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Annual Fee

When searching for a credit card, it’s critical to pay attention to any and all fees associated with it. And that definitely includes the annual fee.

Before we go any further, keep in mind that not every credit card has an annual fee. There are hundreds of offers that don’t require you to pay a fee in order to remain in good standing.

If you’re thinking about applying for a credit card with an annual fee — or renewing one that you already have — there are several questions you should first answer. Let’s take a closer look.

1. Are you comfortable with the idea of paying this fee once per year?

This is the first question to address. If you’re uncomfortable with the idea of paying this fee once per year, you can leave these offers to someone else.

While answering this question, you must also determine “how much is too much.” You may be okay paying a $100 annual fee, but anything more than that is out of the question.

2. What do you get in exchange for paying an annual fee?

You should never pay an annual fee until you know what you’re getting in exchange.

Are you paying for access to a robust travel rewards program? How about for a cash back credit card?

Tally up the features and benefits of the credit card offer you’re considering. That allows you to determine if paying an annual fee is worth it.

3. Have you asked the issuer if they’ll waive the fee?

There’s nothing wrong with asking the credit card issuer to waive your annual fee. They are not likely to do this every year, but you can probably get them to agree at least once.

In many cases, a credit card company will waive the annual fee for new customers. This gives you the opportunity to use the card for 12 months. From there, you can decide if it makes sense to pay the annual fee in year two.

Final Thoughts

There is nothing wrong with paying a credit card annual fee, as long as you feel that you’re getting a fair amount of features and benefits in return.

Just the same, it’s okay if you’re only interested in “no annual fee credit cards.”

By answering the questions above, you’ll better understand what type of card is best for you.

Do you have a credit card with an annual fee? Do you feel that the fee is worth the money?

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