I have been a strong supporter of finding people the right credit card for them. I get asked frequently by friends, family, and sometimes even coworkers who learn about this terrible secret, “which credit card is best for me”. It’s quite a subjective question, but pretty easy to answer, and I’m always happy to help. However, sometimes I walk into this conversation: “I got this premium credit card because it offers $84 Dunkin’ credit every year!”.

Most credit cards in the United States grab your attention in one of two ways: Great Rewards or Luxury Status. Simple enough model, right? I know many free credit cards that offer really powerful cash back and miles options, getting up to 5% in some cases. (Sometimes even higher, but usually for an intro period). These are typically your best bet if you don’t want to apply much thought or play the credit card game. Even better if you land on a flat cash back card with greater than 1% cash back on everything. Cards with great rewards and no annual fees provide the simplest way to understand the gain you could get by using credit cards. Then there are luxury credit cards with annual fees.

Luxury credit cards are the cash crop of credit card companies. They are designed to appear as something that yacht owners and first class flyers use, which they might, but the attraction is I can be like them. They use this positioning to make you spend more on luxury experiences, things you wouldn’t ever think about spending money on in the first place. It can even be hard for experienced credit card experts to see through this disguise sometimes, especially when the credit card mathematically details how they’re losing money on you. Trust me, they’re not.¹ Now some people can actually benefit from owning a luxury credit card, but for the common person, probably not. The one observable separation that luxury credit cards use to gatekeep regular people is their high annual fees.

When a company offers multiple credit card products; their basic, their upgrade, and their self proclaimed luxury option for example, they use a collection of your internal biases to make you think it’s worth spending on: Anchoring and Mental Accounting. They trick you into throwing money down where you shouldn’t. They know that some teenager applying for their first credit card won’t shell out $325. They know that some adult won’t shell $895 (Can you believe annual fees can get this high?). And it’s easier to see $895 and justify spending $325 instead: I saved $570! Which is simply the anchoring effect at work. But there’s still a barrier that the card companies have to remove from you, as no rational person would pay that much for a small rectangular piece of metal. No, it’s not the cash back rates.

If they can’t get you in the door with their cash back rates or a pretty piece of metal or plastic to shove in your wallet, what can they do? They start offering “benefits”: credits, allowances, discounts, and accesses. They start throwing out numbers to you. Take a look at American Express Gold Card (referenced 19. July 2026), which has an annual fee of $325. The Gold Card offers $84 Dunkin’ credit, $100 on something called “Resy”, $120 Uber credit, and $120 on Dining Credit including a delivery service, “Grubhub”. They may also throw in there $100 of hotel credit. Without pulling out the calculator, you can estimate that the sum of these values are much greater than the annual fee. If you tell yourself this, they win. Reminder, these are all credit per a period, so you actually get $7 on Dunkin’ and $10 on Uber a month, for example, and it doesn’t roll over.

The coupon book model is exactly that. The credit card issuers reel you in with these attractive offers, much like a coupon book claims “over $10,000 in savings!” Here’s the breakdown of why this works:

Put yourself in the shoes of Mike, a late 20’s New York City resident working at some financial firm making good money. The city is huge and Ubers are expensive, but Mike really doesn’t go that far away from his apartment to hit the bars, so he chooses to ride the subway. While he enjoys the Dunkin’ signature blend in the morning, he has a coffee machine at his apartment and his office, not to mention there’s a fancy coffee shop on his commute to the office that he loves. His vacation PTO is limited as well, so he doesn’t go on big vacations every year. But he does love using Grubhub and orders a few times a week from them.

One day, an advertisement for a credit card arrives in his mailbox, and it shares the name of a precious metal. He skims the program terms and conditions, and focuses on the large print numbers. “$120 savings on Grubhub? That’s an obvious choice. Plus Uber, Dunkin’, and some other free credits? On top of this, cash back rewards? ”. He may have a valid case with ALREADY ordering from Grubhub. However, $325 - $120 = $205 means he is still not saving at a $205 loss. Where people crucially misunderstand is justifying the remaining credits as savings, if they weren’t ALREADY using those services. Sure, Mike could start going to Dunkin’ more often now, because in his head it’s “free”, but he is in fact paying for it. $325 in fact. By separating the annual fee and the credits, Mike’s thinking shows the Mental Accounting bias: treating separating “buckets” of money as different accounts.

The point highlighted by Mike’s scenario is that if the credits offered by the credit card don’t offset your current lifestyle choices, you can’t discount them against the annual fee. Some people earn a lot and have a maintainable amount of expenses in their lives that may include things in these coupon books. If you don’t, you’re paying the annual fee for nothing more than a slightly elevated cash back rate, and you probably won’t break even unless your natural spend is high. It may just be easier to accept that the annual fee is a cost which can’t be offset. As long as you are going negative with the luxury card, a basic 1% cash back on everything card would amount to higher savings. Just remember, if a card says it has a $325 annual fee, it has a $325 annual fee.

Out there somewhere is a card that amplifies your savings, either a reward or a bonus. You may believe that some card with some wild bonuses, credits, accesses, or discounts is going to put you on the same playing field as the yacht owners, but it won’t. Besides, they’re not applying for these cards for the bonuses, they have other reasons (high spending limits, for example). You have to really dig through the fine print and think critically about what a card is offering, and if it really saves you money, or makes you spend more. No matter what, if there’s nothing else to consider, just remember you are spending money on an annual fee, not investing. The coupon book does not save you money, as you have to buy the coupon book.