What does an annual fee refer to in relation to credit cards?

An annual fee refers to a yearly charge that a credit card issuer imposes for the ownership of the credit card. This fee is typically assessed regardless of whether or not the cardholder uses the card during the year. Some credit cards, especially those that offer premium benefits such as rewards programs, travel perks, or higher credit limits, tend to have higher annual fees. It's important for consumers to weigh the benefits provided by the card against the cost of the annual fee to determine the card's overall value to them.