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A stack of credit cards

What is a credit card annual fee?

By:  Jennifer Laird | 19th October 2021

Perhaps you’ve heard of annual fees for credit cards, but what exactly are they? And is it possible to get a credit card without paying a yearly charge? Let’s take a look. 

What is a credit card annual fee?

An annual fee for a credit card is a charge you pay every year to use the card and access its perks. Usually, you pay the first annual fee when you open the account. Then, you’re charged around the same time each year after that. 

Not all credit cards charge annual fees. It all depends on the lender and the type of credit card you open. And, with some cards, there’s no fee until year two as part of an introductory offer.

Is the fee the same as annual interest?

No. The annual interest on a credit card is a charge you pay for borrowing money. It’s calculated based on your credit card balance.

Annual fees, on the other hand, are set. So, it doesn’t matter how much you spend on your card, you’ll still pay a set annual fee.   

Why do some credit cards have an annual fee?

Well, it’s normally because you’re getting some exclusive offers, or perks, in exchange for the yearly charge. So, you might pay an annual fee on reward cards offering things like:

Some business credit cards and travel credit cards may come with annual fees. On the other hand, a few credit cards aimed at people with low credit scores also come with annual charges. 

Where can I view the fee?

Not sure how much you’re expected to pay? The charge normally appears on your credit card statement for the month you pay the fee. So, if you normally pay your annual fee in February, it’ll show up on your February statement. You might also be able to read more about the charge through your online credit card account portal, if you have one. 

Do you have your annual statement of charges handy? You’ll see the fee on there, too. 

Finally, you can read more about the fee in your credit card agreement. This document is part of the contract you agreed to before opening your account. 

Can I get a credit card with no annual fee?

Yes, you can! In fact, there’s such a wide range of credit cards out there that there’s no need to pay an annual charge unless the card offers unique perks you’re especially interested in. Even if your credit score is on the low side, it’s still possible to find a card without annual fees attached.    


Annual fees can be worth paying if there’s a great introductory offer or perks available in exchange for the charge. Should you pay an annual fee on a credit card, though? Well, it’s an entirely personal call, but there are many cards out there with great benefits and no fees involved. 

Are you looking for a new credit card? Check your credit score first, and maybe try out our eligibility checker to see what types of cards you might consider applying for. It’s a soft search tool, so don’t worry, it won’t affect your score. 

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