Are ultra premium credit cards worth their hefty annual fees?

Cards that don’t give a fee waiver option become a costly proposition the second year onwards

- Shipra Singh

Credit cards can unlock the world of luxury, be it hotels, homes and holidays, but that comes at a cost. So, how much would you be willing to pay as annual fees for a credit card? The most expensive one available in India demands ₹12.09 lakh as joining fees and ₹3.24 lakh thereafter every year on renewal. The card in question is Amex Centurion, an ultra premium credit card. But, it's one-of-a kind and no other card comes even close to its pricing. The next in line ultra premium cards carry a joining fee of ₹40,000 to ₹160,000 (besides goods and services tax, or GST, of 18%), which, in most cases, is to be paid each year along with the renewal fee.

At such high fees, what makes these cards attractive? Do the rewards exceed the fee? This story breaks down ultra premium credit cards for you to decade whether you need this plastic in your kitty.

What's on offer

Kashif Ansari, assistant professor at O.P. Jindal Global University, defines credit cards in this category as lifestyle cards. "The main benefits are not monetary and instead these offer privileges such as memberships of hotel and dining programmes and upgrades on them, besides concierge services and airport assistance," he said.

This can be seen in the relatively lower reward rates of 1.25-2.5% on some of the most rewarding super premium cards available currently-Axis Reserve, Yes Private and Amex Platinum Charge. The avenues for accelerated rewards on these cards are also limited. If one were to compare the reward rate of these ultra premium credit cards with HDFC Infinia, the highest rewarding card in a category that falls just below these cards, the shine may fade further for those who get credit cards primarily for reward rates. Infinia offers a base rate of 3.33% on hotels, flights and shopping on Tata brands and its annual fee is much lower at ₹14,750 (including GST). This fee is waived off after the cardholder spends ₹10 lakh a year.