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What is a Credit Card Annual Fee: How It Works and How to Avoid It

Rouselle Isla

Rouselle Isla

Last updated February 14, 2024

If you’re a first-time cardholder, it’s easy to get lost in a sea of credit card options. Aside from the perks, privileges, and reward programs, one of your top considerations should be the credit card annual fee. 

Most credit card companies charge this fee, while others waive it as a welcome gift to entice new cardholders to sign up. Some don’t charge annual fees for certain cards at all.

Confused about credit card annual fees and why you must pay them? This article will help you understand how annual fees work and how to waive them.  

What is an Annual Fee on a Credit Card? 

An annual fee is a recurring and non-refundable fee that credit card issuers charge cardholders to keep their accounts active or open so they can continue to enjoy credit card benefits. Simply put, the annual fee is the cost of your credit card membership. 

Annual fees offset the cost of all the perks and rewards that come with the credit card, such as airline miles, discounts, cashback, and more. It also offsets the risk providers face when issuing credit cards to customers with poor credit history. 

💳 How Do I Know If My Credit Card Has an Annual Fee?

what is a credit card annual fee - how to know if credit card has annual fee

Check your credit card issuer’s website. Annual fees and other important information, such as credit card features, benefits, and fees, are also published on the website for cardholders’ easy reference. 

Your monthly account statement also reflects your credit card’s annual fee. Check under fees and charges.

💳 How Much are Credit Card Annual Fees?

These fees range from ₱1,000 to as much as ₱6,000. In general, credit cards that offer more features and benefits usually charge a higher annual fee. Expect to pay this fee on rewards, cashback, travel, and premium credit cards.  

Not all credit cards have annual fees, though. As mentioned, some banks offer credit cards with waived annual fees for the first year, or even for life.  

Read more: 

💳 When Do You Pay the Annual Fee on Credit Cards? 

If you’re applying for your first credit card, perhaps your biggest questions are when the annual fee is charged and when to pay for it. 

Credit card issuers charge annual fees on your credit card’s anniversary[1] (the date your credit card was approved) and every year after that, as long as the credit card account is open. Annual fees are automatically charged to your billing statement once a year.

You’ll need to pay this flat fee yearly to continue enjoying the card’s benefits. Simply pay for it like you would your regular credit card purchases on your billing statement. 

How to Avoid Annual Fees on Credit Cards

what is a credit card annual fee - how to avoid

How to waive the annual fees for credit cards from UnionBank, Metrobank, HSBC, Security Bank, BPI, RCBC, PNB, and other banks? There are three ways to do it: 

📌 Avail of Annual Fee Waiver Promos

Some banks offer acquisition or welcome gift promotions that waive annual fees for life for new customers who sign up, get approved, and meet the spending requirement within the promo period. Others waive annual fees for the first year. 

Check out the following credit cards that currently offer waived annual fees upon meeting specific criteria or for the first year: 

UnionBank Rewards Credit Card

UnionBank Rewards Credit Card
  • No annual fee forever if you apply and get approved on or before February 29, 2024
  • 1 never-expiring point for every ₱30 spend
  • 3x points when you shop and dine here and abroad

moneymax unionbank credit card welcome gift promo

Metrobank Titanium Mastercard®

Metrobank Titanium
  • No annual fee forever if you apply until February 29, 2024, and meet the minimum annual spend requirement of ₱180,000
  • 1 non-expiring rewards point for every ₱20 spend
  • 2x rewards points when you spend online, on dining, or at department stores

Metrobank Platinum Mastercard®

Metrobank Peso Platinum Mastercard
  • No annual fee forever if you apply until February 29, 2024, and meet the minimum annual spend requirement of ₱400,000
  • 1 rewards point for every ₱20 spend 
  • Up to 50% off on exclusive dining deals

Metrobank World Mastercard®

Metrobank World Mastercard
  • No annual fee forever if you apply until February 29, 2024, and meet the minimum annual spend requirement of ₱600,000
  • 1 rewards point for every ₱20 spend 
  • 2x rewards points for every ₱20 international spend
  • Up to 50% off on dining deals
moneymax metrobank credit card promo - giftaway egift dolce gusto piccolo xs jbl wave beam wireless

HSBC Red Mastercard

HSBC Red Mastercard
  • No annual fee forever if you apply until May 31, 2024, and meet the minimum spend requirement of ₱18,000 60 days from the card delivery date[2]
  • 4x reward points on shopping, dining, online, and overseas spend
  • 1 point for every ₱20 spend
  • 6% rebate on first fuel purchase at Caltex and 3% rebate all year round

HSBC Gold Visa Cash Back

HSBC Gold Visa Cashback
  • No annual fee forever if you apply until May 31, 2024, and meet the minimum spend requirement of ₱18,000 60 days from the card delivery date[2]
  • 5% cash back on dining transactions
  • 0.5% cash back on other transactions

moneymax hsbc credit card promo

Security Bank Gold Mastercard

Security Bank Gold Mastercard

  • Waived annual fee for the first year
  • 1 non-expiring rewards point for every ₱20 spend 
  • Marhaba Lounge access at NAIA 1 and 3

Security Bank Complete Cashback Mastercard

Security Bank Complete Cashback Platinum Mastercard

  • Waived annual fee for the first year
  • Cashback of up to 5% on five essential expenses: groceries, gas, utilities, dining, and shopping 
  • As much as ₱12,000 cashback annually 

Security Bank Platinum Mastercard

Security Bank Platinum Mastercard
  • Waived annual fee for the first year
  • 2x rewards points for every ₱20 spend
  • Free travel insurance 
  • Access to airport lounges worldwide via LoungeKey

Security Bank World Mastercard

Security Bank World Mastercard
  • Waived annual fee for the first year
  • Free travel insurance coverage of up to ₱10 million
  • Membership to more than 1,000 lounges in over 500 airports worldwide
  • Dining, spa, and retail offers from select exclusive airport merchants
security bank welcome gift - egift jbl horizon 2 jbl wave beam true wireless

📌 Apply for a Credit Card with No Annual Fee 

Just want a card that offers no annual fees off the bat? Go for one that offers No Annual Fee for Life (NAFFL).

What credit card has no annual fees, you ask? Some examples include the following: 

PNB Ze-Lo Mastercard

PNB Ze-Lo Mastercard
  • No annual fee for life
  • No late payment and overlimit fees
  • Lower minimum amount due

AUB Classic Mastercard

AUB Classic Mastercard-1
  • No annual fee for life 
  • 1 rewards point for every ₱50 spend
  • Payment flexibility 

Metrobank M Free Mastercard®

Metrobank M Free Mastercard
  • No annual fee for life
  • 0% installment at partner merchants
  • Discounts and exclusive offers at partner merchants

Wondering what is the best no-annual-fee credit card? The answer will depend on your needs, lifestyle, and spending habits. 

Once you’ve chosen one, how do you apply for a credit card with no annual fee? First, check the eligibility requirements to see if you qualify for the card you’re interested in. Then apply online or in-branch, complete the application form, and submit your requirements. 

Read more: How to Choose a Credit Card Based on Your Needs and Lifestyle

📌 Request an Annual Fee Waiver

You can also request an annual fee waiver from your credit card issuer. Note that this will still be subject to evaluation and approval. It also varies per bank, and the waiver conditions can change yearly. 

Here are some examples:

  • Some banks will waive the annual fee based on your credit card spending activity, such as using your card regularly and paying in full and on time.
  • Others may also request that you spend a certain amount in the coming months to gain eligibility for an annual fee waiver.
  • You may also be given other options to get an annual fee waiver, like applying for a supplementary card, using your available rewards points, enrolling in auto debit for your bills, converting straight transactions to installments, or availing of credit-to-cash or balance transfers.    

So how to get your credit card annual fee waived? Just call your credit card’s customer service hotline to inquire. Call your credit card issuer once you meet the waiver conditions. 

As much as possible, meet the conditions and requirements at least two months before your credit card’s anniversary. 

Related reading: 

Final Thoughts

Annual fees increase the cost of credit card ownership. Credit card issuers can also increase these fees over time. However, they make sense if you use your credit card frequently and enjoy premium perks and privileges you can’t get anywhere else. 

Before you sign up for a credit card, check all the fees and charges and read the terms and conditions regarding card membership fees. More importantly, ensure the credit card rewards you earn or the benefits you enjoy amount to more than the amount you pay for annual fees. This makes paying annual fees worth it.

But since annual fees reach thousands of pesos yearly, most credit cardholders prefer to avoid paying them as much as possible. If you’re looking for more cards with waived annual fees, check out your options below and apply via Moneymax:

Credit Cards with No Annual Fee Key Features and Benefits
UnionBank Rewards Credit Card*
UnionBank Rewards Credit Card
UnionBank Rewards Credit Card
  • Monthly income requirement: ₱15,000
  • Interest rate: 3%
  • 3x points when you shop and dine here and abroad
  • 1 rewards point per ₱30 spend

* No annual fee promo until March 31, 2024

Metrobank Titanium Mastercard®*
METROBANK TITANIUM MASTERCARD
Metrobank Titanium Mastercard
  • Monthly income requirement: ₱15,000
  • Interest rate: 3%
  • 1 rewards point for every ₱20 spend

*Waived annual fee for the first year

Metrobank Platinum Mastercard®*
metrobank platinum
Metrobank Platinum Mastercard
  • Monthly income requirement: ₱58,333
  • Interest rate: 3%
  • 1 rewards point for every ₱20 spend
  • Up to 50% off on premium dining offers

*Waived annual fee for the first year

Metrobank World Mastercard®*
Metrobank World MasterCard
Metrobank World MasterCard
  • Monthly income requirement: ₱333,333
  • Interest rate: 3%
  • 1 rewards point for every ₱20 spend
  • 2x points for international purchases

*Waived annual fee for the first year

Security Bank Wave Mastercard
security bank wave
Security Bank Wave
  • Monthly income requirement: ₱30,000
  • Interest rate: 2.5%
  • 1% cashback on online transactions
PNB Ze-Lo Mastercard
PNB Ze-Lo Mastercard
COMPARE NOW - PNB Ze-Lo Mastercard
  • Monthly income requirement: ₱10,000
  • Interest rate: 2.5%
  • No late payment or overlimit fees
AUB Classic Mastercard
aub classic
AUB Classic Mastercard
  • Monthly income requirement: ₱50,000
  • Interest rate: 3%
  • 1 rewards point for every ₱50 spend
AUB Easy Mastercard
aub easy
AUB Easy Mastercard
  • Monthly income requirement: ₱50,000
  • Interest rate: 3%
  • Flexible credit card payment due date

Sources:

Rouselle has over eight years of writing experience in the personal finance niche. She has written feature stories, articles, and how-to guides on various personal finance and trending lifestyle topics. Before that, she briefly worked in banking and was a licensed life insurance advisor. When not writing, Rouselle likes to read books and binge-watch films and series. Follow Rouselle on Linkedin.

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