Skip to main content

Credit Card Fees 101: How and why fees are charged


Published March 27, 2024 • 5 Min Read

Do all credit cards come with fees? How much is a typical annual fee? Can I get a card with no fee? Get answers to these questions and more with this introduction to credit card fees in Canada.

A credit card can be a handy tool that lets you pay for things in stores, online and by phone. There are various types of credit cards to choose from, with different credit limits, interest rates, benefits and fees.

There are a few different types of fees that come with using a credit card. But depending on the type of card you choose and the way you use your card, you may not even encounter a credit card fee. Being informed about fees can help ensure you’re getting the most out of your credit card.

The lowdown on annual fees

An annual fee is a fee your credit card issuer will charge. Typically, the fee is once a year, but it can also be monthly.  

Annual fees can vary from under $30 to over $600. And some cards come with no annual fee.

In general, the amount of the fee corresponds to the additional perks and benefits that come with the card. Although a card with no annual fee may give you the chance to earn points or cash back, the rate at which you earn these benefits or redeem may be lower than that of a card with an annual fee.

Let’s take a look at some RBC cards as an example.

  • $0 annual fee. The RBC ION Visa comes with no annual fee. You typically receive 3,500 welcome points and earn 1.5X Avion points for every $1 spent on groceries, rides, gas, streaming, digital gaming and more. You can redeem your points to pay bills and shop for gift cards or merchandise.

  • $48 annual fee. The RBC ION+ Visa comes with a low annual fee, charged at $4 monthly. A typical welcome bonus is about 7,000 points and you earn 3X Avion points for every $1 spent on the same everyday items. Like the card above, you can redeem your points to pay bills and shop for gift cards or merchandise.

  • $120 annual fee. The RBC Avion Visa Infinite has a higher annual fee for the convenience of earning travel rewards. You may receive a welcome bonus of 15,000 – 35,000 Avion points and you earn 1 point for every $1 you spend, plus an extra 25% on eligible travel-related purchases12. You can redeem your points for travel on any flight and any airline – and just 35,000 points gets you a short-haul flight! Plus, you can access extensive insurance coverage and luxury travel benefits.

  • $399 annual fee. The RBC Avion Visa Infinite Privilege is a luxury travel card. The annual fee provides access to enhanced perks and benefits, including a welcome bonus of 15,000 – 35,000 Avion points. Plus, you earn 1.25 Avion points for every dollar you spend and get access to extensive insurance coverage and premier travel advantages, including airport lounge access, airport security fast track lanes, and dedicated airport parking at select Canadian airports. 

How to get a fee rebate

Interested in the benefits you can receive with fee-based cards but prefer not to pay a fee? There may be ways to get a fee waiver. In some cases, you can bypass the annual fee if:

  • You’re a student

  • You’re a senior

  • You hold multiple banking products with the same financial institution

  • You have a bank account that offers annual fee waivers 

Every card issuer has different fee structures. So, it’s a good idea to contact them to see what you can do to have the fee removed or reduced on your credit card.

Looking for a credit card?

Use our Credit Card Selector Tool to find the best credit card for you.

Compare Credit Cards

Other fees to be aware of

The annual fee may be the most visible fee that comes with your card. But there are other credit card fees to know about. Here are some common ones, but this isn’t a full list.

  • Cash advance fee. If you use your credit card to access cash (such as at an ATM), you may be charged a cash advance fee. This can be a flat fee per advance or a percentage of the amount you’re withdrawing.

  • Over-limit fee. This fee may be charged if you go over your credit limit. Some companies charge a percentage of the amount you’re over, while others have a set fee that might range from $15 to $30.

  • Foreign transaction fee. Most cards charge a foreign transaction fee for purchases made in another country. If you frequently travel outside of Canada and use your card as your primary spending tool, this fee could impact you. However, if you do not travel often or typically pay with cash while out of the country, this fee will not affect you a great deal.

  • Authorized user fee. An annual fee may apply for any extra authorized users added to the credit card account. This could be your spouse, partner, parent or someone you trust that is the age of majority in their province or territory. 

When it comes to credit card fees, you have options. You can choose a card with no annual fee. Or, you can choose to pay a fee to enjoy special benefits that can save you money on travel and purchases. When assessing credit cards, consider how they match your lifestyle and interests. And ask yourself, is the fee worth what I get in return?

Need a hand choosing a card? Use the RBC Credit Card Selector tool to learn more about the cards available to you.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

Share This Article


Banking/ Digital banking Credit and Debt Managing Money