Global Entry perk may make big-annual-fee rewards card worthwhile
By Tony Mecia
Dear Cashing In,
My wife travels overseas a lot and says she would like to get Global Entry to get through customs and airport security lines faster. I have heard that there are some credit cards that come with Global Entry, but they have big annual fees. Does it make sense to apply for one of those, since she is already planning to sign up for Global Entry? -- Mark
Deciding what's best for your family's finances is going to be a personal decision that depends on several different factors. But let's look a little more deeply at some of these premium cards so you can make an informed decision.
In terms of annual fees, reward cards tend to fall in one of three tiers. Some have no annual fee, others are in the $50-$125 range, and then there is the $400-$500 range. Generally, the higher the annual fees, the greater the perks. You would expect a card with no annual fee to offer meager rewards compared to one that is $450 a year.
The cards that fall in the upper range tend to be targeted toward frequent travelers who have excellent credit. They often come with features such as airport lounge access. They might also come with airline miles, a statement credit upon first use or reimbursement for airline fees. Additionally, some come with a statement credit when you apply for the government's Global Entry program.
Most of us would probably not consider an expensive credit card when there are plenty of fine inexpensive choices available. However, if you start looking in detail at some of these premium cards and tallying up what they offer, you might find that the rewards outweigh the costs -- especially if you're already planning to pay for one of the features that card includes.
For instance, if you were to purchase a one-year membership to United's airport clubs, that would cost $550 per year. But the United MileagePlus Club card comes with lounge access, free checked bags on United and a $100 statement credit -- and it is only $450 a year.
The same is true with cards that offer Global Entry, the program run by U.S. Customs and Border Protection that does a thorough background screening of applicants, then allows participants to breeze through customs using automated kiosks. Global Entry participants are also eligible for TSA PreCheck, which allows expedited passage through airport security checkpoints.
The application fee is $100. Several premium credit cards give you a $100 statement credit when you apply for Global Entry. The cards I know of with this perk include the three versions of American Express Platinum cards (personal, business and Mercedes-Benz). The personal and business cards are $450 a year, and the Mercedes-Benz Platinum is $475 a year.
They also include sign-up bonuses of 40,000, 50,000 or 75,000 American Express Membership Rewards points, $200 per calendar year in airline fee credits, airport club access and other perks. Although the terms and conditions say the $200 in airline credits cannot be used for gift cards, in practice, some participants on the site Flyertalk say they have been able to buy gift cards and be reimbursed.
Citi also offers a pair of cards that reimburse you for the Global Entry fee. There's the Citi Prestige card ($450 annual fee), which also comes with 50,000 Citi ThankYou points (worth at least $500), $250 reimbursement for travel fees and access to American Airlines clubs; and the AAdvantage Executive card ($450 annual fee) that comes with 50,000 American miles, free checked bags and club access.
There is a lot of value in these cards, but a $450 outlay can be pretty steep. If you go that route, you might not want to be hit with the high annual fee every year. Global Entry membership is valid for five years, so you could just get the card for one year and then cancel it before the next annual fee comes due.
Meet CreditCards.com's reader Q&A expertsDoes a personal finance problem have you worried? Monday through Saturday, CreditCards.com's Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.
Published: December 8, 2015
- Reward possibilities soar with Starwood-Marriott merger – If you have points with either of the big chains, you have some great opportunities to take advantage of the rewards ...
- Using rewards miles to fly to Cuba – While there are still restrictions on travel to Cuba, it has cracked open as a travel destination for Americans, and you can use rewards to get there ...
- Hotel rewards: Go for free nights, not points – While thousands of points might feel like a bigger sign-on bonus than free nights for a hotel credit card, they make for more complicated trip-planning and run the risk of being diluted ...