We've used our Capital One card for years, several trips to SXM and Europe, never had a merchant refuse it, never had a foreign transaction fee.

As far as the annual fee on the Citibank card, there usually isn't one for the first year. And whenever our Citibank card was about to renew, we'd call to cancel it saying we didn't want to pay an annual fee, and they always offered to waive the annual fee if we kept the card. Most years we would cancel the card anyway, just to get a new one and get lots of "new card" bonus miles. And we've flown to SXM many, many times on the miles that we got with the Citi card. Never really found it that difficult to redeem miles on AA, even used our AA miles to get free flights on US Air this past year.