Annual fee

An annual fee is an ongoing fee charged to the borrower in a loan, as well as credit card holders, as payment for keeping their account active. Sometimes called administration or account keeping fees, they are charged every year throughout the duration of the loan. The fee is supposed to cover the cost of maintaining the borrower's account, and in the case of credit cards, the right to hold and use the card itself. Not all loans and credit cards have an annual fee; some banks will charge you separate annual fees for additional features.