Some credit cards have an annual fee while others do not. So, before you make a final decision, it’s important to know exactly what you’re getting.
Here are several questions to address before applying for a credit card with an annual fee:
1. How much is the annual fee?
There is a big difference between a credit card with a $100 annual fee and one with a $500 annual fee.
Simply put, the more you pay the more you should expect in return.
2. What are the benefits of the credit card?
Any time you’re asked to pay an annual fee, you should expect something great in return. From a high quality rewards program to a lower interest rate, you need to get something in exchange for the money you’re paying out.
3. Will you take full advantage of the benefits?
It’s one thing to know that a credit card has benefits, but another thing entirely to actually take advantage.
For example, if you don’t travel often, earning travel reward points doesn’t do you much good. Make sure the benefits of the offer align with your goals and approach as a consumer.
4. Are there other fees or fine print?
Before you decide it’s okay to pay an annual fee, make sure you become familiar with any other fees or fine print that could come into play in the future.
An example of this would be a requirement to hit a point threshold before you can redeem them for travel, cash back, or other items.
5. What are the other details of the offer?
Don’t focus so much on the annual fee that you lose sight of the other details. This can include but is not limited to: interest rate, other fees (such as foreign transaction), and available tools (such as online account management).
You should now have a better idea of what it takes to get a credit card with an annual fee. Are you going to move down this path, or opt for another type of offer?
