Credit Cards: Should You Ever Pay an Annual Fee?

Credit Cards: Should You Ever Pay an Annual Fee?

Does paying an annual fee for a credit card make any sense? Many consumers do not wish to pay the annual fee for the sake of rewards or for other benefits it simply looks like an exchange phenomenon. However, the card offers plenty of rewards to justify the annual fee. Some of the circumstances at which the expenses will worth the annual fee depending upon the type of spending habits and individuals.

What is meant by Annual fee mean on Credit Cards?

  • Paying annual fee used to be common during the previous decades offering great rewards and benefits.
  • Nowadays many credit cards come without an annual fee.
  • In present days annual fee is less common and is been applicable only on cards like the premium travel card market, as these cards offers heavy rewards and bonuses.
  • Also, subprime cards also have annual fees these cards helpful in rebuilding credits when you have bad credit.
  • Nowadays annual fee is charged as an exchange for low or bad credit in the low end of the market.

When you could decide to Pay an Annual fee

1. The Credit Card offers a Welcoming bonus or one-time bonus that justifies the annual fee

  • Many credit cards offer welcoming bonuses for the consumers, these welcoming bonuses will exceed the annual fee, also the reward points, frequent flyer miles, and other benefits will be redeemed to the account that will completely justify the annual fee.
  • Also, for the individuals who have poor credit, it is a must to use these cards, but the benefit of rebuilding the credit score is worth the annual fee.
  • Read the blueprint and understand the terms of the credit card company, check out whether the annual fee is worth the rewards and benefits you could gain then definitely get the card for yourself if not, it's better to choose the cards that come without an annual fee.

2. When you can reward that exceed the cost of the annual fee

  • Find a card that offers at least 1% or more cash back on every purchase you make. Also, there are some cards that give cash back on every month's purchase that changes from month to month.
  • In this case, depending upon your spending habits, you can cover as much as the annual fee.

3. The Card Offers Travel Benefits Worth More than the Yearly Fee

Some cards offer higher rewards and benefits on your travel. These reward points will be redeemed to your account. These reward points as an outcome will be more than the annual fee.

India’s Top Travel Credit Card, their benefits & Annual Fee:

Credit Card Benefits Annual Fee Reward Rate
Citi PremierMiles Credit Card Air Mile Earning ₹3,000/-
  • 4 Miles per ₹100
  • 10 Miles per ₹100 on airline transactions
  • 10 Miles per ₹100 on premiermiles
Air India SBI Signature Credit Card Travel Rewards and Exclusive Benefits with Air India ₹4,999/-
  • 4 Reward Points per ₹100
  • Convert points into Air India Miles in 1:1 ratio
Axis Bank Vistara Signature Credit Card Air Vistara Benefits & Lounge Access ₹3,000/-
  • 4 Club Vistara Points per ₹100
SBI Card ELITE Lounge Access, Movies and Dining ₹4,999/-
  • 2 Reward Points per ₹100
  • 10 Reward Points per ₹100 on dining, grocery & departmental store purchases
Standard Chartered Emirates World Credit Card Travel Rewards with Emirates, Lounge Access and Golf Privileges ₹3,000/-
  • 3 Skyward Miles per ₹150
  • 6 Skyward Miles per ₹150 on Emirates transactions
HDFC Regalia Credit Card International Airport Lounge Access ₹2,500/-
  • 9 Club Vistara Points per ₹100 on Vistara transactions
  • 4 Reward Points per ₹150 on all categories
YES FIRST Preferred Credit Card Extra Rewards on Travel, Lounge Access and Movie Benefits ₹2,500/-
  • 4 Reward Points per ₹100
  • 8 Reward Points per ₹100 on Travel Agencies & Tour Operators, Domestic Airlines and Dining

4.When you have poor credit these are the only cards for which you can get approved

Yes, this is a great opportunity for consumers with poor credit. Generally, consumers with poor credit do not get approval for the credit cards, in such cases, consumers can get cards by paying the annual fee. Apart from that these cards help you build your credit. Once your credit is on track or you have qualified the score then you can switch to a different credit card.