Are Credit Cards With Annual Fees Worth It?
A card with an annual fee is worth it only if the value you extract from its benefits exceeds the fee. A $95 annual fee card offering $300 in travel credits, lounge access, or 5x points on travel can easily justify the cost for frequent travelers. However, if you do not use the benefits regularly, a no-fee card with solid base rewards is the smarter choice.
Can You Get an Annual Fee Waived?
In many cases, yes. Many premium card issuers waive the annual fee for the first year as an introductory offer. If you have been a long-term customer with a good payment history, you can often call and ask for a fee waiver or a retention bonus — such as bonus points — worth more than the fee. Issuers prefer to keep loyal customers and may accommodate the request.
How Do Annual Fees Affect the True Cost of a Card?
Annual fees must be factored into your overall card cost calculation. If you earn $150 in cash back per year but pay a $95 annual fee, your net benefit is only $55 — less than many no-fee cards offer. A common best practice is to compare net value after fees. For travel rewards, also account for point valuations, since a point's value varies significantly by how it is redeemed.
Frequently asked questions
When is the annual fee charged?
Most issuers charge the annual fee to your account on your card's anniversary month or at account opening. It appears as a charge on your statement. If you close the account shortly after the fee posts, some issuers will refund it prorated, though policies vary.
Do annual fees count toward spending minimums for welcome bonuses?
No. Annual fees are a bank charge, not a purchase, and do not count toward the spending requirement to earn a welcome bonus. Only purchases made at merchants count toward the minimum spend threshold.