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Annual Fee

Definition of 'Annual Fee'

An annual fee can be applied to a credit card, to a charge card, to a loan or to an overdraft.

Most charge cards, such as American Express, apply an annual fee for the use of the card. In return, there is usually no limit on a charge card, but the balance must be paid in full each month.

In contrast, most credit cards do not charge annual fees, and those that do often waive it in the first year of issue.

Overdrafts are usually subject to annual fees because they may or may not be used, and because they are usually subject to an annual review.

Most personal loans, for cars and home improvements and the like, do not charge annual fees, but most business loans and commercial loans do charge an annual fee. This is because business and commercial loans are often subject to a thorough annual review.

When comparing the cost of credit between lenders, the annual fee is just one component. You need to look at the interest rate and any other fees that are charged to make a proper comparison.

Use the links below to locate the term you are looking for. If you can't locate it, please get in touch.

Credit Jargon Starting 'G'

Credit Jargon Starting 'I'

Credit Jargon Starting 'J'

Credit Jargon Starting 'L'

Credit Jargon Starting 'M'

Credit Jargon Starting 'S'

Credit Jargon Starting 'T'

Credit Jargon Starting 'V'

Credit Jargon Starting 'W'

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