Credit Card Annual Fees Explained: How They Work and How to Avoid Them

No annual fee for life! That is one of the promotions we often hear when it comes to credit cards.

Some cards have no annual fee for life. Others waive the fee during the first year or after you meet a spending requirement.

If you're new to credit cards, here's everything you need to know about annual fees and why credit card users try to get it waived.  

According to card issuers, annual fees help cover account maintenance and cardholder benefits such as rewards programs, discounts, and travel perks.

An annual fee, also called an annual membership fee, is separate from other credit card costs, such as:

• Finance charges on unpaid balances
• Late payment fees
• Cash advance fees
• Foreign transaction fees
• Card replacement fees

Cards may use different fee setups:

• No annual fee for life: You don’t pay a yearly fee while your account follows the card’s terms.
• Free for the first year: The fee may start in the second year.
• Conditional waiver: The fee is removed after you meet a spending or promo requirement.
• Waiver upon request: You can ask the issuer to reverse the fee, but approval isn’t guaranteed.

Always read the latest fee table and card terms before applying. 

Here are some ways to avoid or reduce annual fees:

1. Choose a card with no annual fee - Check if the offer is free for life or only for a limited period.
2. Meet the waiver conditions - Review the required spending amount, eligible purchases, and deadline.
3. Ask for a fee waiver - Contact the issuer after the fee appears on your statement. Approval and conditions may vary.
4. Use rewards points - Some card programs let you use points to cover the fee.
5. Close unused cards properly- Pay any remaining balance and ask the issuer to close the account. Leaving a card unused may not stop the fees.

Annual fee rules can differ from one issuer and card to another. To see how these options work in practice, here’s a quick look at the fee structures offered by UnionBank and BPI. 

UnionBank cards use different annual fee structures.  

Based on publicly available issuer fee schedules, the U Visa Platinum and U Platinum Mastercard don’t charge an annual fee for principal and supplementary cardholders.

Other UnionBank cards may have different fees and conditions and you can check the official credit card fee table for the latest details.

When reviewing a Union Bank credit card no annual fee option, also compare its finance charges, other fees, rewards, eligibility rules, and payment features. 

BPI also offers cards with different annual fee arrangements. Based on publicly available issuer fee schedules, the BPI Free+ Card is currently listed as having no annual membership fee for life.

Other BPI cards may charge a yearly fee, waive it during the first year, or offer a waiver after certain conditions are met.  

Review the latest BPI credit card annual fee details on its official rates and fees page.

Always check if a fee waiver is permanent or part of a limited promotion before applying. 

A credit card with no annual fee may cost less to maintain, but the membership fee is only one part of the card’s total cost.

• Compare these factors:
• Finance charges and transaction fees
• Statement dates and payment deadlines
• Rewards or cashback conditions
• Security features
• Payment channels
• Mobile account tools

While many banks use annual membership fees, some cards use different fee structures. For example, the Home Credit Card applies a monthly membership fee that may be waived when spending requirements are met, subject to current terms and conditions.

Eligible customers can use the card for qualified in-store and online purchases and manage their transactions and payment dates through the Home Credit App. 

Can annual fees be waived?

Some card issuers permanently waive annual fees, while others require customers to meet spending requirements or promotional conditions.

Is a no annual fee credit card always the better option?

Not necessarily. Some cards with annual fees offer rewards and benefits that may offset the cost.

What should I compare besides annual fees?

Compare finance charges, repayment terms, rewards, security features, and account management tools. 

A no annual fee credit card can help lower recurring costs, but the best card is one that offers value based on how you spend, pay, and manage your finances.  

Always compare fees, rewards, payment flexibility, and account features before making a decision.  

For eligible customers, the Home Credit Card offers a convenient way to shop and manage purchases through the Home Credit App.  

Cardholders can track transactions, monitor payment dates, and access account information in one place.

Check the Home Credit App today to see if you're eligible for a Home Credit Card offer and explore its latest features, fees, and benefits.