed up to steal some thunder from the popular Starwood Preferred Guest® Credit Card from American Express, and a slightly higher annual fee can lead to big travel perks for brand loyalists. Like most hotel cards, the Citi Hilton HHonors Reserve Card offers bonus points for hotel stays: earn 10 HHonors Bonus Points per dollar spent on hotel stays within the Hilton portfolio.* With eligible brands like Hampton Inn, Doubletree, and Embassy Suites in the mix, it's easy to find places to stay that can multiply your earnings.

    However, this card's biggest benefit adds value to your journey from day one. As long as you are a cardmember you can get the benefits of HHonors Gold status. New cardholders can earn two weekend night certificates, redeemable at select hotels and resorts in the Hilton portfolio, after making $2,500 in purchases on the card within four months of account opening.

    Annual fee: $95

    While these cards offer a lot of value to many frequent travelers, those of us who do not travel often are better off comparing reward credit card offers with no annual fee.

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