Many credit card accounts come with annual fees. Sometimes you can avoid them by going with a no annual fee credit card, but if you want perks and rewards chances are good you’ll pay one. The question then becomes whether or not a credit card annual fee is reasonable.

Let’s take a look at credit card annual fees and some things to consider about those fees when you compare credit cards.

The Range of Annual Fees

There are no simple rules about how much a credit card annual fee should be. The range is vast. For example, you can find no annual fee credit cards like the Bankwest Zero Gold credit card. On the other end of the spectrum you can find premium cards with fees as high as $700, like the Citi Select credit card. Most fall somewhere in between and vary based on factors like perks and rewards tied to the credit card.

How Much is Too Much?

Seeing the drastic variations in annual fees on the market, how can you tell if a card is charging too much to be a good deal? The trick is to look at the overall offer.

For example, some no annual fee offers are for a limited time (such as your first year). Some high annual fees accompany great rewards programmes you might want access to. And sometimes the advertised annual fee isn’t the full picture (when you read the terms you discover there’s a card annual fee and a separate rewards programme annual fee, whereas some cards are more upfront and advertise them as a single charge).

3 Factors to Consider

It really comes down to what you want out of your credit card and what that’s worth to you. Think of it like any other product or service and assign a value to it. Then you’ll know if the annual fee is a good deal or not for each credit card. Here are a few specific things you might take into consideration.

1. The rewards programme — One letting you earn more points (uncapped and with no expiration) might be worth more than a card with no rewards programme or a more limited one.
2. The perks — If you want high-end perks (like VIP lounge access at airports), a higher annual fee is usually justified.
3. Interest rates — Many low interest credit cards, like the St. George Vertigo MasterCard, do come with an annual fee ($50 – 60 is common for a no frills option). If low interest is important to you, paying an annual fee might be a trade-off to get the best deal on future financing.

Decide which factors are most important to you and what you’re willing to pay for them. Then find cards that fall within that range. That’s how you can tell if an annual fee is worth it. Of course there’s always the chance you’ll luck into a great offer with low or no annual fees plus extra perks and rewards. That’s why it’s so important to shop around.