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Can you earn points on your credit card annual fee?


Or do you have to look at other ways to justify this yearly cost?

Signing up for a frequent flyer credit card can earn you thousands of bonus points, but can you also earn points on the annual fee for that card?

This is a question that often comes up when someone is interested in getting their first point-earning credit card – or when you're looking for hacks to earn more points.

Unfortunately, there are no cards that allow you to earn points for paying the annual fee, or for paying any other account fees. These fees help credit card companies offset the cost of providing a rewards program or frequent flyer partnership, so offering points would be counterproductive.

If your goal is to justify the cost of a credit card's annual fee, you can weigh it against the value of the rewards you earn over the course of a year.

For instance, say you got a Qantas Frequent Flyer credit card with an annual fee of $200 and earned 16,000 points over 12 months.

If you redeemed those points for a return economy flight from Sydney to Melbourne, the value of the reward would more than balance out the card's yearly cost. (We're assuming an average price of $398 if you paid for the flight, and factoring in $80 for the cost of taxes, fees and carrier charges applied to a return Classic Flight Reward booking on this route).

Qantas aircraft

Booking a Qantas reward flight can more than offset your card annual fee. Image: Angus Kidman/Finder

Another option is to look at frequent flyer and rewards credit cards that offer a $0 annual fee in the first year. This gives you 12 months to rack up points with the card before the account fee is charged.

If you don't feel like you have earned enough points to justify the cost of the card during that time, you could cancel it. Some people intentionally do this with credit cards so that they can take advantage of bonus point offers and avoid high annual fee costs.

This strategy is known as credit card churning and can lead to more declined applications, as well as a lower credit score. So, approach this strategy with caution.

Some credit card offers have also adapted to churning by requiring you to pay the second-year annual fee before you can collect all the bonus points available. Once again, this type of offer is a good reminder to look at the value of the card based on the standard earn rate and ongoing perks (such as lounge access), as well as any short-term boosts you'll get from bonus points.

Are there any other ways to earn points for paying an annual fee?

To make sure no stone was left unturned, I also looked at the following options that sometimes offer loopholes for earning points on bills:

  • B2BPay: While this service gives you a way to earn points when you use a credit card for BPAY payments, it explicitly states that you won't earn points for BPAY payments made from one credit card to another card account, ruling out using it to earn points on your annual fee.
  • Bankwest Qantas Transaction Account: The list of transactions that don't earn points include bank fees and charges, interest charges and BPAY payments, so you won't be able to earn points if you pay your credit card's annual fee through this account.
  • Qantas Travel Money Card: Transactions that don't earn points on this prepaid card include BPAY payments and bank fees and charges.

While these options can sometimes give you a workaround for earning points on bills or other transactions not eligible for points, none of them let you earn points when you're paying a credit card annual fee.

This once again shows why it's so important to make sure the value you get from the rewards and other perks outweigh the account's yearly cost.

If it doesn't, you can compare credit cards to find one that has a fee you can justify based on your budget and goals.

Note: We updated this guide on 17 August 2022 to include current ticket costs and remove products that were no longer available.

Want to keep your frequent flyer points balance growing? Check out the latest credit card sign-up deals.

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