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When do you pay the annual fee on a credit card?

If you’ve got a $0 annual fee for the first year or want to keep track of ongoing costs, here’s what you need to know.

A credit card annual fee is usually charged when you first activate the account, and then around the same time every 12 months after that.

If you have a card that offers a $0 annual fee in the first year, you won't have to pay an annual fee until around 12 months after you activate the card. And, of course, you won't pay any annual fee if you get a credit card that offers no annual fee ever.

How can I avoid paying a credit card annual fee?

If you have a credit card that offers no annual fee in the first year, you can avoid this cost by cancelling the account within the first 12 months. To do this, you’ll need to pay off your full balance and then close the account before the anniversary of your account opening.

For example, say you got a credit card on 1 January 2022 that offered a $0 annual fee in the first year and then charged a $250 annual fee after that. If you decided the $250 annual fee wasn't worth it for you, then you would need to cancel the card before 1 January 2023 to avoid being charged an annual fee.

What is the difference between an annual fee and a monthly fee?

A credit card annual fee is a yearly charge that banks and other financial institutions apply to some accounts. A credit card monthly fee is similar to an annual fee, but is charged each month instead of once a year. Both annual fees and monthly account fees are separate from any interest charges that may apply to your card.

Annual fees are more common on credit cards, but a number of new cards have launched in the last couple of years that have monthly fees – such as the CommBank Ultimate Awards Credit Card and no interest, flat fee cards from NAB, CommBank and Westpac.

Tip: Check how much a monthly fee will cost you each year

A monthly fee can help space out the account costs, but it's still useful to check how much it will cost you each year – especially when you're comparing cards.

For example, a card that costs $10 a month is equivalent to a $120 annual fee. Sometimes, you can also get the monthly fees waived by meeting a set of requirements, such as paying the full balance by the statement due date or meeting a spend requirement.

What if I want to cancel the credit card after the annual fee is charged?

First thing's first: You can cancel a credit card at any time, as long as the balance is $0. So if the annual fee has already been charged, you'll usually need to pay it (and any other balance on the card) before you can cancel the card.

Other ways to avoid a credit card annual fee

  • Credit cards with no annual fee for life. A selection of credit cards offer no annual fee for life, giving you a way to avoid this cost on an ongoing basis.
  • Annual fee waivers. Some credit cards offer to waive or refund the cost of the annual fee or monthly fee when you meet certain conditions, such as spending a set amount each month or year or not carrying a balance. You can check your credit card's terms and conditions or ask the provider to find out if this type of waiver is available on your current card.
  • Home loan packages. Some banks offer to waive a credit card’s annual fee when you request the card as part of a home package.

Compare credit cards offering no annual fee

1 - 11 of 61
Name Product Annual fee Purchase rate p.a. Balance transfer rate p.a.
American Express Low Rate Credit Card
Offers a low ongoing interest rate of 10.99% p.a. and a $0 annual fee. Plus, complimentary purchase cover.
Virgin Money No Annual Fee Credit Card
0% for 6 months, then 19.99%
Save with a $0 annual fee and 0% p.a. on purchases for 6 months.
NAB Low Rate Credit Card
$0 first year ($59 after)
0% for 28 months with 2% balance transfer fee, then 21.74%
Get a 0% p.a. interest rate on balance transfers for the first 28 months (with a 2% BT fee). Plus, save with a $0 first-year annual fee.
Kogan Money Card – Exclusive Offer
9.99% for 18 months, then 21.99%
0% for 18 months with 2% balance transfer fee, then 22.74%
Save with 0% p.a. interest on balance transfers (with a 2% BT fee) and 9.99% p.a. on purchases, both for 18 months, plus, an ongoing $0 annual fee.
Qantas American Express Discovery Card
Earn uncapped Qantas Points for every $1 dollar spent, plus a $0 annual fee.
ANZ Platinum Credit Card
$0 first year ($87 after)
Get $300 back on your card when you spend $1,500 on eligible purchases in the first 3 months and a $0 first-year annual fee. Plus, complimentary overseas travel insurance.
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
$0 first year ($149 after)
0% for 24 months, then 20.99%
Get 0% p.a. on balance transfers for 24 months (with no BT fee) and a $0 annual fee in the first year.
American Express Velocity Escape Card
Save with a $0 annual fee and earn 0.75 Velocity Points per $1 on everyday purchases.
American Express Platinum Edge Credit Card
$0 first year ($195 after)
Save with a $0 annual fee in the first year. Plus, $200 Travel Credit every year.
NAB StraightUp Card
Save with 0% p.a. interest charges and 0% foreign transaction fees. Plus, $0 monthly fees when you don't use the card or carry a balance.
More Info
Citi Simplicity Card
0% for 6 months, then 21.49%
0% for 6 months, then 22.24%
Get 0% p.a. interest on purchases and balance transfers for 6 months and an ongoing $0 annual fee.
More Info

Finder survey: What type of no annual fee offer do Australians have with their credit card?

Ongoing $0 annual fee65.81%
Annual fee that's waived if you meet certain conditions14.34%
$0 annual fee just for the first year13.24%
Annual fee that's waived for certain customers (eg. a home loan package)4.78%
Source: Finder survey by Pure Profile of 1113 Australians, December 2023

Tips to save money on your credit card’s annual fee

If you have a credit card that charges an annual fee, here are some ways to keep the cost as low as possible:

  • Pay the annual fee as soon as it is charged. Once the annual fee is added to your balance, it will attract interest charges at the standard rate for your card. You can avoid this added cost by paying off the annual fee as soon as it’s charged.
  • Check if you’re eligible for a fee waiver. Call your credit card company and ask if there are any options for fee waivers on your card. Sometimes, you might be eligible for one without realising it.
  • Use complimentary extras. If your card comes with benefits such as rewards or complimentary insurance, the value you get from using them could help balance out the cost of the annual fee. But it’s a good idea to estimate the value of these perks to make sure they are actually worth it.

Example: Working out if complimentary extras will balance out the cost of a card’s annual fee

Say you have a credit card with a $99 annual fee and complimentary overseas travel insurance. If you travel overseas every year and usually pay more than $99 for your insurance, then this perk would offset the card’s annual fee.

But if you rarely travel overseas or tend to find cheaper travel insurance options, you might find a card with a lower annual fee or $0 annual fee is more affordable for you.

While most credit cards come with annual fees, there is a range of options that offer $0 annual fees for the first year or for life. However, other features such as the interest rates, complimentary extras and rewards can also affect a card’s overall value.

So if you’re looking for a new credit card, make sure you think about what features are worth the most to you and then compare a range of options to help you find one that fits your goals.

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Amy Bradney-George's headshot

Amy Bradney-George was the senior writer for credit cards at Finder, and editorial lead for Finder Green. She has over 16 years of editorial experience and has been featured in publications including ABC News, Money Magazine and The Sydney Morning Herald. See full bio

Amy's expertise
Amy has written 596 Finder guides across topics including:
  • Credit cards
  • Frequent flyer
  • Credit score
  • BNPL
  • Money management
  • Sustainability

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