How to Decide if an Annual Fee Card Is Worth It For You

With credit cards often come annual fees. We call this an annual fee card, and if you’re like most cardholders, you get wary when these fees come into play.

Most people consider the cards without fees to be the best. So, how can you determine if paying this fee is worth it?


This guide covers the various factors to consider to help you decide if paying an annual fee is worth it for the perks of using the card.

Annual Fee Card

What Is an Annual Fee?

The annual fee is what you pay as a cardholder to continue using the card. These fees generally have no relation to the other fees you incur when you use your card. Typically, the higher the annual fee of your card, the better the benefits you’ll enjoy. In this way, you can think of it as an investment or a membership fee.


Annual fees are most commonly charged in the month when you are approved. They are usually charged on the last day of the month. Annual fees may also be charged through a plan called monthly installments.

Is It Worth It to Have a Card with Annual Fees?

In most scenarios, it is worth it to have a card with annual fees. Why?

  • Poor Credit: Most people have poor credit or at times, no credit at all. Here, you’ll have to settle for this card because it is all you have.
  • Intro Bonus: Most of these cards offer great intro bonuses, but with an annual fee card, the bonus is large.
  • Product Change: If you at some point wish to degrade your product to a lesser one, then an annual fee card should be what you consider. You can downgrade with the same history and the same line of credit, and it comes with fewer rewards.
  • The other reason to have an annual fee card is that you can transfer points.

What Types of People Benefit From Credit Cards with Annual Fees?

With that entire set of information in mind, let’s see if you’re a good fit for annual fee credit cards.

  1. How is your credit score? If you’re in the red on your credit score, then you’re a good fit for this type of card. If not for any other reason, it’s because you can’t be approved for any other card than this one.
  2. If you have a good credit score, then a credit card with annual fees is also good for you. With this type of credit card, you’ll get better benefits and rewards than with ones with no fees.


Choosing what type of credit card you should get isn’t that difficult. And, deciding on the one with annual fees will, in most cases, turn out to be worth it for you.