In the Truth in Lending Act's credit-card rules, an annual fee is "any annual or other periodic fee that may be imposed for the issuance or availability of a credit or charge card, including any fee based on account activity or inactivity."
An annual fee is a recurring yearly charge associated with maintaining access to a credit product, such as some credit cards or lines of credit. It is billed for keeping the account open and available rather than for borrowing a specific amount, and it is typically disclosed in the account terms before the account is opened. Not all credit products carry an annual fee, and the amount varies by issuer and product. An annual fee is separate from interest, which is charged on balances carried, and from transaction-based charges such as a cash advance fee. Installment loans, which are repaid over a fixed term, do not usually carry an annual fee.
