Are credit card annual fees worth it?
A simple break-even sum tells you whether a card’s fee pays for itself on your spending.
37 of the 115 cards we track charge no annual fee. The rest only make sense if they earn you more than they cost.
The break-even sum
Divide the annual fee by the reward rate. That’s how much you need to spend in a year, at that rate, just to earn the fee back.
Break-even spend = annual fee ÷ reward rate
For example, the ADCB 365 Cashback has an annual fee of AED 383.25 and pays 3% on grocery. To earn the fee back from that category alone you’d need to spend about AED 12,775 a year there, around AED 1,065 a month. Everything above that is profit, up to the card’s caps.
Then compare against a free card
The real question isn’t “does this card cover its fee?” but “does it beat the best free card by more than the fee?” Our calculator does exactly that comparison for cashback cards: it works out a year of cashback and takes off the fee.
Fee waivers
Some banks waive the fee in the first year or when you spend a set amount. These offers change often, so check the bank’s current terms rather than relying on a waiver you read about elsewhere.