effective annual fee

When evaluating premium credit cards, the headline annual fee can be intimidating. But what if that number isn’t the real cost at all? The value you get from a card depends on the benefits you actually use. That’s why understanding your effective annual fee, the real cost after subtracting the value of credits and perks you’ll actually use, matters more than the raw sticker price.
In this post, we’ll break down how that math works and use two premium cards: the Chase Sapphire Reserve and the American Express Platinum, to show how effective annual fees can vary widely depending on your lifestyle.