Credit Card Annual Fees

Not all credit cards have annual fees. Typically, an annual fee is charged for credit cards that offer special privileges and rewards. They also usually come with the so-called "charge cards" or cards that must be paid in full each month.

Credit card companies charge an annual fee to recoup the costs of the privileges they offer through the card. In the case of charge cards, they are considered as payment for extending credit, seeing as charge cards do not have finance charges.

Annual fees vary, depending on the credit card company and type of credit card product. Annual fees can be as low as $25, but it can also go over $250. There are some really high-end credit cards that have over two thousand dollars in annual fee (e.g. the Centurion card from American Express).

Annual fees are usually waived for the first year - this is a standard promotional strategy by credit card companies. If you want to try out a card with an annual fee - see if it's worth its annual cost - then you can take up a credit card offer for a year. If you deem the annual fee worth it, then simply renew your card. If you don't want to continue, then you should be sure to call your credit card company before the year is up. Otherwise, your credit card account may be charged the annual fee before you can cancel.

Read the post about credit card fees if you want to learn more about other fees credit card companies usuall charge.