Nobody Likes Credit Card Annual Fees: Here’s How To Get Them Waived

Here's everything you need to know about credit card annual fees, including how to avoid paying them.
10/21/19 | By Larissa Runkle
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Paying $100-plus annually just to use a credit card may sound crazy, but there are several reasons this type of up-front investment might make sense. A variety of credit cards charge their users hefty annual fees, and until you understand the reason why, it can all feel pretty excessive.

The key thing to keep in mind with annual fees is that not all cards have them, and the ones that do probably offer something that makes the expense worth it. Whether this includes generous welcome offers, sweet travel perks, or even just the chance to build up your credit history — you’ll want to make sure that any card with an annual fee is able to give you something others can’t.

Keep scrolling to learn more about how credit card annual fees work, plus details on how you can try to get your annual fees waived.

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Why do some credit cards have an annual fee?

There are two main reasons credit cards charge annual fees, and the first applies to users with low credit scores. Whether your credit score is truly bad or your credit history is limited, credit card companies may perceive you as a high-risk borrower. From a statistical standpoint, borrowers with bad or limited credit are much more likely to make late payments or even default on their debt. To insure themselves against this risk, some credit card companies may charge low-credit borrowers higher interest rates and fees — some of which may include annual fees.

But the reason for charging low-credit borrowers with high annual fees isn’t strictly a matter of risk management. Knowing that borrowers with poor credit have fewer card options than those with better credit, some credit card companies simply charge these fees because they know people will pay them.

Credit cards that offer rewards often come with annual fees as well. Whether a card offers a welcome bonus, travel perks, or some other benefit, the reason for an annual fee here is pretty straightforward: Offering those rewards comes at a cost. And to offset that cost, credit card companies charge you a fee.

Should you get a credit card with an annual fee?

This all depends on you and your needs as a borrower. If your credit history is severely limited or your credit score is low, then paying for an annual fee in order to start building credit may be worth the cost. If the card you’re applying for offers amazing benefits and you’re able to calculate that the benefits are worth more than that initial annual fee, then this might also be a situation where paying that annual fee makes sense.

In all of these scenarios, it’s important to do your research. Paying an annual fee can be worth it, so long as you understand the reasons you’re paying it and the benefits the card offers. Don’t skip on the research only to fall into the trap of thinking that a credit card with a high annual fee is your only option. Chances are, it isn’t.

Paying an annual fee isn’t always a bad thing. Like we mentioned earlier, some annual fees can be worth the cost, especially if you plan on taking advantage of the benefits that come with your card. Here are a few popular credit cards with annual fees and great perks.

Card name Annual fee Benefits
Chase Sapphire Preferred $95 Earn 60,000 points after spending $4,000 on purchases in the first 3 months


2X points on eligible dining and travel, and 1X points per $1 on all other eligible purchases

Chase Ink Business Preferred Credit Card $95 Earn 80,000 bonus points after spending $5,000 in the first 3 months


3X points on the first $150,000 spent each year on travel, shipping, internet, cable, or phone services, and advertising purchases with social media and search engines; and 1X points per $1 on everything else

American Express Blue Cash Preferred $95 Earn a $250 statement credit after spending $1,000 on purchases in the first 3 months


6% cash back at U.S. supermarkets on first $6,000 in purchase per year, 6% cash back on select U.S. streaming services, 3% cash back at U.S. gas stations and on eligible transit, and 1% cash back on all other purchases

Chase Sapphire Reserve $450 Earn 50,000 points after spending $4,000 on purchases in the first 3 months


3X points on travel immediately after earning $300 travel credit, 3X points at restaurants and 1X points per $1 spent on everything else

As you can see, annual fees can vary quite a bit, starting around $100 and going all the way up to roughly $500. Whether or not this expense is worth it for you depends on how you plan to spend on your credit card.

If you’re looking for a great rewards card, you might consider paying more in annual fees to get serious travel perks. Although the up-front investment might seem steep, some cards — like the Chase Sapphire Reserve — will easily pay this expense back in travel benefits.

How to get your credit card’s annual fee waived

If you have a credit card with an annual fee, then you might be wondering if there’s a way to stop paying it. This would make sense, since according to a 2017 survey by Experian, a majority of people asked (54%) prefer credit cards without annual fees. But what if you already signed up for one with a fee? You may yet have some options to get that fee waived.

Start by contacting your credit card company directly to determine if they’ll waive that fee. Explain your reasons for wanting the card fee waived and see what they have to say. Be nice but direct when speaking with them, and be sure to mention as well if you’ve been a loyal cardholder for any period of time.

If you’re a loyal cardholder with a solid credit score, you may be able to leverage this in order to get your annual fee waived. You can also do some research on similar cards (with lower fees) and contact your current card company with this information. Tell them you’re thinking of switching over. If they’re interested in retaining your business, they might just waive the fee.

A final option is to call your credit card company and tell them you’re thinking of cancelling. This should be used as a last resort, but in some cases (especially for members of the military), card companies may offer to waive certain fees in order to keep you as a customer.

If you are an active member of the military, be sure to familiarize yourself with your rights under the Military Lending and Servicemembers Civil Relief Acts. Both of these offer exclusive financial protections and benefits for military members, some of which include having annual fees waived.

The important thing to keep in mind when negotiating with card companies is that if you’re an ideal borrowing candidate (good credit score, history of on-time payments, etc.) your business and the interest you pay on transactions, earns them more money than any annual fee.

The final word

Do your homework before signing up for any card with an annual fee, and make sure the expense is worth it for you. Pick out a few cards you like and then compare their benefits and fees. Check as well if there are similar cards with no annual fees. Never sign up for a card expecting to have fees waived. Instead, take the time to pick a card with benefits and fees that work for you.

#1 Travel Rewards Card

Chase Sapphire Preferred

Chase Sapphire Preferred

Chase Sapphire Preferred

Benefits

  • 60,000 point sign-up bonus
  • 2X points on eligible dining and travel purchases
  • 25% more value when redeeming rewards for travel through Chase Ultimate Rewards
  • Premium travel protection benefits
  • No foreign transaction fees
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