How does the credit card annual fee work?

Do you know what credit card annual fees are and how they work? If you don't, you'll find out today!

A card with no annual fee is very advantageous and economical, however, that is not the only thing that defines whether the credit card is good or not.

In the Financial Market there are great credit cards with or without annual fees, but, after all, how the credit card annual fee works?

You'll find the answer to this question divided into topics. See what awaits you below:

• What is a credit card annual fee?
• When is the annual fee charged?
• What happens if I don't pay this fee?
• Am I obliged to pay the annual fee without using the card?
• Is it possible to cancel the credit card annual fee?
• How much is the credit card annual fee?
• Conclusion.

What is a credit card annual fee?

When you purchase a credit card, there are some services performed behind this item, for example, maintenance, administration, management and monitoring of the card.

To cover these services, an annual fee is charged. Some can be quite high, especially when the card offers more benefits and is intended for high-income customers.

In some cases, companies justify the annual fee by maintaining the benefits. At Itaucard, the promise is a little different: the bank says the annual fee is returned to the user in the form of benefits.

When is the annual fee charged?

Generally, the annual fee is charged monthly on your credit card statement, that is, it is detailed on the statement, so its due date is the same as your card payment. 

What happens if I don't pay this fee?

To understand how the credit card annual fee works, It is important to know what the consequences are if you do not pay this fee.

First of all, if you purchased a credit card with an annual fee, know that it is mandatory, that is, you have to pay it.

Some banks waive the annual fee depending on the amount spent on the card statement, but this is different.

If you didn't qualify for the exemption, you must pay the monthly fee. This fee is automatically charged to your card statement, so the only way to avoid paying it is to skip the bill.

As a result, you'll default. A person with a negative credit rating has difficulty getting credit again, has their credit limit blocked, and other consequences.

Am I required to pay an annual fee without using the card?

It depends. If you haven't unlocked your credit card yet, you don't have to pay the annual fee. 

The bank or issuer that charges the annual fee without the user having requested to unblock the card is charging in advance for a service that was not used.

Therefore, it is violating a consumer right, and the conduct is prohibited by the Consumer Protection Code (Law 8078/90).

Is it possible to cancel the credit card annual fee?

Yes. It's possible. However, it's not that simple! You have to be flexible and persuasive.

First, you need to contact your bank and try to negotiate the cancellation of this fee.

You need to be consistent and persistent, it's even worth threatening to change banks, but the important thing is to try.

If it works, you risk losing some of the benefits associated with the credit card. If it doesn't, you can opt for a credit card with no annual fee.

Speaking of which, on our blog you'll find suggestions for several credit cards with no annual fees. Be sure to take a look at the "cards”.

How much is the credit card annual fee?

The annual fee depends on each card, it varies according to the issuing bank, brand and also model, for example, Black cards tend to have higher fees than others.

When choosing a credit card, you need to check whether it has this fee, what the amount is, and whether the issuer offers monthly installments.

There are cards with affordable values that cost less than R$10.00, but there are cards where the annual fee can reach up to R$1,500.00, which is the case with corporate cards.

Typically, cards with high annual fees are more restricted and have higher approval requirements.

However, it's possible to find cards with affordable annual fees and many benefits. So, it's clear How does the credit card annual fee work?

Conclusion

To understand how the credit card annual fee works, you had to go through a journey between the topics with the main questions on the subject.

Now, I'm sure you already know what it is and how it works, but beyond that, you also know that the annual fee doesn't define whether the card is good or bad.

However, economically speaking, it is possible to find great credit cards with no annual fee.

So, if you can avoid this fee, do it. Your wallet will thank you!

Recommended reading: INSS benefit ceiling rises to R$$7,087.22.