Along with purchase interest rates, annual fees are probably one of the most popular features people consider when comparing credit cards. That’s because all credit cards either have an annual fee (meaning there is a similar point of comparison) or they use “no annual fee” as a marketing tactic to set a card apart.

The fact that it’s an easy comparison point isn’t a good enough reason to consider annual fees though. After all, those fees may be worth it with one card that offers a lot of perks and a rewards programme and completely not worthwhile with another credit card. But even though annual fees don’t really lend themselves to simple direct comparisons, there are still several reasons these fees are important. Let’s take a look at three reasons you should take a serious look at a credit card’s annual fee before applying for it.

1. Annual fees can be representative of the perks you’ll receive.

It’s not enough to know that one credit card has a $30 annual fee and another card has a $150 annual fee. Your annual fee is usually directly proportional to the perks and rewards you’ll receive. Therefore an annual fee can give you a rough idea of whether a card is a no frills card or a more advanced rewards card with a lot of perks. Of course if you find multiple cards with similar perks and rewards, looking for the lowest annual fee amongst those specific cards can still be a good idea.

2. Your annual fee is instant debt.

When you get approved for a new credit card, you’ll be charged the annual fee. That becomes instant debt on your account — an immediate balance affecting interest free days on purchases the following month. So you’ll want to make sure the annual fee is affordable to you, preferably low enough that you could pay it off in full right away so you still get interest free days if the card offers them.

3. Unlike interest rates and other fees, annual fees often cannot be avoided.

Interest free days were just mentioned. With those you can avoid paying the purchase interest rate on many cards if you pay off the balance in full each month. You can avoid other fees as well. For example, you avoid the over-the-limit fee by keeping your balance down and you can avoid paying late fees by setting up automatic payments or paying your bill early each month. But if you sign up for a credit card with an annual fee, you can’t avoid that fee. It comes like clockwork once a year. And if you’re stuck paying it year after year, it’s definitely worth considering when choosing your new credit card.

Annual fees aren’t something to be ignored when you compare credit cards. But while these three reasons for considering annual fees are all good ones, the primary concern is that you find an annual fee that you’re actually willing to pay. If you’re not willing to pay an annual fee at all, look for a no annual fee card like the HSBC credit card. Other than that, just make sure the annual fee fits within your yearly budget and that you get enough perks to justify the fee you’ll be charged every year.