While most people should choose a credit card that does not have an annual fee, there are certain situations in which investing in your credit card makes sense in the long run. Benefits. If you pay an annual fee of say $100, make sure that you receive points, miles, or bonus incentives to offset or match the cost. You should also choose a credit card based on your hobbies (i.e., only choose a flight credit card if you plan to fly at least once yearly). Do the math. Some people discount yearly fee credit cards and do not consider them. Usually, annual fee credit cards have better rewards and make more sense for people who use credit cards for all of their purchases (including bills) and pay off their balance in full each month. Lower interest charge. If you are carrying a higher balance and the credit card with an annual fee has a lower APR, it is worth paying the annual fee instead of higher interest charges. Sign-up bonus. A sign-up bonus on a credit card that has an annual fee might not be worth the hassle, especially if the annual fee and sign-up bonus are within a few dollars of each other. If the sign-up bonus is still appealing to you, consider canceling the card after the initial 12 months to avoid possible higher APRs and an annual fee with a lack of benefits to offset the upfront cost.