Annual fee

Why it matters

For building credit, a no-annual-fee card costs you nothing to keep open year after year, which matters because closing an old card removes its limit and can spike your utilization.

Example

A no-annual-fee secured card lets you keep the account open long-term at no recurring cost. By contrast, high-fee subprime cards approve almost anyone but charge heavy monthly and annual fees, so a no-fee secured card from a major bank or credit union is a better choice.