Most people won't ever want, need, or qualify for the invitation-only American Express (AXP) "black card" (officially called Centurion), with its first-year fee of $7,500. Nor will many qualify for the Visa (V) Black with its $495-a-year price tag. But annual-fee credit cards offering a wide range of additional services and rewards are widely available.
Are they worth it? Some fee-based cards, like Chase (JPM) Sapphire Preferred, give cardholders platinum-level benefits, such as a customer service line that's always answered by an actual person, or a waiver of international transaction fees. Those fees can add up, and not paying them can more than offset the $95 annual cost.
But for individuals with more basic credit card needs, no-annual-fee cards are just as plentiful. And, in an effort to be competitive in an increasingly cluttered market, many of those cards offer rewards that are more relevant to the average consumer.
All credit cards are designed to make a profit from their holders -- whether through annual fees, interest rates, fees for late payments or overages -- or all of the above. Avoiding an annual fee is just the beginning. By understanding how and when you'll be charged as you charge, you can avoid surprises and build healthy credit -- which is its own reward.