When is my credit card annual fee charged?

Learn what an annual fee is and when it's charged.

Updated

Your credit card annual fee is usually charged when you first activate the account, and then around the same time every 12 months after that. If you have a card that offers an introductory $0 annual fee in the first year, the standard annual fee will be charged for the first time around 12 months from when you activated the card.

Use this guide to learn more about credit card annual fees, including ways to avoid and reduce the costs.

Compare credit cards with no annual fee

Name Product Purchase Interest Rate Cash Advance Rate Annual Fee Minimum Income Benefits with this card Description
Scotiabank SCENE Visa Card
19.99%
22.99%
$0
$12,000
Earn 5 SCENE points per $1 spent at participating Cineplex theatres or cineplex.com, and earn 1 SCENE point per $1 spent on eligible purchases elsewhere.
Earn 2,500 bonus SCENE points when you spend a minimum of $500 on eligible purchases in the first three months. Apply by July 1, 2020.
Scotia Momentum No-Fee Visa Card
7.99% intro APR for the first 6 months, 19.99% thereafter
22.99%
$0
$12,000
Get 1% cash back on all eligible gas station, grocery store and drug store purchases and recurring bill payments, and get 0.5% cash back on all other eligible purchases.
Get a 7.99% introductory interest rate on all eligible purchases for the first 6 months. Apply by July 1, 2020.
BMO AIR MILES Mastercard
19.99%
22.99%
$0
$15,000
Get 2 AIR MILES for every $20 spent at eligible AIR MILES partners, and get 1 AIR MILE for every $20 spent elsewhere.
Earn 800 AIR MILES Bonus Miles. Plus, get a rate of 1.99% on balance transfers for 9 months. A 1% fee applies to transferred balances.
BMO Rewards Mastercard
19.99%
22.99%
$0
$15,000
Get 1 BMO Reward point for every $1 spent on eligible purchases, and get 2 BMO Rewards points for every $1 spent at participating National Car Rental and Alamo Rent A Car locations.
Earn a bonus of up to 20,000 BMO Rewards points. Plus, get a rate of 1.99% on balance transfers for 9 months. A 1% fee applies to transferred balances.
Tangerine Money-Back Credit Card
19.95%
19.95%
$0
$12,000
Earn 2% cash back in two categories of your choice (or three categories if you open a Tangerine Savings Account and directly deposit your cash back into the account), and 0.5% cash back on everything else.
Get a 1.95% interest rate on balance transfers for the first six months (valid within the first 30 days of account opening).
BMO IGA AIR MILES Mastercard
19.99%
22.99%
$0
$15,000
Get 2 AIR MILES for every $20 spent on eligible purchases at IGA stores and at participating AIR MILES partners, and get 1 AIR MILE for every $20 spent elsewhere.
Get 800 AIR MILES Bonus Miles.
Tangerine World Mastercard
19.95%
19.95%
$0
$60,000
Earn 2% cash back in two categories of your choice (or three categories if you open a Tangerine Savings Account and directly deposit your cash back into the account), and 0.5% cash back on everything else.
Get a 1.95% interest rate on balance transfers for the first six months (valid within the first 30 days of account opening).
Scotiabank GM Visa Card
19.99%
22.99%
$0
$12,000
Earn 5% in GM Earnings on all eligible purchases on the first $5,000 annual spend, and 2% in GM Earnings on all eligible purchases thereafter.
Earn 5% in GM Earnings on all eligible purchases on the first $5,000 annual spend, and 2% in GM Earnings on all eligible purchases thereafter. For every $1 in GM Earnings, you’ll get $1 off the purchase price or lease of a new GM, Chevrolet, Buick, GMC or Cadillac.
Scotia Momentum  Mastercard Credit Card
7.99% intro APR for the first 6 months, 19.99% thereafter
22.99%
$0
$12,000
Get 1% cash back on all eligible gas station, grocery store and drug store purchases and recurring bill payments, and get 0.5% cash back on all other eligible purchases.
Get a 7.99% introductory interest rate on all eligible purchases for the first 6 months. Apply by July 1, 2020.
BMO CashBack Mastercard
19.99%
22.99%
$0
$15,000
Earn 3% cash back on groceries, 1% on recurring bill payments and 0.5% on all other eligible purchases.
Get up to 5% cash back on all eligible purchases in the first three months of card membership (up to a maximum spend of $2,000, and earn 3% cash back on groceries, 1% on recurring bill payments and 0.5% on all other eligible purchases thereafter). Plus, get a rate of 1.99% on balance transfers with a 1% balance transfer fee for nine months.
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How can I avoid paying a credit card’s annual fee?

In most cases, you can’t avoid paying an annual fee unless you cancel the card before the annual fee is due. If you want to do this, make sure you note the day you got the card, and pay off your balance in full before a year has passed. Contact the provider to close the account, leaving enough time for your request to be processed before the anniversary of your account opening rolls around and the fee is charged.

If you prefer not to do this, you can:

  • Get a credit card with no annual fee for life. A selection of credit cards offer no annual fee for life, giving you a way to avoid this cost on an ongoing basis.
  • Get a credit card with an annual fee waiver. Some credit cards come with an annual fee waiver for the first year. But starting from the second year, you’ll have to pay the annual fee.

Tips to save money on your credit card’s annual fee

If you have a credit card that charges an annual fee, here are some ways to keep the cost as low as possible:

  • Pay the annual fee as soon as it’s charged. Once the annual fee is added to your balance, pay it off to avoid incurring interest.
  • Check if you’re eligible for a fee waiver. Call your credit card provider and ask if there are any options for fee waivers on your card. You may be rewarded for having more than one product with the same company, such as a Tax-Free Savings Account (TFSA) or a Registered Retirement Savings Plan (RRSP) along with your credit card account.
  • Take advantage of complimentary extras. If your card comes with benefits such as rewards or complimentary insurance, this value could offset the cost of the card’s annual fee. However, you should determine whether this is true beforehand to make sure if getting a particular card is actually worth it.

Example: Do the complimentary extras that come with a card balance out its annual fee?

Say you have an airline credit card with a $95 annual fee and one free checked bag. If you travel often, you could save $30 on your first checked bag per flight. After 2 flights, you could offset the annual fee. But if you rarely fly, a card with no annual fee could be a better choice.

Bottom line

While many credit cards come with annual fees, there are a wide range of no annual fee cards on the market or cards that simply waive the annual fee in the first year. However, other features such as interest rates, complimentary extras and rewards can also affect a card’s overall value.

Check out our guide on how to avoid credit card fees to find out about more great ways to save.

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