Why do some credit cards for excellent credit have annual fees?

You might assume that the best credit cards are the cheapest. But with rewards in particular, it’s often a case of getting what you pay for. Issuers can only give away so much free stuff, after all. So those that offer truly generous rewards may use annual fees to offset some of the cost. But such offers can still end up saving you more money than the no-fee alternatives, assuming you pick the right one and use it strategically.

This is one reason comparing rewards credit cards can be so confusing. It’s also why crunching the numbers to see how much net rewards value each card will provide based on your own spending habits is so important.

With that being said, things are a bit different if you don’t plan to pay your bill in full every month or make purchases on a regular basis. You don’t want to pay a fee to finance a big-ticket purchase or transfer a balance, as doing so would be like paying interest in advance. And most 0% credit cards for people with excellent credit don’t charge annual fees in recognition of the fact that prospective customers want to minimize costs. Similarly, you’ll want to choose from one of the many no-annual-fee credit cards for excellent credit if you plan to use your card sparingly because you might not earn enough rewards to break even.