Credit Card Annual Fee And How Do I Avoid it? Have you ever wonder what an annual fee on a credit card is all about? Or have you ever applied a for a credit card, but have a change of mind due to its yearly fee charges? Especially rewards credit card charges annual fee and most people don’t mind paying a fee yearly. Despite the fee charges they feel they are having more value in return.
Cards with Annual fee
An annual fee on a credit card is a fee charged on a credit card automatically once every year. To a credit card account for the benefit that comes with the card. Credit card such as rewards cards, premium cards and secured cards cones with Annual fee attached. In general, rewards cards with the biggest perks and sign up bonuses are the credit card with Annual fee charges.
However, the yearly fee increases the cost of having a credit card. If you pay a yearly fee, ensure that the value you are benefitting exceeds the cost. For example, if your reward credit card comes with a yearly fee, the rewards you earned should exceed the yearly fee. Hence having such a credit card is not profiting.
What is the Annual fee?
However, an annual fee is a charge on your credit card account on a specific month of the year. Usually around your card anniversary or at the beginning of the calendar year. Or the yearly fee may be divided up and you pay it up bit by bit. It’s more common for cards to charged the yearly fee once a year.
How Do I Avoid paying it
Also, most credit cards company charges a yearly fee waived in the first year. After the first year, the fee is charged to your account directly. If after the first year, you decide that you don’t like the yearly fee charges, you may decide to close the account. However, before such a decision is to reach, you must also evaluate the effect of such a decision on your credit score and redeem any rewards you have accumulated.
Also, you can switch to another credit card with the same credit card issuer. But you go for a credit card without any fee. Note that, by changing your account, you may lose some benefits. Although you have successfully avoided the annual fee, in the long run, to save you cost in the future. Also, ensure that you redeem your rewards before making any changes to your credit card account to avoid losing them.
In Conclusion, Some credit cars may allow you to avoid the yearly fee. You will pay a certain amount on your credit card each year.
Additionally, if your credit card issuers decide to impose a new yearly fee or raise the current one. You should be notified within 45 days before the new annual fee becomes active according to the federal law. You have options to reject the new fee. However, you’ll have to close your account if you decide to opt out.