What is an annual fee?
Annual fee: An annual fee is a yearly charge some credit card issuers add to your account just for keeping the card open. Many cards have no annual fee at all.
The fee is usually billed once a year, often on your first statement and then on the anniversary of opening the account. It's added to your balance like a purchase, so it can accrue interest if you carry a balance.
Cards that charge an annual fee often pair it with rewards, travel benefits or other features. Whether a fee is worth paying depends on how you would actually use the card.
When you compare offers
Weigh the annual fee against the benefits you would realistically use, and compare it with similar cards that charge no annual fee. Check whether the fee is waived for the first year and what it becomes after that.
Related guides
- Choosing a Credit Card by Your Credit Score Range
How your credit score range can point you toward secured, rewards or balance-transfer credit cards, and which fees to check before applying.
- Personal Loan vs. Credit Card: Which Costs Less to Carry a Balance
How carrying a balance on a credit card compares with borrowing the same amount through a personal loan: interest, fees, payoff timing and what to check before you choose.
This glossary is for general educational purposes and isn't financial, legal or insurance advice. Lendara is not a lender and does not make credit decisions. Lendara is a free online marketplace that connects you with participating lenders and providers, who set their own eligibility rules, rates, fees and terms. Lendara may receive compensation from partners, which may affect which offers appear and their order.