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An annual fee is the amount you pay to use your card and its benefits for 12 consecutive months. Not all credit cards have an annual fee, but those that do usually come with better perks and features than their no-annual-fee counterparts. Before choosing such a card, however, it’s always best to weigh in the costs and benefits to make sure it’s worth it.
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.
After that, the annual fee will be added to your balance each year around the same date. Use this guide to learn more about credit card annual fees, including ways to avoid and reduce the costs.
In most cases, you can’t avoid paying an annual fee. However, depending on the credit card and its issuer you can:
If you have a credit card that charges an annual fee, here are some ways to keep the cost as low as possible:
Say you have an airline credit card with a $95 annual fee and first checked bag free perk. If you travel often, you could save $30 on your first checked bag per flight. Two round trips annually and you offset the annual fee. But if you don’t fly as much, a card with no annual fee could be a better choice.
While most credit cards come with annual fees, there is a range of options that offer $0 annual fees for the first year or for 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.
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