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Credit Card Fees – Are They Worth It

I have had a few people write me concerning my articles on Aeroplan and Airmiles, asking how I created my formulas for figuring out how much money you would need to put through your credit card to get back the annual fee for the credit card. This only works for cards that have a reward feature like airmiles, aeroplan points, or some other reward points.

I will try and get a baseline value for each type of reward point on each card and keep it in a table on this page (see below). If you want me to look at a card, let me know the name of it and I will look up the details.

This page will have 3 sections.

  1. Show how I create my formula for how much money you need to spend on a credit card to pay for the fees.
  2. List the formula for major cards.
  3. Use one of the reward items available for each card to figure out an exact value for how much money needs to go through the card to pay for itself for that reward item. I’ll try to stick to gift cards since the value is fixed (i.e. $20 gift card) and is subject to change like airfare is.

The reason I give you the formula and my estimation is that every reward is different and can give you a different value to your points. Depending on what you use your card for, it can really change how much you are getting out of each point. Movie tickets give you more than a gift card for example. But who is going to want to use all their points on movie tickets.

Creating A Credit Card Formula

There are two pieces of information you need to know when figuring this out.

  • The annual fee for the credit card (i.e. $29/year).
  • The rate at which reward points are accumulated (i.e. 1 Aeroplan point per every $2 spent).

I will show formulas with the following variables:

  • PointsEarned: The number of reward points we can get from spending money.
  • MoneySpent: How much money we put through the credit card.
  • EarningRate: How quickly we can earn reward points. This should be expressed as points per dollar. If you earn 1 point for every $2 spent, then it is written as 1/2. You could also say 1 divided by 2.
  • PerPointValue: How much each point is worth if we used it to buy something. This is a dollar value. If a 2 for 1 movie pass is 25 points and it saves as $10 because that is the cost of a movie ticket, then each point is worth 40 cents. 25 points x 40 cents/cent = $10. So $0.40 would be our PerPointValue.
  • CardFee: The annual fee to own the card (i.e. $29/year).

How Many Points Do You Earn Formula

The first concept we need to know is that if we spend a certain amount of money, we receive a certain number of reward points.

PointsEarned = MoneySpent x EarningRate

How Much Do You Need To Spend To Recover the Fee Formula

The second concept is that we want to spend enough money on the card to at least cover the fee we paid to have the card. So we put the CardFee on one side of the formula and the other side of the formula is our calculation for dollar value of our accumulated points.

CardFee = PointsEarned x PerPointValue

Combining Formulas

The next step is to substitute our PointsEarned value in our second formula with the formula for PointsEarned we created in our first formula. Our equation now looks like this:

CardFee = MoneySpent X EarningRate X PerPointValue

What I am interested in is the MoneySpent value so if we divide both sides by EarningRate and PerPointValue, we end up with:

CardFee / (EarningRate X PerPointValue) = MoneySpent

Re-arranged again.

MoneySpent = CardFee / (EarningRate X PerPointValue)

In words: The money you would need to spend is the card’s annual fee divided by the point earning rate and then divide that whole number by the value per point.


I have a BMO Gold Mosaik Mastercard. The annual fee is $90 and I will receive 1 Air Mile for every $15 I put on the card. I can get a $20 gift certificate for Shell gas stations for 175 Air Miles. That means each Air Mile is worth 11.4 cents. So my variables are:

CardFee = $90
EarningRate = 1/15 or 0.06666666
PerPointValue = $20/175 or $0.114

The formula is:

MoneySpent = $90 / (0.066666666 x $0.114) = $11,842

Wow, I would have to spend $11,842 on my mastercard just to get back the fee I paid for it if I was going to use the miles for the gift card at Shell.

Keep in mind that this is for the Shell gift card reward. Other rewards give you move value for your points (movies, airfare, theatre tickets, etc).

Since the value of your point can change based on your use, I usually leave this part of the formula as a variable so you can plug in whatever you want:

MoneySpent = CardFee / (EarningRate X PerPointValue) = ($90 / 0.0666666666) / PerPointValue

MoneySpent = $1350 / PerPointValue

Just plug whatever you think it is worth in there and then you can get how much you need to spend to recover your annual fee value in points.

Formulas for Various Credit Cards

Using the same method I did in my above example, I have made formulas for the various cards. Just plug in how much you think a reward point for your card is worth and it should give you a number. As a hint…Airmiles PerPointValues I use are between 13 cents and 45 cents. Aeroplan PerPointValues can be between 1 cent and 3.5 cents. I know the range is big, but it really depends on what you use your points for.

I am also including cards that do cash back or have no fees just to keep the information filled out.

Note: If you want me to add a card, just post a comment and I will add it (and email you if you leave your address).

Credit Card Annual Fee Earning Point Rate Formula
American Express AeroplanPlus Card $60 1 per $1 60/PerPointValue
American Express AeroplanPlus Gold Card $120 1 per $1 up to $10,000 and then 1.25 per $1 after that (150/PerPointValue) – 2500
American Express AeroplanPlus Platinum Card $499 1.25 per $1 up to $10,000 and then 1.5 per $1 after that (748.5/PerPointValue) – 2000
American Express Air Miles $0 1 per $20 N/A
BMO Gold Mosaik Mastercard $90 1 per $15 $1,350/PerPointValue
BMO Silver Mosaik Mastercard $35 1 per $20 $700/PerPointValue
BMO Mosaik Mastercard $0 1 per $40 N/A
CIBC AeroClassic Visa $29 1 per $2 $58/PerPointValue
CIBC AeroGold Visa $120 1.5 per $1 $80/PerPointValue
ScotiaBank No-Fee Money Back VISA Card $0 1% back N/A
TD Classic Visa $19 2 per $1 $1,600
TD Platinum Visa $99 3 per $1 $16,000
TD Gold Elite Vias $120 3 per $1 $20,200

Is The Credit Card Fee Worth It?

Listed below are some major credits cards and how much money you would need to put through the card if you were going to at least get back the value of the fee you paid for the given reward.

Credit Card Annual Fee Example Reward Points For Reward Value Per Point Money To Recover Fee
American Express AeroplanPlus Card $60 $50 Gap Gift Card 6,000 $0.0083 $7,200
American Express AeroplanPlus Gold Card $120 $50 Gap Gift Card 6,000 $0.0083 $15,500
American Express AeroplanPlus Platinum Card $499 $50 Gap Gift Card 6,000 $0.0083 $87,820
American Express Air Miles $0 $20 Shell Gift Card 175 $0.114 $0
BMO Gold Mosaik Mastercard $90 $20 Shell Gift Card 175 $0.114 $11,842
BMO Silver Mosaik Mastercard $35 $20 Shell Gift Card 175 $0.114 $6,140
BMO Mosaik Mastercard $0 $20 Shell Gift Card 175 $0.114 $0
CIBC AeroClassic Visa $29 $50 Gap Gift Card 6,000 $0.0083 $6,960
CIBC AeroGold Visa $120 $50 Gap Gift Card 6,000 $0.0083 $9,600
ScotiaBank No-Fee Money Back VISA Card $0 N/A N/A N/A $0
TD Classic Visa $19 N/A N/A N/A $1,600
TD Platinum Visa $99 N/A N/A N/A $16,000
TD Elite Gold Visa $120 N/A N/A N/A $20,200

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