ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -An annual fee is a lump sum you have to pay every year that you’re signed up for certain credit cards. Often these fees, which can range from $95 to $500 or more, are offset by perks, such as airline miles, points, or cash back opportunities. Some cards also waive their annual fee for the first year.

Detailed explanation-2: -Credit card annual fees are a cost that your credit card provider automatically charges to your account to allow you to keep the card account open. 1 They are a common type of credit card fee.

Detailed explanation-3: -Some credit cards come with an annual fee. You’re more likely to find that credit cards with lucrative reward programs charge this annual fee for maintenance and administrative costs.

Detailed explanation-4: -Interchange Fees Every time a customer uses a credit card in your store, there’s a fee that is paid from the the acquiring bank (merchant account) to the issuing bank (customer account). It’s called an interchange fee. (There is an exception to this, see below.)

Detailed explanation-5: -You do not get charged extra if you don’t use your credit card. But if the card has an annual fee or any other regularly-occurring fees, those will be charged to your account even if you don’t use your credit card to make purchases.