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A credit card annual fee is the price that some cardholders pay to use a certain credit card. While there are plenty of credit cards on the market that don’t come with an annual fee, the credit cards that charge an annual fee tend to have better cardholder perks that can outweigh the cost of the annual fee if the card is used optimally.

Keep reading for more insight into annual fee credit cards.

What Is a Credit Card Annual Fee?

Annual fees are costs charged by many (but not all) credit card issuers to help finance their service, including cardholder perks, such as travel credits and free checked luggage on flights.

The amount of an annual fee factors into how much a credit card costs overall, and it varies from card to card. Credit card annual fees can start as low as around $39 and go as high as thousands of dollars for luxury credit cards.

Usually how credit cards work is that cards with sky-high annual fees also offer a lot of extra perks to make the credit card worth the money. For instance, the cardholder may gain exclusive access to airport lounges, credits towards rideshares, or be able to tap into competitive introductory reward bonuses.

However, there are cases where an annual fee is charged for credit cards designed for consumers with low credit scores. These credit cards don’t offer great rewards, and instead give consumers with poor credit a chance to build their credit by using credit cards responsibly. Eventually, the goal is for the cardholder to positively impact their credit so they can qualify for credit cards with lower interest rates and better perks.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

How Do Credit Card Annual Fees Work?

When you pay the annual fee on a credit card varies depending on your card issuer. Credit card issuers either charge annual fees on either a yearly basis, or they may divide the fee up into smaller monthly installments.

If your fee is charged once a year, then it usually will appear on your first statement after you open your account. You’ll then get charged every 12 months thereafter. In the instance an annual fee is divided into smaller monthly payments, these will get included on the monthly statement the cardholder receives.

You pay your credit card annual fee just like you’d pay any other credit card charges listed on your monthly statement.

Which Credit Cards Typically Have an Annual Fee?

There are three main types of annual fee credit cards you might consider.

Reward Cards

Credit cards that can offer a high-value rewards structure or that have a strong introductory bonus often come with an annual fee. If the card is used strategically, it’s possible to earn enough credit card rewards to cancel out the cost of the annual fee and other cardholder fees. You may earn rewards like cash back, travel points, or discounts on specialty purchases.

Premium Credit Cards

A premium credit card that offers luxe perks like private airport lounge access or a travel concierge is likely to charge an annual fee to use the card. If you’re considering one of these cards, make sure to crunch the numbers to make sure you’ll use enough of the perks to offset the cost of the annual fee.

Secured Credit Cards

A secured credit card is designed to help consumers with bad credit scores build their credit. These cards require a deposit to “secure” the card, and that amount also usually serves as the card’s credit limit. On top of the deposit, secured credit cards often carry an annual fee.

For some, the cost of a secured card may be worth it for the opportunity to build their credit score, which can make it easier to qualify for lending opportunities in the future. Still, make sure it’s within your budget.

Recommended: What Is the Average Credit Card Limit?

How Are Credit Card Annual Fees Charged?

As briefly mentioned above, some credit card issuers charge the annual fee once a year, while others split up the annual fee into smaller monthly installments.

The annual fee shows up on the credit card statement alongside normal credit card charges, and the cardholder pays the annual fee as part of that month’s credit card bill. Remember that even if you have an authorized user on a credit card, it’s still the primary cardholder’s responsibility to make payments, which includes any fees.

Avoiding Credit Card Annual Fees

If you’re trying to avoid credit card fees, it’s entirely possible to avoid paying annual fees. There are plenty of credit cards on the market that don’t charge an annual fee at all.

If someone is interested in a credit card with an annual fee, such as a premium rewards card, they can try to get the first year’s annual fee waived. Some credit card issuers offer to do this from the get-go. However, if someone is an existing cardmember with the issuer and their introductory offer doesn’t include waiving the first year’s fee, they can request a one-time waiver.

Before signing up for a credit card with an annual fee, it’s important to evaluate your spending habits. You want to ensure that you can comfortably afford to cover the annual fee for the credit card. Also investigate whether you’ll earn enough benefits from the card to justify the cost of the annual fee.

The Takeaway

Annual fees are often charged by credit card issuers to cover the cost of their services and perks. Fees can range from around $39 to thousands of dollars for ultra-premium cards, and it can be wise to review them carefully and make sure you are comfortable paying them. It may be possible to avoid these fees by negotiating with your card issuer or qualifying for this reward.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

How do you pay the annual fee on your credit card?

If someone has an annual fee credit card, the annual fee will appear on their credit card statement. The fee may appear every 12 months or in smaller increments on a monthly basis. The cardholder then pays this fee as a part of their monthly bill in addition to any other purchases they made with the credit card during that billing cycle.

How can I avoid paying annual fees on my credit card?

Alongside choosing a credit card that doesn’t charge an annual fee (there are plenty of options on the market), a consumer may be able to get the first year of an annual fee waived as a new cardholder incentive. It only makes sense to open a credit card with an annual fee if the account holder’s spending habits line up with the rewards structure of the credit card. That way, they can earn enough cash back, miles, or other perks to outweigh the cost of the annual fee.

Do all credit cards have annual fees?

There are tons of great credit cards on the market that don’t come with annual fees. There’s never a reason to pay an annual fee if someone decides that’s not a good use of their money.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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Budgeting can take some work to get just right. One area that often trips people up is understanding exactly how much they spend each month. Figuring that out can take some trial and error as well as fine-tuning. And even if things are humming along well for a few months, you can suddenly get hit with a surprise bill or a colossal credit card statement that jeopardizes your finances.

To help avoid that scenario and make budgeting easier, it’s important to consider some of the items that are often omitted from the expenses list when people set up budgets. This can help ensure that your hard work managing your finances stays on track.

Read on to learn about commonly overlooked expenditures and how to work them into your budget. That way, you’ll know exactly where your money is going, which can help you avoid debt.

What Are Some Expenses That Are Commonly Budgeted For?

When thinking about a basic living expenses budget, some items are so major, recurring, and important that it would be hard to overlook them. These likely include:

•   Rent or mortgage payments

•   Homeowners association fees

•   Utilities

•   WiFi

•   Cell phone bill

•   Car and/or student loan payments

•   Groceries

•   Daycare or tuition

•   Gym memberships

•   Medical insurance and pet insurance premiums

•   Transportation

Why Is It Important to Budget for Forgotten Expenses?

It’s understandable that some expenses may slip your mind when creating a budget. The typical person probably has dozens of things they are paying for in a given month. But these sneaky forgotten expenses can wreak havoc on your budget and prevent you from reaching your financial goals.

That’s why it’s important to pay close attention to your spending so you can adjust your budget as needed. These are some of the reasons why it’s important to budget for forgotten expenses:

•   Creating a successful budget requires knowing what you spend each month.

•   If you forget to add an expense and run out of funds to pay for it, you may end up pulling funds out of your savings account and sacrificing future goals to cover it.

•   If you really overspend due to forgotten expenses, you may have to turn to high-interest credit card debt to make ends meet.

Recommended: How Much Should I Save a Month?

20 Commonly Forgotten Budget Items

If you are convinced of the importance of accounting for all of your expenses, then it’s time to move ahead. Let’s look at some commonly forgotten budget items to make sure they don’t fall through the cracks.

1. Home Maintenance

While it’s hard to forget about your mortgage payments, the other expenses of homeownership are easy to forget about and add up fast. From hiring a gardener to regular carpet cleanings to random handyman repairs, it makes sense to leave room in a budget for home maintenance as those charges tend to frequently pop up.

2. Vehicle Maintenance

Budgeting for a car payment is probably top of mind, since you likely don’t want to risk getting hit with late payment fees or losing your car. The same generally holds true for car insurance. But those aren’t the only car expenses worth planning for. Drivers also need to make room in their budget for such car-related expenses as tune-ups and repairs. You’ll also want to remember to include gas, insurance, parking and toll road fees; they also have a way of adding up.

3. Taxes

Income taxes may be withdrawn from your paychecks, but property taxes generally aren’t. Forgetting about these bills is a common budgeting mistake. Then, when the payment does come due, it’s a nasty surprise that can throw your budget out of whack.

4. Medical Expenses

It’s easy to forget about or overlook your medical expenses, including over-the-counter and Rx drugs, dental cleanings, regular checkups, or getting new glasses or contacts. These are all vital expenses worth planning for. Budgeting for medical expenses can help improve your financial health too by helping you avoid debt.

5. Donations/Giving

Perhaps you donate when you see a worthy cause on social media or sponsor a colleague who’s doing a charity walk. This kind of spending is easy to forget about, so make sure to put it into your budget so you don’t wind up short of funds when you want to help others.

Recommended: 15 Creative Ways to Save Money

6. Office/School Supplies

Items that keep your home office or study space up and running need a spot in your budget too. This means accounting for things like toner, paper, stamps, shipping supplies, and software subscription fees.

7. Renewals for Licenses (Insurance, Drivers, Etc.)

Some expenses only pop up once a year, or every few years, like driver’s license or insurance renewals, but it can be helpful to split up that expense into smaller chunks and save for it month by month.

8. Seasonal Maintenance

Some home-maintenance needs are ongoing, but others come around seasonally. Similar to license renewals, it can be helpful to save up for pricey seasonal maintenance needs, like gutter cleaning and snow removal, all year round. That way, you won’t come up short when a bill hits.

9. Items for Pets

Pets bring a lot of love into a home, but also a lot of expenses. From vet fees and pet insurance to toys, food, and doggie daycare, these expenses can be significant and deserve a place in your budget.

10. Personal Items (Hair, Nails, Etc.)

A bottle of shampoo here, a manicure there, plus regular haircuts — the myriad expenses that help us look and feel our best can add up quickly. They may only cost a few bucks a pop (hello, body wash) or only happen once in a while (that fresh set of highlights), but it’s wise to be prepared for the cost.

11. Lump Sum Bills

Some memberships and insurance plans may only renew once or twice a year. Many of them are lump sum bills, meaning you are expected to pay them in full, right away. Which is why it can be helpful to save money each month to make sure you have the funds to cover lump sum bills.

Recommended: 18 Common Misconceptions About Money

12. Ridesharing

If you rely on ridesharing apps to get around (whether it’s once a month or several times a week), it’s important to budget for that expense. The convenience can make it feel like a free ride…but it isn’t!

13. Delivery App Fees

Another app-based expense to look out for are the delivery fees that get added when you order dinner or groceries from the comfort of your home. Also, if you tip the driver, make sure to include that as well. These fees definitely add to the price of what’s being dropped off.

14. Business Expenses (Conferences, Trips, Etc.)

You may incur expenses related to work that aren’t reimbursed by your employer. These include such purchases as buying professional clothing, renewing professional licenses, or pursuing continuing education to further your career.

15. Entertainment

From travel to movies and concerts to museum memberships, there’s no shortage of entertainment costs that need to make their way into our budgets.

Recommended: Are You Bad with Money? Here’s How to Get Better

16. Subscriptions or Membership Fees

Speaking of entertainment, you may be paying for one or more streaming platforms, like Netflix, HBO Max, and Hulu. And you may have other subscriptions, like meal kits, personal-care supplies, gym memberships, or even a wine- or beer-of-the-month club. These kinds of one-click sign-ups may not make it onto your budget, but they should.

17. Gifts for Others

From swanky birthday dinners to holiday gifts to wedding presents, you may spend a chunk of change every year to make others happy. It can help to save for the costs of gifts all year round. You can do this by estimating how much you expect to spend in this category for the year and then break it down into a monthly expense by adding a “presents” line to your budget. That way, when these expenses do pop up, you’ll be prepared.

18. Coffee

There’s nothing wrong with enjoying a pricey latte on the go now and then, as long as it finds a spot in your budget. These kinds of little treats can be an important part of self-care, and budgeting for them properly can be an example of financial self-care.

19. Roadside Assistance Costs

One extra that some drivers may find very worthwhile is roadside assistance service. Keep it in the budget, and stay safe.

20. Laundromat/Dry Cleaners

Whether you drop off your clothing at a laundromat once a week and have them washed and folded for you, or you DIY but occasionally drop clothing off at the dry cleaner, these are all costs that need to be considered in your monthly budget.

Why Are These Expenses Commonly Forgotten?

As you can see, the list of commonly forgotten monthly expenses is long. One key reason is that it’s relatively simple to remember to add the really big, recurring expenses — like rent or a car payment — into a monthly budget. But there are plenty of “invisible” expenses that we pay for with a simple click online (whether that means paying for a subscription service or a life insurance policy) that just don’t come to mind when setting up a budget.

There are also those very infrequent charges — say, an annual technician visit to clean your heating system — that we can overlook until they hit. It’s also easy to overlook small but relatively frequent purchases, such as laundry detergent or printer paper, that can add up over time.

Accounting for as many expenditures as possible will help you hone your budget and be as prepared as possible for the bills that come your way.

Banking With SoFi

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What are common monthly expenses?

Common monthly expenses include rent or mortgage payments, utilities, food, cell phone bills, and loans or credit-card payments. Many of us also purchase clothes, meals/beverages away from home, personal care products, medical insurance, and have transportation expenses, which may or may not include car payments and insurance.

What are some hidden expenses you may have?

Some commonly forgotten budget items can include medical expenses, petcare costs, charitable donations, home- and car-maintenance charges, and subscription services, whether that’s a gym membership or streaming channels.

Will my budget be messed up if I do not add these forgotten expenses?

Yes, it’s possible to mess up a budget if you don’t include all of your expenses. You may wind up with bills to pay and not enough income to cover them. To resolve this, you might have to dip into your savings or start putting things on your credit card, neither of which is ideal. The good news is, each month offers a fresh start to make your budget work better.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Eligible Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


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