Rewards credit cards allow you to get more value out of your everyday spending, and in some cases, they can also offer a suite of travel and lifestyle perks. That said, some of the best credit cards charge annual fees, some of which can climb into the hundreds of dollars.

So when is a credit card annual fee worth it? Ultimately, it depends on whether you can get enough value from the card to offset that yearly cost. But even then, it's still a good idea to research and compare multiple credit card options to ensure you're getting the best balance of cost and value.

In most cases, focus on the benefits

Even if you're generally fee-averse, a credit card annual fee can be worth your while if the card's value outweighs the cost. But as a rule, it's best to focus on the card's benefits rather than its rewards rates. There are plenty of no-annual-fee credit cards that offer excellent rewards.

The Capital One Venture X Rewards Credit Card, for instance, charges a steep $395 annual fee, but it also offers an annual $300 credit toward travel bookings through Capital One Travel, and 10,000 bonus miles each year (worth $100 in travel) starting on your first anniversary.

Even if you're a casual traveler, it’s not too difficult to offset the annual fee each year, and that's not even considering the card's other premium perks, including complimentary airport lounge access.

Hotel credit cards can also be a great choice for travelers because many offer a free night every year. With the IHG One Rewards Premier Credit Card, you'll get an annual free night worth 40,000 points. Depending on how you redeem that free night, you can get far more value than the cost of the card's $99 annual fee.

The card's other perks include a $100 statement credit and 10,000 bonus points when you spend $20,000 each calendar year, a fourth night free on award stays of four or more nights, and Platinum Elite status.

Only consider benefits you'll actually use

Credit cards offer valuable perks, but some may not align with your spending habits or lifestyle.

Take the Platinum Card? from American Express, which charges an eye-watering $695 annual fee but offers more than $1,500 in potential value each year from benefits alone.

Some of those perks are easy to maximize. For example, you can get up to $240 in statement credits each year just for using your card to pay for digital entertainment services like Peacock, Disney+ and Hulu.

Others, however, are more challenging. For example, you can get up to $200 in statement credits each year for incidental airline fees, but you can only choose one airline to earn it with, and it doesn't work for airfare.

Rather than focusing on the face value of a card's benefits, consider your lifestyle, travel habits and general preferences to determine how easy it'll be to use the card's perks. If you have to jump through hoops or spend money you wouldn't otherwise spend just to get a benefit, it may not be worth it.

Don't forget about the sign-up bonus

Credit cards that charge an annual fee don't necessarily offer better rewards rates than no-annual-fee cards, but they often offer bigger welcome bonuses.

For example, the Capital One Venture Rewards Credit Card offers a base rewards rate of 2 miles per dollar on every purchase you make and charges a $95 annual fee. Meanwhile, the Citi Double Cash? Card offers a flat 2% cash back on all purchases and doesn't charge an annual fee.

In the long run, you'll generally get the same value on your everyday spending with both cards. Enjoy $250 to use on Capital One Travel in your first cardholder year, plus earn 75,000 bonus miles when you spend $4,000 in the first three months. That's worth $1,000 in travel, enough to offset the card's annual fee for several years. In contrast, the Double Cash offers $200 when you spend $1,500 in the first three months.

Of course, these cards offer other benefits that could give one an advantage over the other based on your preferences. But if you like the idea of getting a lot of value upfront, paying an annual fee can be worth it.

Read more: See our picks for the best credit card sign-up bonuses

Avoid annual fees on credit cards for limited or poor credit

In most cases, credit cards that charge annual fees offer rewards and benefits. But there's another contingent of credit cards that charge an annual fee essentially for the privilege of building credit. In the past, the only alternative was a secured credit card, which required an upfront security deposit of $200 or more to get approved—and you couldn't get it back until you closed your account.

But in recent years, there's been an influx of unsecured starter credit cards and credit cards for bad credit that don't charge an annual fee. With the Chase Freedom Rise? Credit Card, for instance, people new to credit can improve their odds of getting approved if they have a Chase checking account with a balance of $250 or more. Petal, a fintech company, uses Cash Score — its own scoring model based on your income and expenses — along with your credit score to evaluate your eligibility. These cards create more opportunities for people with less-than-stellar credit despite managing their money responsibly.

When it makes sense to go with a no-annual-fee card

While a credit card annual fee can be worth it in the right circumstances, there are plenty of situations where it may be better to go with a no-annual-fee option. In particular, here's when it might make sense to skip an annual fee:

• You don't want to keep track of card benefits

• Your lifestyle doesn't match up with the perks that annual fee cards offer

• You don't spend enough to earn a big sign-up bonus

• You'd rather avoid the out-of-pocket expense, even if you can get that value back

• You prefer cash-back rewards over travel rewards (most cash-back cards don't charge an annual fee)

• You prefer the simplicity of a no-annual-fee card

A credit card annual fee can be worth it if you can get enough value from the card's benefits to offset the yearly cost.

Before applying for a credit card, research and compare several options, including cards with and without annual fees. As you do so, it's important to consider your spending habits, lifestyle, and general preferences to determine which card best fits you.

This article was edited by Rebecca McCracken

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