Applying for a Credit Card with an Annual Fee

Applying for a Credit Card with an Annual Fee

Many credit card agreements are now requiring an annual fee. Consumers still have the option to choose a no-fee card, but if you're hoping to take advantage of a reward program, an annual fee is almost always included. You may be hoping to earn travel perks or cash rebates, but before you agree to a new card with an annual fee, be sure you understand whether the benefits are worth the costs. Here are four things to consider:

Calculate All Fees

The annual fee is just one of the charges that need to be considered. If the APR is high and you carry a balance on occasion, the card will cost more than any rewards that you could earned. A card with a lower APR, no rewards and no annual fee would probably be more beneficial. Now, if the card offers high end rewards at a lower APR, paying an annual fee might be worth it. Read the fine print and do the math.

Desirable Perks and Advantages

Many cards offer services and rewards at no extra charge that may include extended warranties, flexible payment options, buyer protections and travel insurance. An annual fee in comparison to the value of these protections may make the card a good choice, but be sure you will actually use the services. An annual fee may be returned many times over to you, if you take advantage of these services and warranties.

Ease of Claiming Rewards

Reward programs should be easy to understand. The number of points required to redeem shouldn't be so high that you'll struggle to reach that goal. You should be able to easily access how many points you have and what you can get for them. A tiered rewards program will give you options to redeem your points at various times. Another option is to work toward a larger reward over time. Either way, the instructions for claiming what you've earned should be visible on the website and clearly written in any paperwork. You shouldn't have to jump through hoops.

Research and Compare

With hundreds of credit cards offers available, both no-fee and those that charge and annual fee, you should be able to find a credit card that meets all of your needs. Compare different offers by reading all of the information and fine print. If you have questions that aren't answered on the card issuer's website, call their customer service department to get full details. An important note to remember is that it never hurts to ask that the annual fee be waived for the first year. Many companies will be happy to comply with your request to gain a new customer.

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