An annual fee is a charge that some credit card companies impose on their customers as an annual cost for having and using the credit card. This fee can vary depending on the credit card company, the type of credit card, and other factors such as the customer's credit score or spending limit. The annual fee typically covers various services provided by the credit card issuer, including account maintenance, fraud protection, and access to rewards programs. Some credit cards have no annual fee while others may charge a high amount for their service. It is important for customers to consider the cost of the annual fee when choosing a credit card as it can impact their overall costs.