The myth regarding annual fees attached to credit cards is that they're ALL BAD. This is simply that - a myth - and frankly some annual fees are easily wiped out by the cash back and rewards benefits afforded by a particular card. This is the case with the popular new Barclaycard Arrival Plus™ World Elite MasterCard® which carries an $89 annual fee (waived the first year) but includes an introductory cash back offer that's equivalent to $500 when consumers spend $3,000 within the first 90 days.It doesn't take a degree in math to equate this to a more-than-worthwhile deal, assuming you will make $1,000 in purchases or more each month - enough to earn the 50,000 bonus miles being offered by this credit card. The fact that you're not even paying the annual fee during your first year of membership is a plus, but what if you had the option to pay no annual fee for a similar credit card?
Well, the Barclaycard Arrival Plus™ World Elite MasterCard® - which is quite similar to the Capital One® Venture(SM) Rewards cards and includes flexible redemption of miles for just about all travel purchases - actually offers a version of this card with no annual fee. And yet, given the ongoing and bonus rewards attached to each kind of card, I still believe you're actually better off paying the $89 annual fee to get the most out of this Barclaycard. That is, if you're certain you can meet the spending threshold during the first 90 days. Here's why:
- 50,000 Bonus Miles vs. 20,000 Bonus Miles
The Barclaycard Arrival Plus™ World Elite MasterCard® requires $3,000 in purchases within 90 days to receive the 50,000 bonus miles offer. The no annual fee version requires $1,000 in purchases during the first 90 days in order to earn the 20,000 mile bonus. 50,000 bonus miles equals $500 in travel according to Barclaycard, while 20,000 bonus miles equals $200 in travel. Advantage: Annual Fee if you can easily spend $1K per month anyway!
- 2 miles per dollar on all purchases vs. 2 miles per dollar on travel and dining purchases
The annual fee version of this card offers double points on all purchases, similar to the Capital One Venture Rewards Card. The version with no annual fee applies double miles to travel and dining purchases only. It's not a bad offer, but it's not nearly as lucrative as its annual fee counterpart. Advantage: Annual Fee
- $89 annual fee (waived the first year) vs. No annual fee
The lone advantage to the no annual fee version of this card is just that - No. Annual. Fee. Ever. Advantage: No Annual Fee
All other things remaining the same - the 12-month zero interest period applied to balance transfers made within 45 days, the ongoing interest rate starting at a 16.24% variable, and super easy miles redemption - the annual fee version of this card is simply better.
Even the most loyal annual fee-detractors can calculate that two years of annual fees are washed out by the difference in the bonus miles, and the ongoing rewards program of 2 miles per dollar on ALL purchases is far more lucrative. This is definitely one case in which paying the annual fee is the way to go.
Barclaycard Arrival Plus™ World Elite MasterCard®
$89 annual fee waived the first year. 2x miles per dollar spent and 50,000 mile sign-up bonus after spending $3,000 during the first 90 days.