When is my credit card annual fee charged?

If you have a $0 annual fee in the first year or want to keep track of ongoing account costs, here’s what you need to know about credit card yearly fees

Last updated:

Credit card companies usually charge the annual fee when you first activate the account, then around the same time every 12 months after. However, if you have a card that offers a $0 annual fee in the first year, they will first charge this standard yearly cost around 12 months after you activate the card.

After that, the annual fee is added to your balance each year at around the same date. Use this guide to learn more about credit card annual fees, including ways to avoid and reduce the cost.

Compare no annual fee cards in NZ

Updated March 30th, 2020
Name Product Purchase rate (p.a.) Annual fee Additional Card Holder Fee
American Express Airpoints Card
0% for 6 months (reverts to 19.95% APR)
$0 p.a.
Be rewarded with 50 bonus Airpoints Dollars. Simply apply, be approved, and spend $750 on your new Card in the first 3 months of membership. This offer is available to new Card Members only.
Kiwibank Zero Visa
13.95% APR
$0 p.a.
ASB Visa Light
0% for 6 months (reverts to 13.5% APR)
$0 p.a.
With no account fee, lowest ongoing purchase interest rate and the Smart Rate purchase feature
ANZ Low Rate Visa Credit Card
13.9% APR
$0 p.a.

Compare up to 4 providers

How can I avoid paying a credit card annual fee?

If you have a credit card that offers no annual fee in the first year, you can avoid the cost in the second year by cancelling the account within the first 12 months. To do this, you need to make a note of the date you got the card, pay off your full balance, and then contact your credit card company and ask them to close the account before the anniversary of it opening.

For example, you receive a credit card on 31 January 2019 that offers a $0 annual fee for the first year and then charges a $250 annual fee after that. If you decide this standard yearly cost isn’t worth it, you need to cancel the card before 31 January 2020 to avoid the annual fee charge.

Tip: Find out what date the annual fee is due

To make sure you leave enough time for the credit card company to process the cancellation, contact them and ask when they will charge the annual fee, which will help you sort out your account and close it before the provider adds the cost to your balance.

If you’ve had the same credit card for years and wanted to cancel it, you can also use this approach to avoid paying another annual fee before you close the account.

Other ways to avoid a credit card annual fee

  • Credit cards with no annual fee for life. Specific credit cards offer no annual fee for life, which gives you a way to avoid this cost on an ongoing basis.
  • Annual fee waivers. Some credit cards offer to waive or refund the cost of the annual fee when you meet specific conditions, such as spending a set amount each month or year.
  • Home loan packages. Some banks offer to waive a credit card’s annual fee when you request the card as part of a home package.
  • Promotional $0 annual fee for life offers. These offers are rare, but sometimes credit card company’s run promotions that give you $0 annual fee for life on a credit card that usually charges one. However, there are scant opportunities to get a $0 yearly fee in this way.

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 the provider charges it. Once the provider adds this yearly fee to your balance, it attracts interest charges at the standard rate for your card. You can avoid this added cost by paying off the annual fee as soon as the credit card company charges it.
  • Check if you’re eligible for a fee waiver. Call your credit card company and ask if there are any options for fee waivers on your card. Sometimes, you might be eligible for one without realising it.
  • Take advantage of complimentary extras. If your card comes with benefits such as rewards or complimentary insurance, the value you receive from using them may help balance out the cost of the annual fee. However, it’s a good idea to estimate the value of these perks to make sure they are worth it.

Example: Working out if complimentary extras will balance out the cost of a card’s annual fee

If you have a credit card with a $99 yearly fee and complimentary overseas travel insurance, but you travel overseas every year and usually pay more than $99 for your insurance, then this perk offsets the card’s annual fee.

However, if you rarely travel overseas or tend to find cheaper travel insurance options, you might find a card with a lower annual fee or a $0 fee more affordable.

While most credit cards come with annual fees, there is a range of options that offer $0 yearly fees for the first year or life. However, other features such as the interest rates, complimentary extras and rewards can also affect a card’s overall value.

So, if you’re looking for a new credit card, make sure you think about what features are worth the most to you and then compare a range of options to help you find one that fits your goals.

Back to top

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use, Disclaimer & Privacy Policy.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site