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Nothing ruins the excitement of an impending points haul quite like getting to the payment screen and seeing: “A 3% fee applies to credit card payments.”
Whether you're paying property taxes, tuition, a medical bill, utilities, or hiring a contractor, many businesses pass along the cost of accepting credit cards. It's enough to make even points enthusiasts hesitate before pulling out their favorite rewards card.
As much as I love earning points and miles, I'm not willing to pay extra just for the sake of padding my balance. But there are situations where paying that surcharge can actually come out in your favor.
Here's how to decide whether it's worth paying the fee.
Start With the Simple Math
The first question you should ask yourself is: Are the rewards you're earning worth more than the surcharge? If a business charges a 3% credit card fee and your card earns 2% cash back, you're losing money on the transaction.
For example:
- Purchase: $2,000
- Credit card fee (3%): $60
- Rewards earned (2% cash back): $40
In this case, you've paid $60 to earn $40 back — a net loss of $20.
The same logic applies to points and miles. If you're earning 1 point per dollar, those points would need to be worth more than 3 cents each just to break even on a 3% surcharge. While it's definitely possible to redeem some airline miles for more than that — and some AwardWallet users reliably do — I wouldn't count on consistently getting that kind of value.
Of course, this strategy only works if you pay your statement balance in full. Paying credit card interest will almost always cost far more than the rewards you earn.
Welcome Bonuses Can Change the Equation
Large expenses can be incredibly valuable if they help you earn a new cardmember bonus. Let's say you're working toward a welcome bonus with a minimum spend of $5,000 in three months. A large tax payment or home improvement bill could get you there quickly.
Imagine paying the following:
- A $5,000 bill
- A 3% surcharge: $150
If earning that bonus gets you 75,000 transferable points worth roughly $1,500 in travel, paying a $150 fee suddenly becomes a bargain.
- Earn 75,000 Miles once you spend $4,000 on purchases within the first 3 months of account opening
- 5X miles on hotels, vacation rentals and rental cars booked through Capital One Travel
- 2X miles on all other purchase
- Fee credit for Global Entry or TSA Pre✔® (up to $120)
- No foreign transaction fees
- $95 annual fee
- 5X miles per dollar on purchases through Capital One Entertainment
- 5X miles per dollar on hotels, vacation rentals and rental cars booked through Capital One Travel
- 2X miles per dollar on all other purchases
Spending Milestones Can Also Be Worth It
Some rewards credit cards offer valuable perks and benefits after you spend a certain amount each calendar year. If you're already close to one of those thresholds, paying a surcharge can make a lot of financial sense.
This can include things like:
- Earning a Free Night Reward on eligible Hilton cards after meeting annual spending requirements.
- Unlocking a Category 1–4 Free Night Award on the The World of Hyatt Credit Card after reaching the required spending threshold.
- Making progress toward airline or hotel elite status.
Related: Why I Spend $15,000 Each Year on My Hilton Honors American Express Surpass® Card
(Terms Apply)
- Earn 130,000 Hilton Honors Bonus Points with the Hilton Honors American Express Surpass® Card after you spend $3,000 in purchases on the Card within your first 6 months of Card Membership.
- Enjoy complimentary Hilton Honors Gold Status with benefits like an 80% Points earning Bonus on Stays, daily food & beverage credit or continental breakfast (varies by brand & region), space-available room upgrades at select properties, and more.
- Get up to $50 in statement credits each quarter for purchases made directly with a property in the Hilton portfolio on your Hilton Honors American Express Surpass® Card. That's up to $200 in statement credits annually.
- Earn a Free Night Reward from Hilton Honors after you spend $15,000 on eligible purchases on your Card in a calendar year.
- Earn 12X Hilton Honors Bonus Points for each dollar of eligible purchases charged on your Card directly with a hotel or resort within the Hilton portfolio.
- Earn 6X Hilton Honors Bonus Points for each dollar of eligible purchases on your Card at U.S. restaurants, at U.S. supermarkets, and at U.S. gas stations.
- Earn 4X Hilton Honors Bonus Points for each dollar of U.S. Online Retail purchases.
- Earn 3X Hilton Honors Bonus Points for all other eligible purchases on your Card.
- Hilton Honors American Express Surpass® Card Members can enjoy complimentary National Car Rental® Emerald Club Executive® status, including perks like Executive Area Access (for full-size reservations and above) in the USA and Canada. Card Members must enroll in the National Car Rental Emerald Club Executive status through their American Express online account using their Card. Terms apply.
- No Foreign Transaction Fees. Enjoy international travel without additional fees on purchases made abroad.
- Whenever you travel more than 100 miles from home, Global Assist® Hotline is available for 24/7 emergency assistance and coordination services, including medical and legal referrals, emergency cash wires, and missing luggage assistance. Card Members are responsible for the costs charged by third-party service providers. Other terms and conditions apply.
- $150 annual fee.
- Apply with confidence. Know if you're approved for a Card with no impact to your credit score. If you're approved and you choose to accept this Card, your credit score may be impacted.
- Terms Apply.
- 12X bonus points for each dollar of eligible purchases charged on your card directly with a hotel or resort within the Hilton portfolio
- 6X bonus points for each dollar of eligible purchases on your card at U.S. restaurants, U.S. supermarkets, and U.S. gas stations
- 4X bonus points on U.S online retail purchases
- 3X bonus points for all other eligible purchases on your card
Elite Status Can Also Help Tip the Scales
If you're chasing elite status, a surcharge can sometimes help push you over the finish line. For example, some travelers use everyday spending to earn American Airlines Loyalty Points or satisfy spending requirements tied to hotel elite status benefits.
Would I pay hundreds of dollars in fees solely for elite status? Absolutely not. But if I'm already within striking distance of a valuable tier, paying a modest surcharge on a large purchase might be enough to get me there.
Like everything else in the points world, it's all about assigning a realistic value to what you're receiving. Then you can know for certain if it's worth it to you.
Sometimes Convenience Has Value, Too
Not every decision has to come down to maximizing cents per point. There have been times when I've happily paid a small fee simply because using a credit card was easier.
Maybe it lets me spread out a large purchase until my statement closes. Maybe I prefer the fraud protections, purchase protections, or extended warranty coverages that come with paying by credit card. Or maybe I'd simply rather not mail a check (these do still exist, believe it or not) or deal with a bank transfer.
I wouldn't pay a hefty fee just for convenience, but for a small surcharge, those benefits will absolutely factor into my decision.
When To Skip the Credit Card Fee
As much as I enjoy earning rewards, paying extra just to collect more points usually doesn't work out for the best. In most of the following situations, you'll probably want to skip paying a credit card surcharge, especially if:
- You'll only earn the card's standard rewards.
- The fee costs more than the value of the points you will earn.
- You don't need the spending to earn a welcome bonus or spending milestone.
- You have another fee-free payment option, and paying using a credit card won't help you earn a welcome bonus, spending milestone, or elite status.
Bottom Line
In most cases, paying a credit card surcharge simply to earn everyday rewards isn't worth it. But there are always exceptions. If that purchase could help you earn a welcome bonus, unlock a spending milestone like a free hotel night, or reach elite status you've already been working toward, the math can shift a lot.
Before automatically accepting — or rejecting — a credit card surcharge, though, take a minute to look at the bigger picture. Sometimes that extra fee is simply an unnecessary expense. Other times, it can be the cost of earning rewards worth many times more.
For rates and fees of the cards mentioned in this post, please visit the following links: Hilton Honors American Express Surpass® Card (Rates & Fees)
