Are Premium Travel Cards Just a Coupon Book? The Truth About Rising Annual Fees
For years, premium travel credit cards were the gold standard for frequent travelers. They offered a simple value proposition: a high annual fee in exchange for high-value benefits like airport lounge access, a generous travel credit and elite status perks. But if you’ve been paying attention to the credit card landscape, you’ve likely noticed a significant shift. Annual fees are skyrocketing, and what were once simple benefits have become a long list of specific, “use it or lose it” statement credits.
This trend is turning premium travel cards from elegant travel companions into complex “coupon books” that require work to unlock their full value. The question for many is no longer, “Is the card worth the fee?” but, “Am I being forced to spend more to just break even?”
The New Price of “Premium”
The days of a $450 or even $550 annual fee for a top-tier card are quickly fading. Card issuers are raising prices to new heights, and they’re not shy about it. The highly sought-after Chase Sapphire Reserve, for instance, has seen its annual fee climb from $550 to $795. Not to be outdone, the American Express Platinum card has held its $695 annual fee for some time, but recently announced major updates coming to the card. And in the world of credit cards, “major updates” is code for raising annual fees. Citi also threw their hat in the premium travel card ring with the recent release of the Citi Strata Elite that comes with a $595 annual fee.
It’s looking more and more like this is an industry-wide strategy to capture more revenue from cardholders. As consumers become savvier about using points and rewards, issuers have found new ways to ensure profitability. The answer? Statement credits.
The “Coupon Book” Strategy Explained
So, what exactly is a credit card “coupon book?” It’s a card that replaces a few broad, flexible benefits with a long list of statement credits tied to specific merchants or services.
Consider these common examples:
Rideshare & Food Delivery: Many cards now offer monthly credits for services like Uber or DoorDash. If you use them, great. If you don’t, that monthly credit is gone forever.
Lifestyle & Entertainment: Credits for services like Equinox gym memberships, streaming services like Disney+ or even specific retail stores like Saks Fifth Avenue have become standard.
Travel-Adjacent Credits: Instead of a single, flexible travel credit, you might get a credit for a specific airline, a particular hotel chain or a very limited list of travel partners.
The difference here is crucial. A simple $300 travel credit on the Chase Sapphire Reserve can be used on any flight, hotel or card rental. It’s easy and flexible. The credits on a “coupon book” card, however, dictate exactly where and when you can spend your money to get the credits.
The Illusion of Value
This strategy is a masterclass in behavioral economics. The credits are presented as valuable perks that easily offset the annual fee, but they’re designed to encourage increased spending where you may not have spent your money otherwise.
The math is simple though: a credit for a purchase you were already going to make is a real savings. A credit for a purchase you weren’t planning to make is a clever way for the card issuer to get you to spend. Banks and merchants partner on these deals because it’s a win-win for them. The bank gets a higher annual fee and a cut of the spending, while the merchant gets guaranteed traffic and new customers. For the average cardholder, it can feel like you’re being held hostage by your own card, constantly checking your spending to make sure you’ve used all your “free” money.
Who Wins and Who Loses?
This new model has clear winners and losers.
The Winners: The card issuers and their partner merchants, who get guaranteed revenue and new customers.
The Losers: The cardholder who signs up for a premium card without a clear spending plan and ends up spending more than they intended just to justify the annual fee.
The Savvy Few: For a small segment of consumers, often called “points hackers,” these cards can still provide immense value. If their natural spending habits align perfectly with every single credit, they can still come out ahead. But this requires constant effort and a willingness to conform to the card’s rules.
Re-evaluating Your Wallet
The era of simple, high-value travel cards is fading, replaced by a complex system of credits and incentives to spend more. Before you sign up for or renew a card with a high annual fee, take a step back and perform a personal spending audit. Consider the annual fee as “prepaying” for the credits that come with the card. Will you genuinely use enough credits without changing your habits to offset the annual fee? If the answer is no, it may be time to consider a different path.
Many excellent cards with lower annual fees offer flexible points and rewards, allowing you to use your money on what truly matters to you, not on a pre-defined list of coupons. The question is no longer just, “Can I get value from this card?” but “Will this card change my spending habits for the worse?”
Want to stay on top of all your credit card fees and help deciding if they’re worth it? Check out our other article, “How to Track Credit Card Annual Fees and Keep Your Wallet Lean,” for a step-by-step guide. If you’re looking for personalized advice on your entire credit card portfolio, consider booking a 1-on-1 strategy call with me here for a comprehensive review of your setup.