How Many Americans Have a Credit Card With An Annual Fee?
KEY POINTS
- Most avoid annual fees: 81% of American credit card users choose cards without annual fees, showing a preference for avoiding extra costs.
- Millennials embrace annual fee credit cards: 24% of millennials pay annual fees on their primary credit cards, the highest among generations.
- High earners utilize fees: 30% of individuals earning $150,000 or more use credit cards with annual fees, indicating a perceived value in premium perks.
Nearly 1 in 5 credit card users pay an annual fee on their primary card, according to data from the Federal Reserve. That climbs to 1 in 4 for millennials, and is even higher among high earners. So, are annual fee credit cards actually worth it?
Some can be, especially if you travel frequently, spend heavily, or value premium perks. Many of the best credit cards with annual fees offer rewards, insurance, and travel perks that can be worth their costs. But the data shows most Americans still prefer no annual fee credit cards.
Below, Motley Fool Money has broken down who's using annual-fee credit cards by age and income.
Nearly 1 in 5 credit card users pay an annual fee
Among Americans that use credit cards, 19% pay an annual fee on their most-used card, according to the Federal Reserve.
In other words, credit card users overwhelmingly prefer no-fee cards, with 81% avoiding annual fees.
Millennials are most likely to use annual fee credit cards
Millennials lead all generations in annual fee credit card use: 24% of them pay annual fees on their primary card.
Just 14% of Gen Z credit card users pay an annual fee, making them the generation least likely to have a card they need to pay for. That may be because they don't have the disposable income to pay for a card with annual fees or they don't value the perks that usually come with those cards as much as other generations.
Gen X and baby boomers fall in between, with 18% and 17% respectively using annual-fee credit cards.
| Generation | No Annual Fee | Paid an Annual Fee |
|---|---|---|
| Gen Z | 86% | 14% |
| Millennials | 76% | 24% |
| Gen X | 82% | 18% |
| Baby boomers | 83% | 17% |
30% of top earners use a credit card with an annual fee
Thirty percent of credit card users making $150,000 or more have an annual fee card as their primary credit card. That compares to just 13% of those earning $25,000 to $49,999.
For the most part, annual fee card usage climbs with income, which suggests that higher earners see more value in them and are better able to take advantage of their perks, on top of having the extra cash to pay for them.
| Income | No Annual Fee Credit Card | Paid an Annual Fee on Main Credit Card |
|---|---|---|
| $0 to $24,999 | 81% | 19% |
| $25,000 to $49,999 | 87% | 13% |
| $50,000 to $99,999 | 84% | 16% |
| $100,000 to $150,000 | 81% | 19% |
| $150,000 or more | 70% | 30% |
Annual fee credit cards: Worth it for some, avoided by most
Most Americans, 81%, steer clear of annual fee credit cards. But usage increases among millennials and high-income earners who may see more value in them and be better positioned to take advantage of premium perks.
A key to making annual fee cards worth it is optimizing spending to align with rewards and making sure you can use all the benefits they have. That way, you can not only own a luxury credit card, but feel luxurious doing so.
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Sources
- Federal Reserve (2025). "2024 Survey and Diary of Consumer Payment Choice."
Our Research Expert
Jack Caporal is the Research Director for The Motley Fool and Motley Fool Money.
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