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When do I pay my credit card annual fee?

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

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.

When do I pay my annual fee on my credit card?

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.

Tip: Contact your credit card company and ask them when the annual fee will be charged.

Compare credit cards with no annual fee

Name Product Annual fee Balance transfer APR Purchase APR Filter values
Blue Cash Everyday® Card from American Express
0% intro for the first 15 months (then 13.99% to 23.99% variable)
This everyday cashback card offers a higher than average welcome offer for no annual fee, letting you earn 20% back on purchases in the first 6 months for up to $150 back, plus $100 after you spend $2,000 in the first 6 months. Terms apply, see rates & fees
Chase Freedom Unlimited®
14.99% to 23.74% variable
0% intro for the first 15 months (then 14.99% to 23.74% variable)
This solid 1.5% cashback card gets even better with the addition of up to 5% back in categories like travel, drug stores and dining.
Citi® Diamond Preferred® Card
0% intro for the first 18 months (then 14.74% to 24.74% variable)
0% intro for the first 18 months (then 14.74% to 24.74% variable)

Best of Finder 2021

An impressive 18 months intro APR on balance transfers and purchases, as well as no annual fee make this one of the top 0% APR cards available.

Compare up to 4 providers

How can I avoid paying a credit card’s annual fee?

In most cases, you can’t avoid paying an annual fee. However, depending on the credit card and its issuer 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.
  • Use the SCRA. The Servicemembers Civil Relief Act (SCRA) can help you get your annual fee waived with some credit card providers. However, this usually applies to cards you own prior to active duty.

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.
  • Take advantage of complimentary extras. If your card comes with benefits such as rewards or complimentary insurance, the value you get from using them could 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 actually worth it.

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

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.

Bottom line

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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