When you’re in debt for the first time, you find out that you can be a lot more frugal than you ever thought possible. At the same time you won’t want to spend extra money where you can save it. A perfect example in which this can be applied is with the annual fee charged by some credit companies.

Annual fees aren’t a great amount- sometimes as cheap as $45 or less. You wouldn’t necessarily turn down a credit card based on this alone, but when you put it into perspective it seems more unfair. By spending $300 a year on your credit card, about 15% of that total is going to the annual fee- and that isn’t counting interest! Credit card annual fees don’t seem so innocent or inexpensive now, do they?

So we have proven annual fees can be costly. So why do we pay them? One reason is that the borrower doesn’t have a great credit history. Lenders will use the “Your credit isn’t good enough” excuse to help milk more money out of your bank account when they can. Sadly your only way out of this mess is to increase your credit rating or find a new lender.

Reward-based credit cards are fun to have around, but they are at better odds of having an annual fee. Regardless, you can still go forth with the application and get more value in rewards than what you would pay for the annual fee. It comes down to how much you plan on using the credit card. If you don’t use it much, the annual fee might just be the deal breaker.

So there might be a few reasons where an annual fee is expected- but don’t give in yet! Lenders are so competitive in the current market that you won’t have much trouble going to another lender and finding that they don’t charge an annual fee. In fact, most of the major credit companies won’t do so. Consumers have clearly won the war on annual fees through the process of natural selection.

Sometimes all you need to do to get what you want in life is to ask for it. If you don’t want an annual fee, ask for it to be waived. Lenders are more desperate than you realize in having your business, and odds are they will agree, albeit with a smidgeon of hesitation. If they don’t agree, its’ time to go back to square one.

Closing Comments

Annual fees aren’t necessary after so many lenders have pledged to do away with them. Clearly, the ball is in your court and the decision is all yours. After all, lenders need you just as much as you need an advance on a sum of money.

Learn more about student credit cards and no annual fee credit cards.