Definition

A fee charged once a year for certain financial products, like credit cards. Check if the benefits of the product outweigh the cost.

What to consider

  • Notice if an annual fee is eating into your benefits.
  • Compare similar products to see if a no-fee option might work better.
  • Think about how the rewards stack up against the fee you pay each year.

Real world scenarios

  • Paul compares two credit cards and chooses the one with no annual fee to keep his overall costs down. He decides perks from the higher-fee card aren’t worth the expense.
  • Daphne reevaluates the annual fee on her premium travel card each year. She weighs the fee against the miles and lounge benefits to see if it’s still worthwhile.
  • Before signing up for a new membership, Marcus factors the annual fee into his budget to avoid surprises later.

Related terms

Banking & Savings