When Does an Annual Fee Credit Card Make Sense?

business-15721_640While there are many credit cards on the market that come with no type of annual fee, choosing an annual fee credit card does make sense in some situations. To determine if this is a wise move for you, it pays to consider what you will get in exchange for that fee. Here are some examples of situations that call for looking closely at these card options.

Rebuilding Your Credit

You’ve gone through a rough financial patch the last few years. While things are fine now, your credit rating did take a hit. Some lenders will not work with you. There are creditors who have annual fee credit card plans designed to help people move on from the past and rebuild their credit ratings. If the fee is affordable and the credit card company regularly reports to the three main agencies, it will be a valuable tool.

Access to Rewards and Perks

Your credit is great, so you can get any card that you want. Why bother with an annual fee credit card? Because the card comes with a rewards program that is too good to pass up.

Maybe the card comes with a cash-back reward program that allows you to generate savings each month. By the end of the year, will those savings cover the cost of the annual fee and still leave you with some extra cash? If so, that card is for you.

Along with the cash back rewards, the card may come with other benefits you can put to good use. Does it have a points program that allows you to accrue points for every purchase you make? At the end of the year, those points can be used to purchase things you want, or maybe even put some cold hard cash in your hand.

Keep in mind the rewards must apply to purchases you would make even if you did not have the card. It accomplishes nothing if the card offers cash back bonuses only on restaurants or car rental agencies that you never use anyway. Unless the annual fee credit card plan benefits you based on your current spending habits, it is not worth your time.

No one can decide if an annual fee credit card is a good deal except you. Check the terms carefully and make sure that you will come out on top. If not, keep looking for a better deal.

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Niiwin, LLC, d/b/a Lendgreen (“Lendgreen”), is a wholly owned subsidiary of LDF Holdings, LLC, a wholly owned subsidiary of the Lac du Flambeau Business Development Corporation, a wholly owned and operated economic arm and instrumentality of the Lac du Flambeau Band of Lake Superior Chippewa Indians (“Tribe”), a federally recognized Indian tribe. Lendgreen is organized and in good standing under the laws of the Tribe. Lendgreen is a duly licensed Financial Services Licensee of the Lac du Flambeau Tribal Financial Services Regulatory Authority, an independent regulatory body of the Tribe.

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This is an expensive form of borrowing. Lendgreen loans are designed to assist you in meeting your short term borrowing needs and are not intended to be a long term financial solution. The Annual Percentage Rate (“APR”) as applied to your loan will range from 720% to 795% depending on your payment schedule, pay frequency, loan term, and the amount of your loan. Late payments and non-payment may result in additional fees and collection activities as described in your loan agreement and as allowed by Tribal and applicable federal law. Lendgreen does not lend to residents of AR, GA, MD, MN, NY, PA, VA, WV, WI or to members of the military or their dependents.

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