Definition
A yearly charge some credit cards levy just for holding the card. Fee cards usually offer richer rewards or perks; the fee is only worth paying if the value you actually use exceeds it.
Why it matters
An unused premium card quietly costs real money every year. Running the fee-versus-benefits math annually, and downgrading rather than closing when it fails, protects both cash and credit history.
Example
A travel card charges $95 a year. One year the cardholder uses $400 of credits and rewards: clearly worth it. The next year they travel once, use $60 of value, and downgrade to the no-fee version instead of closing the account and shortening their credit history.
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.