Is a lower rate worth the annual fee?

This calculator shows the tradeoff in holding a no-annual fee card with a higher interest rate versus an annual fee card with a lower rate. You can also enter any introductory "teaser" rates and the period offered.

Your decision depends, in large part, on your card use. If you pay off your balances promptly, you don't incur any card interest expense. There's little reason to pay an annual fee for the privilege of paying the card company promptly.

If you tend to carry a card balance, you should aim to minimize interest expenses by using a low-interest rate card. You may have to pay an annual fee in exchange for the low rate but may save more in interest expense during the year than the cost of the annual fee.


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Credit card ratings: Editors from CardRatings.com rate credit cards objectively based on the features the credit card offers consumers, the fees and interest rates, and how a credit card compares with other cards in its category. Ratings vary by category, and the same card may receive a certain number of stars in one category and a higher or lower number in another.

The ratings are the expert opinion of the editors from CardRatings.com, and not influenced by any remuneration their website may receive from card issuers.


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