Whether your strategy revolves around welcome bonuses, everyday earn rates, or perks for cardholders, the best credit cards generally have the highest annual fees.

If the value is there, it’s worth shelling out for premium cards. But given the choice, we’d always prefer to reduce those costs whenever possible.

First year free is great, but it isn’t forever. We can use signup incentives to justify our new credit cards, but what about our keepers?

Luckily, the banks know they need to provide ongoing value to keep fee-paying cardholders on the hook year after year. Some cards have annual credits which offset the annual fee, either partially or entirely. This makes the decision to keep the card a lot easier.

American Express Platinum Cards

The big kahuna of the Canadian credit card scene, the American Express Platinum Card, has some of the best benefits in the business.

You get 2 Membership Rewards points per dollar spent on eligible dining and travel purchases, a complimentary Priority Pass membership with unlimited visits to airport lounges for you and one guest, automatic hotel status including Marriott Bonvoy Gold Elite and Hilton Honors Gold, and strong travel insurance.

I’d also venture that the Amex Platinum is the standard-bearer among Canadian credit cards as a status symbol. Whether or not that moves the needle for you, you can’t deny that the card is flashy, or that its exclusivity and branding have value.

To justify these perks, the card commands the steepest annual fee, recently increased to $799 (all figures in CAD). However, once you’ve gotten over the sticker shock, you’ll notice that the card has a $200 annual travel credit and a new $200 annual dining credit.

Its business variant, the Business Platinum Card from American Express, now also comes with a $200 annual travel credit; however, it didn’t get the $200 annual dining credit added to its list of perks during the most recent revamp.

To start off, the travel credit on both cards is extremely flexible and easy to use. You can apply it to any flight, hotel, car rental, or vacation package booked through American Express Travel Online or the Platinum Card Travel Service over the phone.

You have to use the credit when you make the booking; it can’t be applied later. However, it won’t be clawed back if your plans change and you have to cancel your reservation. Because of its versatility, I’d consider this credit as good as cash. 

On the other hand, the $200 annual dining credit on the personal Platinum is less flexible, as you can only use it at a list of “top restaurants” curated by Amex.

Most, if not all, of the restaurants on the list are high-end, and for a dinner for two, you’d probably still need to shell out more money in excess of the credit. 

Still, you can use the dining credit to justify the Platinum Card’s annual fee, and when combined with the travel credit, there’s an effective a net cost of $399. 

On the Business Platinum, the $200 annual travel credit makes the annual fee $599 instead of $799.

In both cases, that’s a high fee for a keeper card, but it’s actually on par with or lower than other top-tier cards. The TD Aeroplan^® Visa Infinite* Card, the CIBC Aeroplan Visa Infinite Privilege, and the American Express Aeroplan Reserve Card all have $599 annual fees.

If you prefer the wide-ranging all-round travel benefits of the American Express Platinum Card or Business Platinum Card over a slate of benefits that are more closely tied to Air Canada flights, the Amex Platinum cards are clear winners.

American Express Gold Rewards Card

In many ways, the American Express Gold Rewards Card is just a slimmed-down version of the Platinum Card. This doesn’t necessarily follow the per-ounce value of the actual precious metals, but in the world of credit cards, platinum always seems to carry more prestige than gold.

With an annual fee of $250, the Gold Rewards Card is a bit more bearable to anyone who might balk at the $399 net annual fee on the Platinum Card. Throw in a $100 annual travel credit and some other perks, and $150 is well within most people’s realm of comfort.

The annual travel credit can be used in essentially the same way as the Platinum’s. You have to apply it during the booking process on American Express Travel Online, and it doesn’t get clawed back if your plans happen to change and you refund your booking.

When you consider the card’s other perks, including four free visits to Plaza Premium Lounges per year and a $50 NEXUS rebate every four years, there’s a decent amount of value to be found at a lower cost than the Platinum Card.

Just be sure to look at your spending patterns, as you may wind up better off earning 5 points per dollar spent on food and drink with the Cobalt Card rather than the 2 you’d get with the Gold Rewards Card.

Big 5 Banks: Travel & Lifestyle Credits

Let’s take a look at the travel credits, or lack thereof, offered by Canada’s Big 5.

CIBC

In a similar vein to the Amex Platinum Card, the CIBC Aventura Visa Infinite Privilege also has a $200 annual travel credit, bringing the card’s annual fee down from $499 to a net cost of $299. However, it’s not quite as flexible as the Amex Platinum or Gold credits.

You have to book by calling the CIBC Rewards Centre, where you can book flights, hotels, car rentals, vacation packages, and cruises. Because CIBC’s travel agency is making the booking on your behalf, they have to use agency rates and agency booking portals.

That means it’s not always easy to attach your loyalty number to a flight or hotel booking. Unless you can find an agent who’s willing to book a different way, you won’t be able to enjoy your elite benefits, and you can’t use any lower members-only rates that you may find.

Also, if you book a refundable or postpaid rate, the credit won’t be applied to your account until after the travel dates. So while this one isn’t quite as good as cash, I’d count on it as a guaranteed annual fee reduction if you intend to use it for travel.

Bank of Montreal

Likewise, BMO has annual credits on their BMO eclipse Visa Infinite and BMO eclipse Visa Infinite Privilege products. Instead of a travel credit, they’re calling these a “lifestyle credit”. By all accounts, it’s easy to cash out against just about any purchase.

• With a $50 lifestyle credit, the BMO eclipse Visa Infinite annual fee comes down from $120 to $70
• With a $200 lifestyle credit, the BMO eclipse Visa Infinite Privilege annual fee comes down from $499 to $299

Despite these savings, you have to consider whether you even want to keep these cards long-term.

CIBC Aventura can be useful for oddball bookings when redeeming points for high-value travel experiences isn’t an option. In these cases, the points are useful for offsetting the cost of an independent hotel or cruise, but they don’t otherwise have much utility as, say, Aeroplan or Amex Membership Rewards.

The same is true for BMO Rewards, which can be applied against any travel purchase as a statement credit.

If you don’t decide to keep the CIBC or BMO cards for the long-term, note that both of their credits are based on the calendar year rather than the membership year, allowing you to double-dip the credits during your first year if you so choose.

TD

The TD First Class Travel® Visa Infinite* Card had a makeover in the fall of 2022, with changes to its earning structure, design, and annual fee, as well as the introduction of a travel credit of sorts.

Unlike other travel credits, which can be applied to any travel purchase, the $100 annual TD Travel Credit is tied to accommodation bookings through Expedia for TD. After spending at least $500 on eligible lodging expenses, you’ll receive a $100 statement credit.

While it’s nice to see TD dabbling in the travel credits game, the fact that it’s not a one-to-one credit makes it much less versatile than with other cards. Luckily, the TD Travel Credit applies per calendar year, leaving the door open for a double-dip before you’re subjected to the $139 annual fee in the second year.

RBC & Scotiabank

RBC and Scotiabank are laggards amongst Canada’s Big 5 banks, in that they don’t offer annual credits on any credit cards. But between my rewards goals and personal history with those banks, I value their cards more highly as keepers.

If I’m going to use a card on a regular basis, I’d like it to be one that earns rewards that I actually want, at rates I like. Once you get rolling, you can create a positive feedback loop: I pay annual fees and spend on cards with good rewards, and in doing so I strengthen my relationship with banks that offer good rewards, making it easier to apply for more cards that earn good rewards in the future.

For me, it’s an easy choice to stick to my plans, and not chase a partial rebate for products that aren’t giving me incremental value every year over my other credit cards.

HSBC & National Bank: Travel Enhancement Credits

If the Big 5 are the vanilla nuclear family, and Amex is the cool cousin, HSBC and National Bank are the wacky aunt and uncle. They’ve got some gravitas, but it’s a bit of a puzzle to make sense of them.

Fortunately, they don’t skimp on gifts for their nieces and nephews. They do spoil us with annual credits, once we’ve figured out how to unwrap the excessive packaging.

Rather than a blanket travel credit that can be used for any booking, these two banks offer travel “enhancement” credits. They can’t be used for flights and hotels in the traditional sense – instead, they’re intended to be used to upgrade your travel experience.

Unfortunately, many of these upgrades are already covered by flying business class or having elite status, so let’s see if we can get value for them anyway.

HSBC

The HSBC World Elite Mastercard, which is unfortunately not open to new applications anymore and will likely soon disappear once RBC’s acquisition of HSBC Canada is finalized, offers a $100 annual travel enhancement credit for seat upgrades, baggage fees, and airport lounge passes.

You can apply this credit yourself on the HSBC Rewards website – all you need to do is select an eligible expense made within the last 60 days.

HSBC seems to take a liberal interpretation of which travel expenses qualify for the credit. While they might not allow you to use it for a booking made directly with the hotel, you might have better luck with an online travel agency.

If the merchant sells regular bookings and eligible upgrades alike, the transaction on your statement won’t show a difference. 😉

In addition, HSBC World Elite cardholders have also been able to redeem their travel enhancement credit for award taxes and fees on Aeroplan and British Airways Avios redemptions.

I think this credit is versatile enough to classify as a cash rebate. It brings the credit card’s annual fee down from $149 to $49, or free if paired with a Premier banking rebate.

$49 per year is a fantastic price for a card with no foreign transaction fees, worldwide Mastercard acceptance, and emergency medical insurance on trips up to 31 days, not to mention earn rates and transfer partners that make it a daily driver candidate. As HSBC is known for strictly following the timelines on its repeat bonus clause, I’d say the HSBC World Elite Mastercard is very worthy of keeper consideration, as there’s more value in keeping it than in cancelling and reapplying.

In February 2023, HSBC unveiled its new premium card, the HSBC Metal World Elite Mastercard, which appears to only be available for Private banking clients.

The card, which commands a $499 annual fee, comes with a suite of features to match its increased cost, including an unlimited DragonPass membership for the cardholder and a guest and a $200 annual travel enhancement credit. The credit is essentially the same as the one on the HSBC World Elite Mastercard, just with twice the value.

Given the card’s exclusivity, it won’t be available to most travellers, and with the sale of HSBC Canada to RBC nearing completion, its long-term value remains uncertain.

If you happen to have a credit available on your card, be sure to use it up before it vanishes into thin air forever.

National Bank

As for the National Bank World Elite Mastercard, you’d get a travel enhancement credit worth up to $150 per year. It’s restricted to very specific types of expenses:

• Airport parking fees
• Baggage fees
• Seat selection fees
• Airport lounge access fees
• Ticket upgrade fees

Against an annual fee of $150, if you’re able to use all of the credits, you can essentially keep the card year-over-year without an annual fee. For a card that’s already worth keeping for award ticket insurance and emergency medical assistance on trips up to 60 days, eliminating the annual fee makes it a no-brainer.

However, National’s redemption process is quite byzantine. You need to submit an itemized invoice to the rewards department, showing a travel upgrade that was used (not purchased) on a past date.

At a certain point, you have to draw the line for how much effort you’re willing to put in. If it’s too much hassle to redeem the travel credit, or if it can only be used for expenses that don’t really add value for you, is it really worth it?

If you’re in the market for a keeper Mastercard for medical coverage, I think there’s a strong case to be made for paying $49 to HSBC instead of struggling to get your annual fees offset with National Bank.

US Credit Cards

This is where it gets fun. Annual credits are much, much more abundant on US cards than they are in Canada, with many cards providing more credits to cardholders than the cost of the annual fees.

Here’s a small sample of cards whose annual net costs are lower than they appear (all numbers in US dollars, with some credits distributed in chunks throughout the year):

• American Express US Marriott Bonvoy Brilliant Card: $650 annual fee, offset by 12 × $25 monthly dining credits + anniversary Free Night Award worth 85,000 Bonvoy points (worth $595 as per our Points Valuations) 
• American Express US Business Platinum Card: $695 annual fee, offset by a $200 annual airline credit + up to $400 in annual Dell credits + 12 × $10 wireless telephone service credits
• American Express US Hilton Honors Aspire Card: $550 annual fee, offset by 2 × $200 semi-annual Hilton resort credits + $200 flight credit + $100 on-property credit at Waldorf Astoria or Conrad
• American Express US Hilton Honors Surpass Card: $150 annual fee, offset by 4 × $50 quarterly Hilton property credits
• American Express US Platinum Card: $695 fee, offset by $200 airline fee credit + 2 × $50 semi-annual Saks Fifth Avenue credits + $200 hotel credit + 12 × $20 monthly digital entertainment credits + $200 Uber credit
• American Express US Gold Card: $250 fee, offset by 12 × $10 monthly Uber credits + 12 × $10 monthly dining credit at participating restaurants
• Capital One Venture X Rewards: $395, offset by up to $300 in in statement credits for flights, hotels, or rental cars booked through the Capital One Travel portal
• Citi Premier Card: $95 annual fee, offset by a $100 credit on a single hotel stay of $500 or more booked through thankyou.com 
• Chase Sapphire Reserve: $550 fee, offset by $300 travel credit

Of course, many of these rebates are only valuable if they suit your lifestyle. There’s no point having the Hilton Aspire card if you don’t have cash expenses at their resorts and with eligible US airlines. But for those who’d benefit, it’s wild to see cards at the most premium tier practically paying you to be a cardholder.

Also, aside from hotels, many of the credits are difficult to use outside of the US. While the Amex US Gold Card offers an excellent 4x earning rate on restaurants around the world, you’d likely have to live in or frequently travel to the US to properly offset the annual fee with cash credits.

Additionally, the airline credits are only for incidental fees, not unlike HSBC and National Bank’s enhancement credits. There are a few ways to cash them out for other travel purchases, but Amex US is very good at closing those loopholes.

Keeper cards are a much bigger part of the Miles & Points strategy for Americans. In the US, repeat welcome bonuses are harder to come by, and it’s more important to maintain good relationships with credit card issuers by putting regular spend on your cards.

I think it’s worthwhile for Canadians to take note, as keeper cards and relationship-building are taking on a higher importance here as well. Hopefully we’ll see our banks follow suit and offer more credits as they try not only to gain our business, but also to retain it in a competitive marketplace.

American Express Offers

Throughout the year, Amex Offers are released to cardholders, allowing you to earn extra rewards points or cash rebates. They’re more prevalent south of the border, but our offers in Canada are nothing to scoff at either.

I try not to count my chickens before they hatch, but some offers are predictable. For example, I’d say that Shop Small is good for a reliable $50 rebate per credit card, at least once each year when the promotion comes around.

Other offers are less predictable, and usually more valuable. It’s not uncommon to see Amex Offers with savings upwards of $200, which becomes particularly fruitful if you have them available on multiple cards.

More and more, we’re seeing that some banks are less likely to give repeat welcome bonuses, and that they’re more likely to approve you for new cards if you don’t cancel your old ones too soon.

If you can anticipate enough useful offers to offset your annual fee, it might be worth hanging onto a premium card beyond the first year to create a win-win situation for you and the issuer.

Conclusion

The more credit cards I have, the more I see the appeal of keeping cards long-term. When the time comes to renew my cards and pay the next year’s fee, I always ask myself if I’m getting enough value to justify keeping it.

In many cases, earn rates and perks alone are enough to justify the costs, but it’s not always easy to measure their value against other cards. With annual credits, you’ll get peace of mind and cost certainty.

There are countless other ways to offset costs, like hotel vouchers, companion fares, referral bonuses, bank account rebates, or even simply by asking. All of these are effective (and not mutually exclusive), but they can be highly variable, and along with signup bonuses they aren’t necessarily sustainable.

Therefore, I try to maximize my use of annual credits because they’re simple, and I know I can count on their value year after year.